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Comprehensive Annual Financial Report - 2001-2002Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2002 City of Clermont, Florida CITY OF CLERMONT, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT SEPTEMBER 30, 2002 Prepared by: Finance Department Joseph E. Van Zile Finance Director m CITY OF CLERMONT, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2002 TABLE OF CONTENTS I. INTRODUCTORY SECTION Letterof Transmittal.................................................................................. i Organizational Chart..............................................................................xiv Certificate of Achievement..................................................................... xv Listing of City Officials...........................................................................xvi II. FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT Independent Auditor's Report..................................................................1 GENERAL PURPOSE FINANCIAL STATEMENTS (Combined. Statements — Overview Combined. Balance Sheet — All Fund Types and Account Groups........... 3 Combined Statement of Revenues, Expenditures and Changes in Fund Balances —All Governmental Fund Types and Expendable Trust Funds..................................................7 Combined Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual — All Governmental FundTypes........................................................................................ 9 Combined Statement of Revenues, Expenses and Changes in Retained Earnings/Fund Balance — All Proprietary Fund Types and Nonexpendable Trust Funds.................................12 Combined Statement of Changes in Pension Fund Net Assets.............13 Combined Statement of Cash Flows — All Proprietary Fund Types and Nonexpendable Trust Funds.....................................14 TABLE OF CONTENTS FINANCIAL SECTION CONTINUED Notes to Financial Statements...............................................................16 COMBINING AND INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS General Fund: Statement of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual..................................................37 Special Revenue Funds: Combining Balance Sheet.....................................................................39 Combining Statement of Revenues, Expenditures and Changes in Fund Balances..............................................................40 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual .............................41 Debt Service Funds: Combining Balance Sheet.....................................................................45 Combining Statement of Revenues, Expenditures and Changes in Fund Balances..............................................................46 Combining Statement of Revenues, Expenditures and .Changes in Fund Balances — Budget and Actual .............................47 Enterprise Funds: Combining Balance Sheet.....................................................................49 Combining Statement of Revenues, Expenses and Changes in Retained Earnings............................................................................51 Combining Statement of Cash Flows....................................................52 TABLE OF CONTENTS FINANCIAL SECTION CONTINUED Trust Funds: Combining Balance Sheet..................................................................... 54 Comparative Statement of Pension Fund Net Assets ............................55 Combining Statement of Changes in Pension Fund Net Assets ............ 56 Account Groups: Schedule of General Fixed Assets by Sources......................................57 Schedule of General Fixed Assets - by Function and Activity ...............58 STATISTICAL SECTION Comments on the Statistical Section................................................................59 Expenditures by Function — Last Ten Fiscal Years..........................................60 Revenue by Source — Last Ten Fiscal Years...................................................62 Property Tax Levies, Tax Collections and Assessed Valuations — Last Ten Fiscal Years.............................................................64 Property Tax Rates — Direct and All Overlapping Governments — LastTen Fiscal Years................................................................................. 66 Water and Sewer Customer Data — Last Ten Fiscal Years .............................. 68 Utility Revenue Bond Coverage — All Utility Revenue Bonds — LastTen Fiscal Years................................................................................. 69 Demographic Statistics — Last Ten Fiscal Years .............................................. 71 Property Value, Construction and Bank Deposits — Last Ten Fiscal Years................................................................................. 72 PrincipalTaxpayers..........................................................................................74 LargestEmployers...........................................................................................75 TABLE OF CONTENTS STATISICAL SECTION CONTINUED Schedule of Insurance Coverages...................................................................76 Miscellaneous Statistical Data..........................................................................78 OTHER REPORTS Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.......................................................... 80 Report on Compliance with Requirements Applicable to the Major Program and Internal Control over Compliance in Accordance With OMB Circular A-133............................................................................ 82 Schedule of Expenditures of Federal Awards..................................................84 Notes to Schedule of Expenditures of Federal Awards....................................85 Schedule of Findings and Questioned Costs — Federal Program.....................86 INTRODUCTORY SECTION This section contains the letter of transmittal, organizational chart, certificate of achievement and listing of city officials. CITY OF CLERMONT Office of the City Manager March 7, 2003 Honorable Mayor and Council Members City of Clermont Clermont, Florida The Comprehensive Annual Financial Report of the City of Clermont, Florida, for the fiscal year ended September 30, 2002, is hereby submitted. This report was prepared by the City's Finance Department. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data, as presented, is accurate in all material aspects; that it is presented in a manner designed to fairly present the financial position and results of operations of the City as measured by the financial activity of its various funds, and that it includes the disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activities. THE REPORTING ENTITY AND ITS SERVICES The City of Clermont, which occupies 11.5 square miles, was incorporated in 1916. The City is located in south Lake County, approximately twenty-two miles west of the City of Orlando and twenty-two miles southeast of the City of Leesburg. The City is conveniently accessible to Orlando via Florida Highway 50. The City is essentially residential in character and its economy is primarily centered in retail trade as well as lodging, food and beverage establishments, which are tourism oriented. Lake County, located in Central Florida, is bounded to the north by Marion County, to the south by Polk County, to the east by Orange County, Seminole County and Volusia County, and to the west by Sumter County. Tavares, the County Seat, is located approximately 190 miles southeast of Tallahassee, the State Capitol, and 50 miles northeast of Orlando. P.O. BOX 120219 • CLERMONT, FLORIDA 34712-0219 PHONE: 352/394-4081 • FAX: 352/394-1452 The City has a Council -Manager form of government, with a Mayor and four other Council Members who are elected at large for two year staggered terms. Elections are held on the first Tuesday after the first Monday in November of each year. The City employs a full-time manager who is the chief executive and administrative officer of the City. The City provides a full range of municipal services as directed by its charter. These include Police and Fire Protection, Street and Sidewalk Maintenance, Planning and Development, Code Enforcement, Animal/Mosquito Control, Recreational Facilities and Programs, Cemetery and General Administrative functions. Clermont also operates and maintains water, wastewater treatment, sanitation, and stormwater utilities. In addition, during fiscal year 2001-2002, the City was the largest financial supporter of a private library that serves city residents, as well as residents of the surrounding area. The funds and entities related to the City of Clermont included in our Comprehensive Annual Financial Report, are those for which the City Council has financial accountability. According to criteria outlined in Governmental Accounting Standards Board (GASB) statements, financial accountability is present if the City Council appoints a voting majority of a component unit's governing body and has the ability to impose its will on that organization or if there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on the City. Based on these criteria, the various funds and account groups shown in the table of contents are properly included in this report. ACCOUNTING SYSTEM AND BUDGETARY CONTROL The City's accounting records for General, Special Revenue, Debt Service, Capital Projects and certain Trust and Agency Funds are maintained on a modified accrual basis with revenues being recognized when they become measurable and available, while expenditures are recorded at the time liabilities are incurred. Accounting records for the Enterprise, Internal Service and certain Trust and Agency Funds are maintained on a full accrual basis. In developing and modifying the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute assurance regarding: 1. The safeguarding of assets against loss from unauthorized use or disposition; and 2. The reliability of financial records for preparing financial statements and maintaining accountability for assets. 11 The concept of reasonable assurance recognizes that: 1. The cost of control should not exceed the benefits likely to be derived; and 2. The evaluation of , costs and benefits requires estimates and judgements by management. All internal control evaluations occur within the above framework. The City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary integration is established in the accounting records for control purposes at the object level. The City Manager is authorized to approve transfers within departments, but changes in total budget appropriations for a department must have prior approval of the City Council. Budgetary reports are issued and reviewed monthly by staff. FINANCIAL STATEMENT FORMAT The report is arranged in the following sections: Section A: Introduction Section This section contains the Letter of Transmittal and other such material as may be useful in understanding the reporting entity. Section B: Financial Section This section of the report contains the Independent Auditor's report and financial statements of the City. The financial statements include the General Purpose Financial Statements, which display financial data for the City as a whole and Combining Statements by Fund Type, which present data for homogeneous funds. Section C: Statistical Section This section presents detailed historical information that will be beneficial to the reader in understanding the City's growth and its future potential. Section D: Other Reports This section contains other Independent Auditor's reports. ui GENERAL FUND The General Fund encompasses the general government functions of the City and all other functions not accounted for in other funds. Unreserved, undesignated fund balance increased 20.7% from $2,119,794 to $2,558,824. Fund balance is the amount of resources available for expenditure in future years. The increase in fund balance is primarily due to actual revenues exceeding anticipated revenues. Revenues and other financing sources of the current fiscal year as compared with those of the previous year are presented as follows: 2001-2002 Amount % of total 2000-2001 Amount % of total % Inc./Dec. Over 2000-01 Taxes $4,924,708 69.4% $4,165,211 67.8% 18.2 % Licenses and Permits 252,702 3.5 211,101 3.4 19.7 Intergovernmental 897,166 12.6 749,028 12.2 19.8 Charges for Services 367,279 5.2 349,018 5.7 5.2 Fines and Forfeitures 111,517 1.6 145,564 2.4 (23.4) Investment Income 75,558 1.1 119,230 1.9 (36.6) Miscellaneous Revenues 170,546 2.4 154,553 2.5 10.3 Transfers In 295,183 4.2 249,200 4.1 18.5 Total $7,094,659 100% $6,142,905 100% 15.5% General Fund revenues increased 15.5% from $6,142,905 to $7,094,659 primarily due to increases in taxes, licenses and permits, and intergovernmental revenues. Taxes increased primarily due to an increase in franchise fees, utility service taxes and ad valorem revenues. The revenue increases were the result of growth and not a change in the City's tax rate structure. Clermont continues to enjoy being one of the lowest taxed communities in Central Florida. Licenses and Permits increased primarily due to a significant increase in building permits as is documented in Table 8 of the statistical section. Intergovernmental revenue increased 19.8% primarily due to the receipt of a capital recreation grant in the 2001- 2002 fiscal year and growth in state revenue receipts. Due to declining economic conditions following the September 11, 2001 tragedy, investment income has decreased 36.6%. IV Expenditures and other financing uses of the current fiscal year as compared with those of the previous year are as follows: 2001-2002 Amount % of total 2000-2001 Amount % of total % Inc./Dec.. Over 2000-01 General Government $1,118,513 17.0% $809,667 16.0% 38.1% Public Safety 31191,561 48.4 2,334,561 46.0 36.7 Physical Environment 41,611 0.6 211,801 4.2 (80.4) Transportation 638,330 9.7 453,845 8.9 40.6 Economic Environment 23,854 0.4 27,181 0.5 (12.2) Human Services 69,479 1.1 19,573 0.4 255.0 Culture & Recreation 1,212,709 18.4 1,111,928 21.9 9.1 Debt Service 80,193 1.2 106,264 2.1 (24.5) Transfers Out 214,151 3.2 0 0.0 N/A Total $6,590,755 100% $5,074,820 100% 29.9% General Fund expenditures increased 29.9% from $5,074,820 to $6,590,755 primarily due to an increase in personnel and operating expenditures. Public Safety increased due to the addition of two (2) Police Officers, three (3) Firefighter/Paramedics and one (1) Firefighter/Inspector. Human Services expenditures increased due to the addition of mosquito control services in the City. Physical Environment expenditures decreased due to the reporting of certain personnel related costs in the Transportation category. The transfer out in 2001-02 was a one-time transfer to the Stormwater Fund for the Center Lake project. SPECIAL REVENUE FUNDS INFRASTRUCTURE FUND The Infrastructure Fund accounts for the City's share of the Local Government Infrastructure Surtax. The surtax, which represents a countywide one -cent increase in the State Sales Tax, has been in effect since 1987. In November 2001, Lake County residents voted to continue the surtax for another fifteen (15) years. The surtax may only be expended on items pertaining to the construction of fixed capital outlay. Infrastructure surtax funds were used in the fiscal year 2001-02 to subsidize the downtown revitalization project, assist in the purchase of land for recreational purposes and annual debt service associated with the 1989 Sales Tax and 2002 Public Improvement Revenue Bond issues. v IMPACT FEE FUNDS Impact Fee Funds account for the police, fire and recreation impact fees paid by developers. The fees were adopted by the City to require new development to pay its proportionate share of the capital costs necessary to accommodate new development . impacts on police, fire and recreational services. Comparative impact fee amounts for the last three fiscal years are as follows: 2001-2002 2000-2001 1999-2000 Police Impact Fees $405,167 $222,503 $201,944 Fire Impact Fees $387,518 $218,862 $237,720 Recreation Impact Fees $521,486 $503,454 $556,481 Total Impact Fees $1,314,171 $944,819 $996,145 Total impact fees increased from $944,819 to $1,314,171 primarily due to increased commercial construction as outlined in Table 8 of the Statistical Section. Two of the largest commercial projects include Home Depot and Super Target stores. Impact fees were used to purchase various equipment and vehicles. In addition, recreation impact fees were the primary funding source for the purchase of land for a future community center and lighting at Hancock Park. Fire impact fees were used for annual debt service associated with the 2002 Public Improvement Revenue Bonds and the purchase of a new squad truck for Fire Station No. 2. BLOCK GRANT FUND The City received a $600,000 Community Development Block Grant from the U.S. Department of Housing and Urban Development in fiscal year 1995-96. As of September 30, 2002 there is a mortgage receivable balance of $32,833. This receivable is amortized over a 5-year period from when the mortgage was signed. The receivable will be fully amortized by the end of fiscal year 2002-03. The City received a $600,000 Community Development Block Grant from the State of Florida during the 2000-01 fiscal year. This grant was used for the Downtown Streetscape project during the 2001-02 fiscal year. The project included street resurfacing, new sidewalks and parking facilities. Attractive lighting, landscaping, and benches were added also. vi DEBT SERVICE: FUND The Sales Tax Revenue Bond Sinking Fund is maintained to account for the accumulation of resources and the payment of debt service on the 1989 Sales Tax Revenue Bond. The bond was issued to provide funding for the development of the Palatlakaha Recreation Area and construction of the Public Services Complex and Public Safety Building. The 2002 Public Improvement Revenue Bond Fund was created to account for the accumulation of resources and payment of principal and interest for the Public Improvement Revenue Bonds. The bond was issued to provide funding for the construction of a new City Hall and to refinance a line of credit loan which was obtained in 2000 to provide funding for the construction of Fire Station No. 1. CAPITAL PROJECT FUND The Building Construction Fund is maintained to account for the financial resources and related expenditures pertaining to the construction of a new City Hall. The groundbreaking ceremony for this project was held June 21, 2002 with the estimated completion date in July 2003. As of the end of the fiscal year $1,025,377 was spent for construction. Financing for the project is provided through the proceeds of the 2002 Public Improvement Revenue Bond. 1 ENTERPRISE FUNDS I WATER FUND The Water Fund accounts for the provision of potable water service to City and non -City residents. Comparative data for the last three fiscal years is as follows: 2001-2002 2000-2001 1999-2000 Operating Revenues $3,219,265 $2,654,416 $2,124,341 Operating Expenses $1,722,581 $1,270,542 $1,367,508 Operating Income $1,496,684 $1,383,874 $756,833 Net Working Capital $3,286,692 $2,366,163 $1,417,209 Debt Service Coverage (Combined Water/Sewer) 2.70% 3.05% 2.36% Operating revenues and expenses increased 21.3% and 35.6% respectively, primarily due to servicing an expanded customer base. Expenses also increased due to a one-time accounting adjustment involving the capitalization of fixed assets. Without this adjustment, expenses actually increased 25.1%. The residential customer base has increased from 7,303 customers in September 2001 to 8,461 as of September 2002. vu SEWER FUND The Sewer Fund accounts for the provision of sewer services to City and non -City residents. Comparative data for the last three fiscal years is as follows: 2001-2002 2000-2001 1999-2000 Operating Revenues $1,835,173 $1,562,488 $1,323,239 Operating Expenses $1,871,267 $1,568,320 $1,337,598 Operating Income (Loss) ($36,094) ($5,832) ($14,359) Net Working Capital $148,639 $417,593 $427,105 Debt Service Coverage (Combined Water/Sewer) 2.70% 3.05% 2.36% Operating revenues and expenses increased 17.4% and 19.3% respectively from 2000-01 to 2001-02 primarily due to servicing an expanding customer base. The residential sewer system customer base has increased from 5,001 customers in September 2001 to 6,243 as of September 2002. An operating loss was incurred in 2001-02 primarily due to the provision of odor control services at the City's East Wastewater Treatment Plant and lift stations. Without this service, an operating income of $99,749 would have existed. SANITATION FUND The Sanitation Fund accounts for the provision of garbage and trash collection, recycling, and composting services to City residents. Comparative data for the last three fiscal years is as follows: 2001-2002 2000-2001 1999-2000 Operating Revenues $1,362,327 $1,144,053 $889,531 Operating Expenses $1,164,639 $1,091,335 $961,246 Operating Income (Loss) $197,688 $52,718 ($71,715) Net Working Capital $252,913 $42,937 $112,775 Operating revenues and expenses increased primarily due to servicing an expanding customer base. Operating income and net working capital increased in 2001-02 primarily due to the City transporting collected garbage to a less expensive disposal facility. vui STORMWATER UTILITY FUND The Stormwater Utility Fund accounts for the maintenance and improvement of the City's stormwater drainage system. The stormwater utility fee is charged to all property owners/tenants throughout the City and is based on the impervious area of their property. Comparative data for the last three fiscal years is as follows: 2001-2002 2000-2001 1999-2000 Operating Revenues $449,476 $396,747 $183,271 Operating Expenses $160,233 $168,302 $133,057 Operating Income $289,243 $228,445 $50,214 Net Working Capital $498,885 $365,436 $123,249 Operating revenues increased 13.3% primarily due to increased customer base. Expenses decreased due to one-time payments for professional services for Center Lake in fiscal year 2000-2001 of $39,150. Excluding these payments, operating expenses increased 24.1 %. INTERNAL SERVICE FUND The City maintains a Group Self -Insurance Fund to account for the accumulation of resources and the payment of insurance claims pertaining to the employee health and insurance coverage. The modified Self -Insurance Program is responsible for health and dental claims up to $40,000 per employee. Reinsurance provides coverage in excess of the City's limits up to $1,000,000 per employee. The Group Self -Insurance Fund had a negative retained earnings balance of $63,900 as of September 30, 2002. The negative retained earnings was primarily due to paid medical claims exceeding premiums collected. As a result, the City approved a premium adjustment during the 2002-03 fiscal year. TRUST FUNDS Trust Funds account for assets held by the City as Trustee for individuals, private organizations and other governmental units and/or funds. The General Employees', Police Officers' and Volunteer Firefighters' Pension Trust Funds account for the accumulation of resources to be used for the retirement annuities of all city employees. The Cemetery Perpetual Care Trust Fund accounts for monies received from people buying lots in the City cemetery. The principal must be kept intact, but the interest may be transferred to General Fund to defray the cost of cemetery operation and maintenance. ix The Community Redevelopment Fund accounts for funds administered by the Downtown Clermont Redevelopment Agency. The agency is authorized to use the funds to finance community redevelopment projects within the downtown area. In fiscal year 2001-02 the Community Redevelopment Fund made a $40,887 contribution to the Community Development Block Grant Fund to provide matching funds for the Downtown Streetscape project. GENERAL FIXED ASSETS The general assets of the City of Clermont are those fixed assets used in the performance of general governmental functions and exclude the fixed assets of the Proprietary Funds. As of September 30, 2002, the general fixed assets of the City totaled $20,239,904. This amount represents the original cost of the assets and is, therefore, considerably less than their present value. Depreciation of general fixed assets is not recognized in the City's accounting system. CASH MANAGEMENT The City maintains an investment policy that is based on the theory of minimizing credit and market risks, maintaining reasonable liquidity to meet maturing obligations, and maximizing return through the use of various investment sources. The City's investment program consists of funds invested in overnight repurchase agreements, the Florida State Board of Administration Investment Pool, and in United States Treasury securities. The overnight repurchase agreements are in relation to a banking service agreement the City maintains with a local qualified public depository. The agreement provides that a specific rate of return based on the bank's federal funds rate and amount of excess funds to be credited to the City's account on a daily basis. The Florida State Board of Administration Investment Pool is managed by the State of Florida and is available to any governmental agency within the State. The major advantages the pool offers to small cities such as Clermont are the higher rate of return from the large amount of funds available to invest and the liquidity of the invested funds. Access to the invested funds is on a daily basis. X DEBT ADMINISTRATION The City has the following long-term debt issues outstanding on September 30, 2002 ➢ A long-term note issued in 1980 to finance the purchase of the Library Building. ➢ A Sales Tax Revenue Bond issued in 1989 to provide funding for the development of the Palatlakaha Recreation Area and construction of the Public Services Complex and Police Department Building. ➢ A Capital Improvement Revenue Note issued in 1998 to provide funding for the purchase of computer equipment and a fire truck. ➢ A Capital Improvement Revenue Note issued in 1999 to provide funding for the purchase of a fire truck. ➢ A Public Improvement Revenue Bond issued in 2002 to provide funds for the construction of a new City Hall facility and pay off a $2,000,000 line of credit used to finance Fire Station No. 1 and City Hall engineering and design costs. ➢ A Water and Sewer Revenue and Refunding Bond issued in 2000 to defease its outstanding 1993 City of Arcadia Dedicated Pool Local Government Revenue Bonds, refinance the City's outstanding 1996 Bond Anticipation Note, and finance a portion of the City's sewer treatment plant expansion and various other capital improvements to the City's Water and Sewer System. RISK MANAGEMENT The City maintains Commercial Liability and Worker's Compensation insurance through programs sponsored and administered by the Florida League of Cities. The limit of protection for the liability coverage is $1,500,000 per occurrence. The City is not aware of any pending or threatened litigation, which would not be covered by insurance. FINANCIAL POSITION AND FUTURE PROSPECTS The overall financial position of the City is good, however, the pressures placed on the City services by the recent growth of the City requires careful short and long term planning. The City's tax base is expanding with new development providing additional revenues. Along with this additional development comes increased demands on all City services. xi The revenue stream created by growth is usually several months behind the demand for services, which places additional pressures on all departments to have the ability to continue to provide the necessary level of service within budget constraints. Fortunately, the City currently enjoys one of the area's lowest ad valorem millage rates and charges for service are within acceptable ranges. This allows for necessary adjustments in the future to meet the demands for continued and expanded services at acceptable levels. We must carefully monitor the economy and related growth issues so as not to expand too quickly while continuing to budget adequately for the continuance of services at a level all of our residents have come to enjoy. A combination of adequate planning, conservative budgeting, and sound management practices should. help maintain the City's financial stability. CE RTIFICATE OF ACHIEVEMENT The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Clermont, Florida, for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2001. The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Clermont has received a Certificate of Achievement for the last thirteen consecutive fiscal years. We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we are submitting it to GFOA. INDEPENDENT AUDIT Florida Statutes and the City Charter require an annual financial audit of the financial statements of the City of Clermont by an independent certified public accountant selected by the City Council. This requirement has been satisfied and the Auditor's unqualified opinion has been included in this report. xn ACKNOWLEDGEMENTS The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of the staffs in the City Manager's office, Planning Department and Finance Department. A special note of appreciation is due Lisa Strickland, Accountant for her hard work and dedicated efforts in the preparation of this report. I would also like to thank the Mayor and members of the City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, W e Saunders City Manager -r oseph E. a Zile Finance Director City of Clermont, Florida Organizational Chart Citizens City Attorney I Clermont City Council 1 Committees I City Manager CID Inspections Transportation Financial Reporting Occupational Licenses Programs Inspections Traffic Division Dive Team Parks Utility Billing Permitting Mapping Road Patrol Public Fire Education Water Treatment and Distribution Accounts Payable Code Enforcement Water System Improvements Communications Sewer Collection Personnel/Pay roll Zoning g Wastewater System Improvements and Treatment Records Stormwater Drainage Risk Management Stormwater Management Sanitation Budgeting Animal/Mosquito Control Fleet Maintenance AV 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, 2001 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. NLE OFFyi�siZ%TGur✓ ', UHITEO STATES r W NU y IAZO A President 6 MRPORAMN S — SEAL boy rxicAso Executive Director xv Mayor Mayor Pro-Tem Council Member Council Member Council Member City Manager City Attorney CITY OF CLERMONT, FLORIDA LISTING OF CITY OFFICIALS ELECTED OFFICIALS Harold S. Turville, Jr. Keith Mullins Frank Caputo Ann Dupee Elaine Renick APPOINTED OFFICIALS Finance Director Public Services Director Chief of Police Fire Chief City Engineer Planning Director Wayne Saunders Robert D. Guthrie Joseph E. Van Zile Preston Davis Randy Story Carle Bishop Tamara Richardson Barry Brown xvi �� \\ � \\� .. .� . g. ��,, FINANCIAL SECTION This section contains the following subsections: INDEPENDENT AUDITOR'S REPORT GENERAL PURPOSE FINANCIAL STATEMENTS COMBINING AND INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS I I I I INDEPENDENT REPO Sligo VA IVICDIRMIT DAMS PUCKETT INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Commissioners City of Clermont, Florida We have audited the accompanying general purpose financial statements of the City of Clermont, Florida, as of and for the year ended September 30, 2002, as listed in the table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose 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 general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Clermont Florida, as of September 30, 2002, and the results of its operations and the cash flows of its proprietary fund types and the changes in pension fund net assets for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated December 13, 2002 on our consideration of the City of Clermont, Florida's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. MCDIRMIT DAVIS PUCKETT & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS 605 E. ROBINSON STREET, SUITE 635 • ORLANDO, FLORIDA 32801 TELEPHONE 407-843-5406 • FAx 407-649-9339 • EMAIL: INFO@a MDPCPA.COM MEMBERS: PRIVATE COMPANIES PRACTICE SECTION • AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements and the schedule of expenditures of federal awards listed in the accompanying table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Clermont, Florida. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. The information listed in the Statistical Section is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, accordingly, we express no opinion on it. December 13, 2002 2 GENERAL PURPOSE FINANCIAL STATEMENTS (Combined Statements -Overview) These basic financial statements provide a summary overview of the financial position of all funds and account groups as well as the operating results of all funds. They also serve as an introduction to the detailed statements that follow in subsequent sections. CITY OF CLERMONT, FLORIDA COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS September 30, 2002 Governmental Fund Types Special Debt Capital General Revenue Service Projects Assets: Cash and cash equivalents $ 537,073 $ 228,320 $ 150,591 $ 54,516 Investments 2,114,478 869,014 - 4,944,199 Receivables: Accounts 39,128 - - 2,877 Interest 30,099 - - - Other - - Interfund receivables 14,680 98,829 - - Due from other governments 119,249 495,635 - - Prepaid items 97,756 - - - Inventory 7,844 - - - Interfund advances 44,041 - - - Restricted assets: Cash and cash equivalents - Investments - - Mortgage receivables - 32,833 - - Deferred charges - - - - Property, plant and equipment - - - _ Less: accumulated depreciation - - - _ Construction in progress - - - _ Amount available in debt service fund: - - - - Amount to be provided for retirement of general long-term debt - - - _ Total assets $ 3,004,348 $ 1,724,631 $ 150,591 $ 5,001,592 The accompanying Notes to Financial Statements are an integral part of these statements. 3 Fiduciary Proprietary Fund Types Fund Type Account Groups General General Totals Internal Fixed Long -Term (Memorandum Enterprise Service Trust Assets Debt Only) $ 299,074 $ - $ 7,730 4,135,548 - 5,870,784 561,159 - - 53,468 - - 19,082 - - 123,102 78,809 61,821 42,678 - 21,729 - - 921,000 - - 13,598,271 - - 376,881 - - 26,287,434 - - (8,620,938) - - 9,906,929 - - 1,277,304 17,934,023 - 603,164 83,567 19,082 377,241 614,884 140,434 29,573 44,041 921,000 - 13,598,271 - 32,833 - - 376,881 18,071,465 - 44,358,899 - - (8,620,938) 2,168,439 - 12,075,368 - 123,054 123,054 - 7,589,661 7,589,661 $ 47,725A17 $ 78,809 $ 5,940,335 $ 20,239,904 $ 7,712,715 $ 91,578,342 (Continued) n CITY OF CLERMONT, FLORIDA COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS fContinued� September 30, 2002 Governmental Fund Special Debt Capital General Revenue Service Projects Liabilities and Fund Equity: Liabilities: Accounts payable $ 35,415 $ 238,323 $ - $ 512,509 Accrued liabilities 87,278 - - - Retainage payable - 103,003 - 66,180 Interest payable 1,438 - 27,537 - Current liabilities (payable from restricted assets): Retainage payable - - - - Customer deposits - - - - Accrued interest - - - - Interfund payables 114,231 98,829 - - Interfund advances - - - - Deferred developer credits - 189,292 - - Deferred revenue - 32,833 - - Accrued annual leave 45,478 - - - Revenue bonds payable - - - - Notes payable - - - - Totalliabilities 283,840 662,280 27,537 578,689 Fund equity: Contributed capital - - - - Investment in general fixed assets - - - - Retained earnings: Reserved Unreserved - - - - Total retained earnings - - - - Fund balances: Reserved: Parking lots 4,638 - - - Police education 7,405 - - - Inventory 7,844 - - - Prepaids 97,756 - - - Interfund advances 44,041 - - - Downtown redevelopment - - - - Cemetery care - - - - Debt service - - 123,054 - Employee's pension benefits - - - - Unreserved: Undesignated 2,558,824 1,062,351 - 4,422,903 Total fund balances 2,720,508 1,062,351 123,054 4,422,903 Total Equity and Other Credits 2,720,508 1,062,351 123,054 4,422,903 Total Liabilities, Fund Equity and Other Credits $3,004,348 $1,724,631 $150,591 $5,001,592 The accompanying Notes to Financial Statements are an integral part of these statements 5 Fiduciary Proprietary Fund Types Fund Type Account Groups General General Totals Internal Fixed Long -Term (Memorandum Enterprise Service Trust Assets Debt Only) $ 852,393 $142,709 $ 22,170 $ - $ - $ 1,803,519 32,236 - - - - 119,514 34,581 - - - - 203,764 28,975 501,366 134,678 310,709 149,501 133,231 17,241,648 11,083,291 14,680 44,041 142,709 80,891 20,239,904 10,616,067 6,635,116 (63,900) 17,251,783 (63,900) - 501,366 - 134,678 - 310,709 377,241 - 44,041 189,292 - 32,833 158,601 337,310 7,095,000 24,336,648 459,114 459,114 7,712,715 28,879,004 11,083,291 20,239,904 10,616,667 6,571,216 17,187,883 - 4,638 - - 7,405 - - 7,844 - - 97,756 _ - 44,041 - - (58,721) - - (58,721) - - 388,600 - - 388,600 _ - - 123,054 - - 5,529,565 - - 5,529,565 _ _ - 8,044,078 - - 5,859,444 - - 14,188,260 28,335,074 (63,900) 5,859,444 20,239,904 - 62,699,338 $ 47,725,417 $ 78,809 $ 5,940,335 $ 20,239,904 $ 7,712,715 $ 91,578,342 L CITY OF CLERMONT, FLORIDA COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS For The Year Ended September 30, 2002 Governmental Fund Types Special Debt Capital General Revenue Service Projects Revenues: Taxes $ 4,924,708 $ 752,740 $ - $ - Licenses and permits 252,702 - - - Intergovernmental revenues 897,166 510,197 - - Charges for services 367,279 - - - Fines and forfeitures 111,517 - - - Impactfees/special assessments - 1,314,171 - - Investment income 75,558 29,096 2,474 33,297 Miscellaneous revenues 170,546 6,776 - - Total revenues 6,799,476 2,612,980 2,474 33,297 Expenditures: Current: General government 1,118,513 - - 1,025,377 Public safety 3,191,915 200,919 - 5,152 Physical environment 41,611 - - - Transportation 638,330 1,723 - - Economic environment 23,854 1,094,175 - - Human services 69,479 - - - Culture and recreation 1,212,709 723,564 - - Debt service: Principal retirement 55,919 43,293 225,000 - Interest and fiscal charges 24,274 37,577 25,915 2,666 Bond issuance costs - - - 211,397 Total expenditures 6,376,604 2,101,251 250,915 1,244,592 Excess (Deficiency) of Revenues Over Expenditures 422,872 511,729 (248,441) (1,211,295) Other Financing Sources (Uses): Operating transfers in 295,183 880,747 292,343 - Operating transfers out (214,151) (1,123,053) - - Debt proceeds - - - 6,965,000 Payment to refunded debt agent - - - 2,000,000 Net other financing sources (uses) 81,032 (242,306) 292,343 4,965,000 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 503,904 269,423 43,902 3,753,705 Fund Balances - Beginning of Year 2,216,604 792,928 79,152 669,198 Fund Balances - End of Year $ 2,720,508 $ 1,062,351 $123,054 $ 4,422,903 The accompanying Notes to Financial Statements are an integral part of these statements. 7 Fiduciary Fund Type_ Totals Expendable (Memorandum Trust Only) $ 74,843 $ 5,752,291 - 252,702 - 1,407,363 - 367,279 - 111,517 - 1,314,171 724 141,149 - 177,322 75,567 9,523,794 - 2,143,890 - 3,397,986 - 41,611 - 640,053 20,000 1,138,029 - 69,479 1,936,273 72,000 396,212 1,402 91,834 - 211,397 93,402 10,066,764 (17,835) (542,970 1,468,273 (40,886) (1,378,090) 6,965,000 2,000,000) (40,886) 5,055,183 (58,721) 4,512,213 3,757,882 $ (58,721) $ 8,270,095 CITY OF CLERMONT, FLORIDA COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL ALL GOVERNMENTAL FUND TYPES For The Year Ended September 30, 2002 Revenues: Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeitures Impact fees/special assessments Investment income Miscellaneous Total revenue Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Principal retirement Interest and fiscal charges Bond issuance costs Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating transfers in Operating transfers out Debt proceeds Payment to refunded debt agent Net other financing sources (uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses Fund Balances - Beginning of Year Fund Balances - End of Year General Fund Variance Favorable Budget Actual (Unfavorable) $ 4,569,916 $ 4,924,708 $ 354,792 185,000 252,702 67,702 802,120 897,166 95,046 352,812 367,279 14,467 158,000 111,517 (46,483) 108,050 75,558 (32,492) 148,050 170,546 22,496 6,323,948 6,799,476 475,528 1,404,018 1,118,513 285,505 2,976,075 3,191,915 (215,840) 33,080 41,611 (8,531) 731,524 638,330 93,194 21,370 23,854 (2,484) 62,823 69,479 (6,656) 1,255,088 1,212,709 42,379 55,919 55,919 - 179,685 24,274 155,411 6,719,582 6,376,604 342,978 (395,634) 422,872 818,506 285,330 295,183 9,853 (242,502) (214,151) 28,351 38,204 42,828 81,032 (352,806) 503,904 856,710 2,106,698 2,216,604 109,906 $ 1,753,892 $ 2,720,508 $ 966,616 The accompanying Notes to Financial Statements are an integral part of these statements. 9 Special Revenue Funds Debt Service Fund Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ 740,200 $ 752,740 $ 12,540 $ - $ $ 685,000 510,197 (174,803) - - 731,000 1,314,171 583,171 - 64,325 29,096 (35,229) 6,500 2,474 (4,026) - 6,776 6,776 - - - 2,220,525 2,612,980 392,455 6,500 2,474 (4,026) 59,000 - 59,000 - - - 195,600 200,919 (5,319) - - 25,000 1,723 23,277 - - - 820,000 1,094,175 (274,175) - - - 914,764 723,564 191,200 - - - 43,293 43,293 - 225,000 225,000 - 56,936 37,577 19,359 25,665 25,915 (250) 2,114,593 2,101,251 13,342 250,665 250,915 (250) 105,932 511,729 405,797 (244,165) (248,441) (4,276) 969,183 880,747 (88,436) 320,422 292,343 (28,079) (1,178,480) (1,123,053) 55,427 - - - (28,079) 292,343 320,422 (33,009) (242,306) (209,297) (103,365) 269,423 372,788 76,257 43,902 (32,355) 1,084,200 792,928 (291,272) - 79,152 79,152 $ 980,835 $ 1,062,351 $ 81,516 $ 76,257 $ 123,054 $ 46,797 (Continued) 10 CITY OF CLERMONT, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL ALL GOVERNMENTAL FUND TYPES For The Year Ended September 30, 2002 Capital Projects Fund Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes $ - $ $ _ Licenses and permits - - Intergovernmental revenues - - - Charges for services - - Fines and forfeitures - - Impact fees/special assessments - - - Investment income 20,000 33,297 13,297 Miscellaneous - - - Total revenue 20,000 33,297 13,297 Expenditures: Current: General government 4,660,000 1,025,377 3,634,623 Public safety - 5,152 (5,152) Physical environment - - Transportation - - Economic environment - - Human services - - Culture and recreation - - Debt service Principal retirement - - Interest and fiscal charges - 2,666 Bond issuance costs - 211,397 (211,397) Total expenditures 4,660,000 1,244,592 3,418,074 Excess (Deficiency) of Revenues Over Expenditures (4,640,000) (1,211,295) 3,428,705 Other Financing Sources (Uses): Operating transfers in Operating transfers out Debt proceeds Payment to refunded debt agent Net other financing sources (uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses Fund Balances - Beginning of Year Fund Balances - End of Year 6,000,000 6,965,000 965,000 (2,000,000) (2,000,000) - 4,000,000 4,965,000 965,000 (640,000) 3,753,705 4,393,705 640,310 669,198 28,888 $ 310 $ 4,422,903 $ 4,422,593 The accompanying Notes to Financial Statements are an integral part of these statements. 11 CITY OF CLERMONT, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS/ FUND BALANCE ALL PROPRIETARY FUND TYPES AND NONEXPENDABLE TRUST FUNDS For The Year Ended September 30, 2002 Fiduciary Proprietary Fund Types Fund Type Totals Internal Nonexpendable (Memorandum Enterprise Service Trust Only) Operating Revenues: Charges for services $ 6,698,482 $ 920,230 $ - $ 7,618,712 Sales - cemetery lots - - 37,900 37,900 Miscellaneous 167,759 - - 167,759 Total operating revenues 6,866,241 920,230 37,900 7,824,371 Operating Expenses: Personal services 1,734,723 - - 1,734,723 Utilities 447,049 - - 447,049 Dumping fees 320,536 - - 320,536 Administrative services 320,212 35,032 - 355,244 Repairs and maintenance 563,400 - - 563,400 Depreciation and amortization 730,075 - - 730,075 Professional services 571,238 - - 571,238 Insurance 61,565 134,630 - 196,195 Operating supplies 106,136 - - 106,136 Office expense 57,732 - - 57,732 Bad debt 6,054 - - 6,054 Medical claims - 689,030 - 689,030 Total operating expenses 4,918,720 858,692 - 5,777,412 Operating income (loss) 1,947,521 61,538 37,900 2,046,959 Nonoperating Revenue (Expenses): Impact fees from developers 4,984,314 - Interest revenue 431,150 333 Interest expense (814,827) - Total nonoperating revenue 4,600,637 333 Income (loss) before operating transfers 6,548,158 61,871 Operating Transfers: Operating transfers in Operating transfers out Net operating transfers Net income (loss) Retained Earnings/Fund Balance - Beginning of Year - As Previously Stated Prior Period Adjustments: Contributed capital errors Capitalization of fixed assets errors Retained Earnings/Fund Balance - Beginning of Year - As Restated 205,000 (295,183) (90,183) 6,457,975 61,871 37,900 37,900 6,980,997 (125,771) 350,700 4,984,314 431,483 (814,827) 4,600,970 6,647,929 205,000 (295,183) (90,183) 6,557,746 7,205,926 3,945,939 - - 3,945,939 (133,128) - - (133,128) 3,812,811 - - 3,812,811 10,793,808 (125,771) 350,700 11,018,737 Retained Earnings/Fund Balance - End of Year $ 17,251,783 $ (63,900) $ 388,600 $ 17,576,483 The accompanying Notes to Financial Statements are an integral part of these statements. 12 Aor CITY OF CLERMONT, FLORIDA COMBINED STATEMENT OF CHANGES IN PENSION FUND NET ASSETS For The Year Ended September 30, 2002 Additions: Contributions: Employer Plan members State Total contributions Investment income: Investment income (loss) Less: investment expense Net investment income (loss) Total additions Deductions: Benefits/distributions Total deductions Net Increase (Decrease) Net Assets Held in Trust for Pension Benefits: Beginning of Year End of Year $ 112,891 17,979 170,902 301,772 (144,696) (24,741) 169.437, 132,335 198,988 198,988 (66,653) 5,596,218 $ 5,529,565 The accompanying Notes to Financial Statements are an integral part of these statements. 13 CITY OF CLERMONT, FLORIDA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES AND NONEXPENDABLE TRUST FUNDS For The Year Ended September 30, 2002 Fiduciary Proprietary Fund Types Fund Type Totals Internal Nonexpendable (Memorandum Enterprise Service Trust Only) Cash Flows from Operating Activities: Receipts from customers $ 6,851,387 $ 841,421 $ Payments to suppliers (2,651,137) (169,662) Payments to employees (1,601,492) - Payments for medical claims - (672,092) _ Net cash provided by (used in) operating activities 2,598,758 (333) Cash Flows from Non -Capital Financing Activities: Short term interfund advance 4,684 Operating transfers in 205,000 Operating transfers out (295,183) Net cash provided (used) by non -capital financing activities (85,499) Cash Flows from Capital and Related Financing Activities: Acquisition and construction of fixed assets (8,328,068) Interest paid on bonds and leases (776,260) Impact fees received 4,984,314 Net cash provided (used) by capital and related, financing activities (4,120,014) Cash Flows from Investing Activities: Interest received 431,150 Investment sales 3,224,910 Investment purchases (2,725,207) Net cash provided (used) by investing activities 930,853 Net (Decrease) Increase in Cash and Cash Equivalents (675,902) Cash and Cash Equivalents at Beginning of Year 1,895,976 Cash and Cash Equivalents at End of Year Classified As: 37,900 $ 7,730,708 - (2,820,799) - (1,601,492) - (672,092) 37,900 2,636,325 4,684 (295,183) (290,499) (8,328,068) (776,260) - 4,984,314 (4,120, 014) 333 - 431,483 - - 3,224,910 - (56,561) (2,781,768) 333 (56,561) 874,625 (18,661) 26,391 (694,563) $ 1,220,074 $ - $ 7,730 $ 1,227,804 Current assets $ 299,074 $ - $ 7,730 $ 306,804 Restricted assets 921,000 - - 921,000 Total $ 1,220,074 $ - $ 7,730 $ 1,227,804 The accompanying Notes to Financial Statements are an integral part of these statements. 14 Reconciliation of Operating Income to Net Cash Provided by(Used in) Operating Activities: Operating income Adjustments Not Affecting Cash: Depreciation and amortization Fiduciary Proprietary Fund Types Fund Type Totals Internal Nonexpendable (Memorandum Enterprise Service Trust Only) $ 1,947,521 $ 61,538 $ 37,900 $ 21046,959 730,075 - - 730.075 Change in Assets and Liabilities: Increase in accounts receivable (39,983) (78,809) - (118,792) Increase in prepaids (9,273) - - (9,273) Decrease in inventory 17,382 - - 17,382 Increase in accounts payable 641,357 82,894 - 724,251 Decrease in accrued expenses (38,323) - - (38,323) Decrease in retainage payable (808,358) - - (808,358) Increase in accrued annual leave 133,231 - - 133,231 Increase in customer deposits 25,129 - - 25,129 Decrease in interfund payable - (65,956) - (65,956) Total adjustments 651,237 (61,871) - 589,366 Net Cash Provided by (Used in) Operating $ 2,598,758 $ (333) $ 37,900 $ 2,636,325 Activities: 15 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 1 - Summary of Significant Accounting Policies: The City of Clermont, Florida was incorporated December 1916, under the laws of the State of Florida and operates under the council-manager form of government under its charter adopted pursuant to H.B. 2223, Ch. 67-1217 Special Acts 1967, of the State of Florida. The accounting policies of the City of Clermont, Florida, conform to accounting principles generally accepted in the United States of America as applicable to governments. The following is a summary of the more significant policies: Reporting Entity- Accounting principles generally accepted in the United States of America require that these financial statements present the City (the primary government) and its component units. Component units generally are legally separate entities for which a primary government is financially accountable. Financial accountability ordinarily involves meeting both of the following criteria: the primary government is accountable for the potential component unit (i.e., the primary government appoints the voting majority of its board) and the primary government is able to impose its will upon the potential component unit, or there is a possibility that the potential component unit may provide specific financial benefits or impose specific financial burdens on the primary government. The component unit discussed in this note is included in the City's reporting entity because of the significance of its operational or financial relationship with the City. Based upon the application of these criteria, the City has one blended component unit as follows: The City of Clermont Community Redevelopment Trust 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 expendable trust fund. Fund Accounting - The accounts of the City are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenue and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds and account groups of the City are as follows: 16 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 1 - Summary of Significant Accounting Policies (Continued): Governmental Fund Types General Fund - To account for all financial resources except those required to be accounted for in another fund. All general tax revenues and other receipts that are not allocated by law or contractual agreement to another fund are accounted for in this fund. The general operating expenditures, fixed charges, and capital improvement costs that are not paid through other funds are paid from the general fund. Special Revenue Funds - To account for the proceeds of specific revenue sources (other than expendable trust, or major capital projects) requiring separate accounting because of legal or regulatory provisions or administrative action. Debt Service Fund - To account for the accumulation of resources for, and the payment of general long-term debt principal and interest. Capital Projects Funds - To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. Proprietary Fund Types Enterprise Funds - To account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or where the governing body has decided that periodic determination of net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Internal Service Funds - To account for operations that provide services to other departments and funds on a cost -reimbursement basis. Fiduciary Fund Types Trust Funds - To account for assets held by the City in a trustee capacity for individuals, private organizations, other governments, and/or other funds. When these assets are held under the terms of a formal trust agreement, either a pension trust fund, a nonexpendable trust fund, or an expendable trust fund is used. The terms "nonexpendable" and "expendable" refer to whether or not the government is under an obligation to maintain the trust principal. 17 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 1 - Summary of Significant Accounting Policies (Continued): Account Groups General Fixed Assets Account Group - To account for all fixed assets of the City, other than those accounted for in the enterprise funds. General Long -Term Debt Account Group - To account for the outstanding long-term obligations not otherwise recorded in enterprise, nonexpendable trust and pension trust funds. Basis of Accounting - The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. All proprietary funds, nonexpendable trust funds and pension trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet or statement of plan net assets. Fund equity (i.e., net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund -type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. The City has chosen not to use FASB pronouncements issued after November 30, 1989, for its proprietary activities. The modified accrual basis of accounting is used by all governmental fund types and expendable trust funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available,) "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The government considers property taxes as available if they are collected within 60 days after year-end. A one-year availability period is used for revenue recognition for all other governmental fund revenues. Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. 18 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 1 - Summary of Significant Accounting Policies (Continued): Basis of Accounting (Continued) All major revenues, except property taxes and licenses, are considered measurable and available and, as such, susceptible to accrual. The accrual basis of accounting is utilized by proprietary fund types, pension trust funds and nonexpendable trust funds. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. Cash and Cash Equivalents — For purposes of cash flows, cash includes amounts in demand deposits as well as short-term investments with a maturity date within three months of the date acquired by the government. Governmental fund investments, proprietary fund investments, and pension funds investments are reported at fair value. Accounts Receivable From Other Governments — Those amounts that represent a claim against another government, and are measurable, have been accrued. Receivables — Enterprise Funds maintain the direct write-off method of bad debt recognition due to the immateriality of amounts. The City has no concentrations of credit risk. Inventories - Inventories are stated at cost, using the FIFO method. Inventories are maintained by the General Fund and the Enterprise Funds. The City uses the consumption method in expensing governmental fund inventories. Restricted Assets — The restricted assets shown on the Enterprise Fund- balance .sheet represent those assets of the Enterprise Fund which are earmarked for specific purposes and cannot be used for paying general obligations of the Fund. The corresponding liability designated as payable from restricted assets represents the current maturities for which the restricted assets are accumulated. Amortization of Bond Discounts and Issuance Costs — Bond discounts and issuance costs are being amortized on a straight-line basis, which approximates the interest method, over the life of the bonds. Amortization of bond issuance costs amounted to $13,380 for the 2002 fiscal year. Amortization of bond discount, included in interest expense, amounted to $38,565 for the 2002 fiscal year. 19 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 1 - Summary of Significant Accounting Policies (Continued): Fixed Assets — General fixed assets are not capitalized in the funds used to acquire or construct them. Instead, capital acquisition and construction are reflected as expenditures in governmental funds, and the related assets are reported in the general fixed assets account group. All purchased fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical record exists. Donated fixed assets are valued at their estimated fair market value on the date received. 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. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed assets, as applicable. Public domain ("infrastructure") general fixed assets consisting of roads, bridges, curbs and gutters, street and sidewalks, drainage systems and lighting systems are capitalized by the City along with other general fixed assets. Assets in the general fixed assets account group are not depreciated. Depreciation of buildings, equipment and vehicles in the proprietary fund types is computed using the straight- line method, over the following estimated useful lives. Useful Proproetacy Type_ Funds Lives s (y .ears) Buildings Land Improvements Equipment 25 - 40 5-40 3-35 Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. Compensated Absences — The City accrues accumulated unpaid vacation when earned by the employee. Upon termination, the employee receives a cash benefit for the number of days accrued at the employee's current wage rate. The City pays a portion of unused sick leave for employees with at least ten (10) years of service. Such amounts have been accrued in the accompanying financial statements. Vacation pay is accrued when incurred in proprietary funds are reported as a fund liability. Vacation and sick pay that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. Amounts not expected to be liquidated with expendable available financial resources are reported in the general long-term debt account group. No expenditure is reported for these amounts. 20 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 1 - Summary of Significant Accounting Policies (Continued): Long-term Obligations — Long-term debt is recognized as a liability of a governmental fund when due. For other long-term obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. The remaining portion of such obligations is reported in the general long-term debt account group. Long-term liabilities expected to be financed from proprietary fund operations are accounted for in those funds. Risk Management — The City exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and omissions; natural disasters; and job -related illnesses or injuries to employees. Significant losses are covered through participation in a local government non -assessable self-insurance pool. For these insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. The City provides coverage for the first $40,000 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 City with a total aggregate stop -loss of $1,000,000. Fund Equity Proprietary Funds — Contributed capital consists of funds from developers, and federal and state (capital) grants through September 30, 2000. There have been no additions to contributed capital since then because the City was required to implement GASB Statement No. 33 This statement requires governmental entities that use proprietary fund accounting to recognize capital contributions and impact fees received as revenues, not contributed capital. However, governments are not allowed to restate contributed capital arising from periods prior to implementation of Statement No. 33 until implementation of GASB Statement No. 34. Grants received for operating assistance are recorded as non - operating revenue. Reservations of retained earnings are created by increases in assets restricted for debt service, renewal and replacement, and other contractual obligations. These increases result from earnings on restricted assets and other intrafund transfers to (from) restricted accounts. Earnings on restricted assets are included in net income of the Proprietary Funds. Reserves are not established for bond proceeds deposited into construction accounts. Governmental Funds — Reserves of the governmental funds are limited to the portions of fund balance, which are either not subsequently appropriated for expenditures or legally segregated for specific use. 21 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 1 - Summary of Significant Accounting Policies (Continued): Interfund Transactions — Transactions which constitute reimbursements to a fund for expenditures (expenses) initially made are recorded as expenditures or expenses (as appropriate) in the reimbursing fund and as reductions of the expenditures (expenses) in the reimbursed fund. All interfund transactions except advances and reimbursements are accounted for as transfers. Non -recurring or non -routine transfers of equity between funds are considered residual equity transfers. All other interfund transactions are treated as operating transfers. Property Tax Recognition — The key dates in the property tax cycle (latest date where appropriate) are as follows: Assessment/lien date January 1 Assessment roll validate July 1 Millage resolution approved September 30 Beginning of fiscal year for which taxes have been levied October 1 Tax bills rendered and due November 1 Property taxes payable: Maximum discount November 30 Delinquent April 1 Tax certificates sold May 31 Property taxes are collected and remitted by the county tax collector. The City does not accrue its portion of county held tax sale certificates because such amounts are neither measurable nor available at balance sheet date. The statutory maximum tax rates, which may be assessed by the City, are as follows: Ad valorem millage Utility tax (electric, gas telephone) Utility tax (telecommunications service tax) 10 mills 10% 5.52% Total Columns on the Combined Statements — Overview — Total columns on the Combined Statements — Overview are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in cash flows in conformity with accounting principles generally accepted in the United States of America. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 22 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 2 - Stewardship, Compliance and Accountability: Budgets and Budgetary Accounting — Budgets are legally adopted for all of the City funds except the internal service fund and the pension trust funds. Budgets for governmental funds and the expendable trust fund are adopted on a basis consistent with generally accepted accounting principles. The budgets for the enterprise funds are prepared on the modified accrual basis of accounting, which is not the same basis of accounting that is used to account for the actual results of operations. The actual results of operations are accounted for on the accrual basis. The following item indicates the primary difference between the budgetary basis and the GAAP basis used to account for the results of operations in the enterprise funds: Depreciation expense is not budgeted; however, expenses for capital outlays are budgeted. These outlays have been capitalized into fixed assets and eliminated from the results of operations on a GAAP basis. The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. Prior to August 31 st, the City Manager submits to the City Council the proposed operating budget for the fiscal year commencing the following October 1st. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. Prior to October 1st, the budget is legally enacted through passage of a resolution. The legal level of budgetary control is the department level. Administrative control is maintained at the object level through integration with accounting records. Appropriations lapse at the end of each fiscal year. Encumbrance accounting is not used by the City. The City Manager is authorized to transfer budgeted amounts within departments within any fund. However, any revisions that alter the total expenditures of a department must be approved by the City Council. During the year ended September 30, 2002, the City made several amendments to the budget. Budgeted amounts presented in the accompanying financial statements have been adjusted for legally authorized revisions. 23 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 2 - Stewardship, Compliance and Accountability (Continued): Excess of Expenditures over Appropriations — In the general fund, actual expenditures exceed appropriations in the following departments: finance and administrative $3,649; other general services $8,971; law enforcement $214,802; fine control $1,038; physical environment $8,531; economic environment $2,484 and animal control $6,656. Appropriations in Excess of Funds Available — Appropriations for the following special revenue funds were in excess of anticipated revenue and prior years fund balance: Recreation Impact. Fee Fund $40,456 and Fire Impact Fee Fund $145,972. Deficit Fund Equity — At September 30, 2002, the Group Self Insurance Fund had a deficit retained earnings of $63,900. The City is increasing the premium in order to provide operating income for future years. At September 30, 2002, the Community Redevelopment Fund had a deficit fund balance of $58,721, which occurred because of the fund borrowing money from the general fund to pay off a loan. Note 3 — Prior Period Adjustments: During the year ending September 30, 2002, adjustments were recorded to retained earnings and contributed capital for errors in reporting developer contributions and errors in capitalization of non -inventory items. The effect was to reduce contributed capital in the water fund by $915,987, and to reduce contributed capital in the sewer fund by $3,029,952. Both items directly increased retained earnings by the corresponding amounts. In the water fund, fixed assets and retained earnings decreased $133,128 to correct errors in the capitalization of fixed assets. Expenses were increased $133,128 for the year ended September 30, 2001. Note 4 — Deposits and Investments: Following are the components of the City's cash and investments at September 30, 2002: Unrestricted Restricted Total Cash and cash equivalents $ 1,277,304 $ 921,000 $ 2,198,304 Investments 17,934,022 13,598,271 31,532,294 $19 211 327 14 519M 33 730 59$ Deposits - The Florida Security for Depositors Act identifies those financial institutions that have deposited the required collateral in the name of the treasurer of the State of Florida as qualified public depositories. The City only places deposits with qualified public depositories. Therefore, all City deposits are entirely insured by FDIC or Florida's Multiple Financial Institution Collateral Pool. At September 30, 2002, the carrying amount of the City's deposits was $(773,940) and the bank balance was $257,774. 24 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 4 — Deposits and Investments (Continued): Investments — The City's investment policies are governed by state statutes and City ordinances. Authorized investments are: 1. The Local Government Surplus Funds Trust Fund, (commonly referred to as the SBA). 2. Unites States Government Securities. 3. United States Government Agencies. 4. Interest -bearing time deposits or savings accounts in qualified public depositories, as defined in s. 280.02. 5. Repurchase Agreements 6. Commercial paper that is rated "Prime-V by Moody's or "A-V by Standard and Poors. 7. Bankers' Acceptances with either a "Prime-1 "or" "A-1 "rating. 8. Registered investment companies. 9. Intergovernmental investment pool that is authorized pursuant to Section 163.01 Florida Statutes, and provided that said funds contain no derivatives. The SBA is not a registrant with the Securities and Exchange Commission (SEC): however, the Board has adopted operating procedures. consistent with the requirements for a 2a-7 fund. Therefore the pool account balance (amortized cost) can be used as fair value for financial reporting. 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 if 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 participation. The pension funds' equity in this pooled investment account is stated at fair value as provided by the Florida Municipal Pension Fund. 25 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 4 — Deposits and Investments (Continued): Investments (Continued) - The City's investments are categorized to give an indication of the level of risk assumed by the City at September 30, 2002: Category 1 includes investments that are insured or registered for which the City or its agent in the City's name holds the securities. Category 2 includes uninsured and unregistered investments for which counterparty's trust department or agent in the City's name holds the securities. Category 3 includes uninsured and unregistered investments for which the securities are held by counterparty, its trust department or agent, but not in the City's name. The assets of the City's general employees defined contribution pension fund are also invested in mutual funds of Citistreet. Investments in the SBA, FMPTF and Citistreet are not required to be categorized since these investments are in pooled investment funds and mutual funds and therefore not evidenced by securities that exist in physical or book entry form. At September 30, 2002, the City's investment balances were as follows: U.S. Treasury Notes Repurchase Agreement Investments not subject to categorization: SBA Local Government Investment Pool Florida Municipal Pension Pension Trust Fund Citistreet Category 1 2 3 $ - $4,911,445 $ - - 2,453,714 - 4 911 445 453 Reported Amount Fair Value $ 4,911,445 2,45,�,714 7,365,159 Note 5 — Community Development Block Grant Fund Mortgages Receivable: 21,649,465 The City rehabilitated houses using Community Development Block Grant funds. A mortgage for the amount of rehabilitation costs was recorded for each house. Twenty percent of the mortgage is forgiven each year the homeowner continues to live in the home and properly maintains it. In each of the next five years, the amount of mortgages receivable will be reduced, along with a corresponding amount of deferred revenue. During the year ended September 30, 2002, $77,104 of the original mortgage amounts was forgiven. 26 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 6 - Property, Plant and Equipment: During the fiscal year ended September 30, 2002, the following changes in general fixed assets occurred: Balance Balance 9-30-01 Additions DPletionc 9-30-02 Land $ 2,070,991 $ 596,489 $ - $ 2,667,480 Buildings 4,086,227 6,345 - 4,092,572 Improvements 7,792,936 157,436 - 7,950,372 Machinery and equipment 3,577,812 338,211 (554,982) 3,361,041 Construction in progress - 2,168,439 - 2,168,439 Total $17 527 q66 3 2 6 920 (554 982) 2023 Ana The components of property, plant and equipment for the proprietary fund types at September 30, 2002 are: Proprietary Fund Types n er rn ise Land $ 1,464,129 Water system 8,636,120 Sewer system 13,090,973 Improvements 954,229 Equipment 2,141,983 Construction in progress 9,906,929 Total assets 36,194,363 Less: Accumulated depreciation 8,620,938 Net $2.7 573,425 Note 7 - Retirement Plans: The City maintains three separate single -employer, defined benefit pension plans for general employees, sworn police officers and firefighters, respectively 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. At the beginning of fiscal year 2002, the assets of the defined contribution plan were transferred to a third party administrator, Citistreet. 27 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 7 - 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 Commission 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. Summ2W of Signifin2nt A _ _o inting Policies Basis of Accounting — The Plans' financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each Plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. Method Used to Value Investments — Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments that do not have an established market are reported at estimated fair value. Description of Plans — The General Employees Defined Benefit Pension Plan is for general employees hired prior to September 30, 1985. The police officer and firefighters defined benefit pension plans are both local law, single employer, defined benefit pension plans as defined under Florida Statutes, Chapters 175 and 185, which covers all sworn police officers and firefighters. Employees are eligible to participate in the plan immediately upon employment with the City, and they are vested in the plan after ten years of service. Benefits are available after normal retirement at age 55 and 10 year of service, or earlier attainment of age 52 and 25 years of service. The normal retirement benefit is the number of years of credited service multiplied by 2% and multiplied by final monthly compensation. Early retirement is available after age 50 and 10 years of service; however, the early retirement benefit is reduced by 2% for each year before the normal retirement date. CITY OF CLERMONT, FLORIDA September 30, 2002 Note 7 - Retirement Plans (Continued): Membership in each of the defined benefit pension plans at September 30, 2002 was as follows: General Police Membership and Provisions Fmployees Off�g FimrefightPrs Members Retirees/beneficiaries receiving Benefits 14 4 1 Vested terminated employees - 4 4 Active participating employees = 22 22 14 30 2Z Funding Policy — The City's actuarially determined contribution rate per the October 1, 2001 actuarial valuations is 0% for general employees, 13.4% for police officers and 4.9% for firefighters. Police officers and firefighters make a minimum mandatory contribution of 1 %, in order to take advantage of the insurance premium tax rebate provided for in the statutes. Administrative costs are deducted from the net assets the plan. Annual Pension Cost and Net Pension Obligation — The City has contributed the Annual Required Contribution (ARC) each year, since plan inception and thus has not had, or had need to report, a Net Pension Obligation (NPO). In accordance with GASB Statement No. 27, the City calculated the potential for a net pension liability (asset) and reaffirmed that none existed at September 30, 2002. State law requires that actuarial valuations of the Police and Fire Plan be performed at least every three years. An actuarial valuation was performed as October 1, 2001. The actuarial and census information contained herein, unless otherwise indicated, reflects the status of the Plan as of the actuarial valuation date. 29 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 7 - Retirement Plans (Continued): Required Supplementary information is as follows: Schedule of Contributions from the Employer and Other Contributing Entities Annual Percentage Annual Percentage Annual Percentage Year ended SPntamh _r 3n Required C:ontrihutinn Of ARC rnntr1hutarl Required C:nntdhution Of ARC Contrihirfed Required rnntrihutinn Of ARC CnntriNitPd 2002 $12,000 100% $101,097 100% $17,614 100% 2001 10,022 100% 100,216 100% 10,252 100% 2000 9,936 100% 80,737 100% 9,097 100% 1999 5,341 100% 70,318 100% 5,397 100% 1998 12,094 100% 61,966 100% 8,039 100% 1997 13,500 100% 73,969 100% 8,225 100% Notes to the Required Supplementary Information — The information presented in the required supplementary schedule was determined as part of the actuarial valuation at October 1, 2001. Addition information applies as follows: Actuarial Cost Method Amortization Method Remaining Amortization. Period Asset Valuation Method Actuarial Assumptions: Investment rate of return Projected salary increases (including inflation of 3.5%) Cost of living adjustment General F Loyees Aggregate Cost N/A N/A Market Value 7.5% 6.0% N/A Police Officers Aggregate Cost N/A N/A Market Value 7.5% 5.5% N/A Aggregate Cost N/A N/A Market Value 7.5% 5.5% N/A As noted above, the plans all use the aggregate actuarial cost method, which does not identify or separately amortize unfounded actuarial liabilities. Therefore, presentation of a schedule of funding progress is not required. During the year none of the above plans held securities issued by the employer. 30 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 7 - 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. 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 investments 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 2002 was $2,728,638; the City's total payroll was $4,625,142. The City contributes annually to the pension account of each active participant an amount equal to eight percent (8%) of the employee's annual compensation. No contribution is required by employees. The City of Clermont City Commission adopted and may amend plan provision by resolution. The required contribution by the City for fiscal year 2002 was $219,496, less forfeitures of $106,605. Actual contribution was $112,891. Note 8 - Post -retirement Benefits: Retired employees have the option of continuing the same type of health and dental insurance coverages available to them while they were employed with the City. The cost of the premiums is paid totally by the retirees. Note 9 — Bonds and Notes Payable: The City issues bonds to provide funds for the acquisition and construction of major capital facilities. Bonds have been issued for both general government and proprietary activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. The City also has some notes payable in the general long-term debt group which are being repaid by the General Fund and the Fire Impact Fee Special Revenue Fund. 31 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 9 — Bonds and Notes Payable (Continued): Summarized below are the City's bonds and notes outstanding at September 30, 2002: Water and Sewer Fund - Water and Sewer Refunding Revenue Refunding Bonds, Series 2000, payable in annual installments of $100,000 (beginning December 2004) to $1,235,000 through 2030 with semi-annual interest payments at 4.4% to 5.375%. The net revenues of the water and sewer funds are pledged to secure the repayment of the debt. $17,935,000 Less: Current Maturities - Bond Discounts (693,352) Total $17 241 848 General Long -Term Debt Account Group - Public Improvement Revenue Bond, Series 2002, payable in annual installments of $315,000 to $600,000 through 2017 with semi-annual interest payments at 1.75% to 4.6%. 6,965,000 $2,070,000 Sales Tax Revenue Bonds, Series 1989, due serially in annual installments of $110,000 to $225,000 starting June 1991 through June 2003; interest rates vary from 6.3% to 7.05%. 130,000 Capital Improvement Notes, Series 1998A due to SunTrust Bank in five annual calendar year installments of $80,829 (including interest) and two annual installments of $22,979 starting December 1999. The notes bear an interest rate of 3.95% and are secured by the City's general government revenues. The loan was obtained to upgrade the City's computer system, achieve Y2K compliance and purchase a fire truck. 192,699 Capital Improvement Notes, Series 1999 due to SunTrust Bank in ten annual installments of $40,264 (including interest) beginning December 2000. The notes bear an interest rate of 5.742%. The loan was obtained to purchase a fire truck. 252,602 Note payable to Bank of America, dated May 23, 1980, due in 24 annual installments of $4,417 each, starting May 23, 1982, plus interest at 5 Y2% per annum, secured by the gasoline tax revenues of the City. 13,813 Total: 7 554 114 32 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 9 — Bonds and Notes Payable (Continued): Following is a maturity schedule of outstanding bonds payable: Year Ended September 30 General Long Principal -Term D _b Interest Water and Sewer Principal Fund Interest Total Debt Service 2003 $ 233,394 $ 220,494 $ - $ 932,128 $ 1,386,016 2004 497,764 266,750 - 932,128 1,696,642 2005 450,046 255,366 100,000 929,928 1,735,340 2006 457,562 243,023 150,000 924,352 1,774,937 2007 447,206 229,506 230,000 915,802 1,822,514 2008-2012 2,388,142 898,123 2,150,000 4,313,432 9,749,697 2013-2017 2,765,000 385,215 2,715,000 3,727,275 9,592,490 2018-2022 315,000 7,245 3,490,000 2,926,657 6,738,902 2023-2027 - - 4,525,000 1,862,572 6,387,572 2028-2031 - - 4,575,E 507,803 5,082,803 Total: s17 972 077 s 45 9FF 91. During the year ended September 30, 2002, the following changes in general long-term debt occurred: Balance at October 1, 2001 Debt proceeds Principal payments Increase (decrease) in compensated absences Balance at September 30, 2002 Bonds Notes Mortgages Compensated Payable Payable Payable Absences Total $ 355,000 $ 2,540,097 $ 90,229 6,965,000 - - (225,000) (2,094,796) (76,416) 7 095 000 445.301 13 R1. $ - $2,985,326 6,965,000 (2,396,212) Current Refunding — The City issued $6,965,000 of Public Improvement Revenue Bonds Series 2002, to provide resources to finance the acquisition, construction and installation of a new City Hall and related improvement, and to currently refund a $2,000,000 note dated August 31, 2000. Note 10 —Advance Refunding: In prior years, the City defeased its 1972 and 1988 bond issues by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. On September 30, 2002, $1,775,000 of bonds outstanding are considered defeased. 33 CITY OF CLERMONT, FLORIDA September 30, 2002 Note 10 —Advance Refunding (Continued): During 2001, the City advance refunded its outstanding $2,790,000 City of Arcadia Dedicated Pool Local Government Revenue Bonds, Series 1993 by placing the proceeds of new bonds in an irrevocable trust to provide for future debt service payments on the old debt. Therefore, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At September 30, 2002, $2,405,000 bonds outstanding are considered defeased. Note 11 — Interfund Receivables and Payables: Individual fund interfund receivable and payable balances at September 30, 2002, are as follows: Interfund Interfund General Fund Receivable.-, $ 14,680 Payables $114,231 Block Grant Fund - 98,829 Infrastructure Fund 98,829 - Water Fund 123,102 10,091 Sewer Fund - 133,241 Sanitation Fund - 5,012 Stormwater Fund - 1,157 Group Self Insurance Fund 78,809 - Community Redevelopment Fund - 14,680 General Employee Defined Contribution Pension Fund 61,821 - Total GM CITY OF CLERMONT, FLORIDA September 30, 2002 Note 12 - 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 $40,000 per year in medical, dental, or prescriptions 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 $1,000,000. There has been no reduction in insurance coverage from that carried in the prior year. Claims paid 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. 211Q2 2M 2 O Claims liabilities, beginning of year $ 59,815 $ 37,212 $ 20,349 Incurred claims 689,030 568,652 467,034 Payments on claims (606,136) (546,049) (450,171) Claims liabilities, end of year 149 709 59 815 Unpaid claims are based on reported claims up to sixty days after year end and personal knowledge of any employees' major health crisis. Note 13 - Commitments: At September 30, 2002 the City had committed to the following construction projects: City Hall Downtown Streetscape Project Wastewater Treatment Plant Construction East Water Well #4 Elevated Tank Site .IT17, M -• ' u• I 1,246,796 6,547,200 671,000 Note 14 - Summary Disclosure of Significant Contingencies: Cost Incurred to Date $661,801 1,030,031 6,417,443 241,616 Litigation - During the ordinary course of its operations, the City is a party to various claims, legal actions and complaints. In the opinion of the City's management and legal counsel, these matters are not anticipated to have a material financial impact on the City. 35 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2002 Note 15 - Segment Information for Enterprise Funds: The City maintains four enterprise funds, which provide water, sewer, sanitation and stormwater services. Segment information for the year ended September 30, 2002 is as follows: JAL SPWRC Sani anon Stormwater Total Operating Revenues 3 919 25. 1 83-3,173 $ 1 362 32-7 449 476$ R fiFF �41�41 Depreciation and Amortization 279 711 361 581 _ 65 131 �3 F5� 73n n75 Operating Income (Loss) 1 947 521 Operating Grants - — - Operating Transfers: In - - - �n5,nnn 205 nnn Out 5 075) Net Income ?,37 Fi1FiF1F 3,3fi5,5�1 197 174 501 684 6497,975 Current Capital Contributions - - - - Property Additions 875 933 F 98? 570 73,4iifi 39Fi 077 Property Deletions - 4,7R1 10,937 - 15,718 Net Working Capital 3 286 692 148 639 252 913 4q8 885 4-1a M Total Assets 17 53n 446 (31898.2 1 437 8JA 47,725,41Z Long-term Debt 7 1.97,5nc) 10192,021 17 374 M Total Equity 9863,039 16 461-69n 1,430,593 28 3�5,IlZ4 36 COMBINING AND INDIVIDUAL UND AND ACCOUNT GROUP STATEMENTS These financial statements provide a more detailed view of the "General Purpose Financial Statements" presented in the preceding subsection. Combining statements are presented when there are more than one fund of a given fund type. Individual statements for the General Long -Term Debt Account Group have not been presented since this Account Group has been presented in its entirety in the General Purpose Financial Statements Section and therefore presentation in this section would be redundant. GOVERNMENTAL FUND TYPES GENERAL FUND The General Fund accounts for all revenues and expenditures of the City that are not required to be accounted for in other funds. It receives a greater variety and number of taxes and other general revenues than any other fund. CITY OF CLERMONT, FLORIDA GENERAL FUND STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For The Year Ended September 30, 2002 Revenues: Taxes: Ad valorem Local option gas tax Franchise taxes Utility taxes Telecommunication service taxes Licenses and permits: Professional and occupational Other permits Intergovernmental revenues: State revenue sharing Mobile home and alcoholic beverage licenses Half -cent sales tax Motor fuel tax rebate Municipality share of county occupational licenses Municipality share of one -cent voted gas tax Municipality share of EMS tax Grants Charges for services: Public safety Program activity fees Administrative service fee Fines and forfeitures: Court fines Police education and automation False alarms Confiscations Investment income Miscellaneous revenues: Rentals Memorial sales and surplus equipment Contributions and other Variance Favorable Budget Actual (Unfavorable) $ 2,018,016 $ 2,038,529 $ 20,513 200,000 225,717 25,717 675,300 805,633 130,333 839,200 998,661 159,461 837,400 856,168 18,768 4,569,916 4,924,708 354,792 45,000 68,709 23,709 140,000 183,993 43,993 185,000 252,702 67,702 170,120 192,499 22,379 17,500 21,924 4,424 450,000 464,290 14,290 9,500 10,985 1,485 11,000 11,855 855 60,000 66,688 6,688 54,000 57,123 3,123 30,000 71,802 41,802 802,120 897,166 95,046 3,600 2,460 29,000 44,607 15,607 320,212 320,212 - 352,812 367,279 14,467 115,000 79,934 (35,066) 35,000 23,911 (11,089) 6,000 3,370 (2,630) 2,000 4,302 2,302 158,000 111,517 (46,483) 108,050 75,558 106,350 125,268 5,000 2,093 36,700 43,185 148,050 170,546 (32,492) 18,918 (2,907) 6,485 22,496 Total Revenues $ 6,323,948 $ 6,799,476 $ 475,528 37 CITY OF CLERMONT, FLORIDA GENERAL FUND STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Continued For The Year Ended September 30, 2002 Expenditures: General government: Legislative Executive Finance and administrative Legal services Planning and zoning Other general services Total general government Public safety: Law enforcement Fire control Total public safety Physical environment: Total physical environment Transportation: Total transportation Economic Environment: Total economic environment Human Services: Animal control Total human services Culture and recreation: Library Parks and recreation Total culture and recreation Debt service: Principal retirement Interest Total debt service Variance Favorable _ Budget _ Actual (Unfavorable) $ 27,905 $ 27,746 $ 159 171,946 168,627 3,319 321,464 325,113 (3,649) 38,000 30,733 7,267 561,363 273,983 287,380 283,340 292,311 (8,971)_ 1,404,018 1,118,513 285,505 2,075,397 2,290,199 (214,802) 900,678 901,716 (1,03§1 2,976,075 3,191,915 (215,840) 33,080 41,611 (8,531) 33,080 41,611 (8,531) 731,524 638,330 93,194 731,524 638,330 93,194 21,370 23,854 (2,484) 21,370 23,854 (2,484) 62,823 69,479 (6,656) 62,823 69,479 (6,656) 199,620 189,089 10,531 1,055,468 1,023,620 31,848 1,255,088 1,212,709 42,379 55,919 55,919 - 179,685 24,274 155,411 235,604 80,193 155,411 Total expenditures $ 6,719,582 $ 6,376,604 $ 342,978 38 SPECIAL REVENUE FUNDS The Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments, expendable trust, or major capital projects) that are legally restricted to expenditure for specified purposes. The General Fund pays certain administrative expenses. INFRASTRUCTURE FUND To account for the proceeds of the Local Government Infrastructure Surtax to be received by the City until December 2017. The proceeds and interest accrued thereto, by law are only to be used to finance, plan and construct infrastructure. RECREATION IMPACT FEE FUND To account for the recreation impact fees collected from new developments constructed in the City. POLICE IMPACT FEE FUND To account for the police impact fees collected from new developments constructed in the City. FIRE IMPACT FEE FUND To account for the fire impact fees collected from new developments constructed in the City. BLOCK GRANT FUND To account for the Community Development Block Grant from the U.S. Department of Housing and Urban Development. CITY OF CLERMONT, FLORIDA COMBINING BALANCE SHEET ALL SPECIAL REVENUE FUNDS September 30, 2002 Total Recreation Police Fire Special Infra- Impact Impact Impact Block Revenue Structure Fee Fee Fee Grant Funds Assets: Cash and cash equivalents $ 99,545 $ 83,771 $ 36,572 $ 8,432 $ - $ 228,320 Investments 149,309 - 518,798 200,907 - 869,014 Interfund receivable 98,829 - - 98,829 Due from other governments 68,703 - - 426,932 495,635 Mortgages receivable - - - 32,833 32,833 Total assets $ 416,386 $ 83,771 $ 555,370 $ 209,339 $ 459,765 $ 1,724,631 Liabilities and Fund Balances: Liabilities: Accounts payable $ 9,495 $ 2,698 $ 501 $ 529 $ 225,100 $ 238,323 Contracts payable - retainage - - - - 103,003 103,003 Interfund payable - - - 98,829 98,829 Deferred developer credits - - 92,067 97,225 - 189,292 Deferred revenue - - - - 32,833 32,833 Total liabilities 9,495 2,698 92,568 97,754 459,765 662,280 Fund Balance 406,891 81,073 462,802 111,585 - 1,062,351 Total liabilities and fund balance $ 416,386 $ 83,771 $ 555,370 $ 209,339 $ 459,765 $ 1,724,631 39 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES ALL SPECIAL REVENUE FUNDS For The Year Ended September 30, 2002 Total Recreation Police Fire Special Infra- Impact Impact Impact Block Revenue Structure Fee Fee Fee Grant Funds Revenues: Taxes $ 752,740 $ - $ - $ $ - $ 752,740 Intergovernmental revenues - - - 510,197 510,197 Impact fees/special assessments - 521,486 405,167 387,518 - 1,314,171 Investment income 15,055 1,048 7,978 4,777 238 29,096 Miscellaneous - - - 6,776 - 6,776 Total revenues 767,795 522,534 413,145 399,071 510,435 2,612,980 Expenditures: Current: Public safety - - 34,947 165,972 200,919 Transportation 1,723 - 1,723 Economic environment - - - 1,094,175 1,094,175 Culture and recreation 9,495 714,069 - - 723,564 Debt service: Principal retirement - - - 43,293 43,293 Interest and fiscal charges - - - 37,577 - 37,577 Total expenditures 11,218 714,069 34,947 246,842 1,094,175 2,101,251 Excess (Deficiency) of Revenues Over Expenditures 756,577 (191,535) 378,198 152,229 (583,740) 511,729 Other Financing Sources (Uses): Operating transfers in 297,007 - - Operating transfers out (1,110,852) - (12,201) Total other financing sources (uses) (1,110,852) 297,007 - (12,201) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (354,275) 105,472 378,198 140,028 Fund Balances - Beginning of Year 761,166 (24,399) 84,604 (28,443) Fund Balances - End of Year $ 406,891 $ 81,073 $ 462,802 $ 111,585 $ 583,740 880,747 - (1,123,053) 583,740 (242,306) 269,423 792,928 $ 1,062,351 40 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL ALL SPECIAL REVENUE FUNDS For The Year Ended September 30, 2002 Revenues: Taxes Intergovernmental revenues Impact fees/special assessments Investment income Miscellaneous Total revenues Expenditures: Current: General government Public safety Transportation Economic environment Culture and recreation Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses Fund Balances - Beginning of Year Fund Balances - End of Year Infrastructure Variance Favorable Budget Actual (Unfavorable) $ 740,200 $ 752,740 $ 12,540 26,000 15,055 (10,945) 766,200 767,795 1,595 59,000 - 59,000 25,000 1,723 23,277 13,800 9,495 4,305 86,582 11,218 97,800 668,400 756,577 88,177 (1,178,480) (1,110,852) (67,628) (1,178,480) (1,110,852) (67,628) (510,080) (354,275) 155,805 765,303 761,166 (4,137) $ 255,223 $ 406,891 $ 151,668 41 Recreation Impact Fee Variance Favorable Budget Actual (Unfavorable) Budget Police Impact Fee Variance Favorable Actual (Unfavorable) 90,000 - (90,000) - - - 477,000 521,486 44,486 129,000 405,167 276,167 20,900 1,048 (19,852) 9,000 7,978 (1,022) 587,900 522,534 (65,366) 138,000 413,145 275,145 44,875 34,947 9,928 900,964 714,069 186,895 - - - 900,964 714,069 186,895 44, 875 34,947 9,928 (313,064) (191,535) 121,529 93,125 378,198 285,073 297,007 297,007 - - - - 297,007 297,007 - - - - (16,057) 105,472 121,529 93,125 378,198 285,073 16,057 (24,399) (40,455) 185,311 84,604 (100,707) $ - $ 81,073 $ 81,073 $ 278,436 $ 462,802 $ 184,366 (Continued) I CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL ALL SPECIAL REVENUE FUNDS (Continued) For The Year Ended September 30, 2002 Revenues: Taxes Intergovernmental revenues Impact fees/special assessments Investment income Miscellaneous Total revenues Expenditures: Current: General government Public safety Transportation Economic environment Culture and recreation Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses Fund Balances - Beginning of Year Fund Balances - End of Year Fire Impact Fee _ Variance Favorable Budget Actual (Unfavorable) 125,000 387,518 262,518 8,425 4,777 (3,648) - 6,776 6,776 133,425 399,071 265,646 150,725 165,972 (15,247) 43,293 43,293 - 56,936 37,577 19,359 250,954 246,842 4,112 (117,529) 152,229 269,758 - (12,201) 12,201 - (12,201) 12,201 (117,529) 140,028 257,557 117,529 (28,443, (145,972) $ - $ 111,585 $ 111,585 43 Block Grant Totals Budget $ - 595,000 - - _ Actual $ - 510,197 - 238 _ Variance Favorable (Unfavorable) $ (84,803) - 238 _ Budget $ 740,200 685,000 731,000 64,325 - Actual $ 752,740 510,197 1,314,171 29,096 .6,776 Variance Favorable (Unfavorable) $ 12,540 (174,803) 583,171 (35,229) 6,776 595,000 510,435 (84,565) 2,220,525 2,612,980 392,455 - - - 59,000 - 59,000 195,600 200,919 (5,319) - - - 25,000 1,723 23,277 820,000 1,094,175 (274,175) 820,000 1,094,175 (274,175) _ _ - 914,764 723,564 191,200 43,293 43,293 - - - - 56,936 37,577 19,359 820,000 1,094,175 (274,175) 2,114,593 2,101,251 13,342 (225,000) (583,740) (358,740) 105,932 511,729 405,797 672,176 583,740 (88,436) 969,183 880,747 (88,436) - - - (1,178,480) (1,123,053) (55,427) 672,176 583,740 (88,436) (209,297) (242,306) (143,863) 447,176 - (447,176) (103,365) 269,423 372,788 _ _ - 1,084,200 792,928 (291,272) $ 447,176 $ - $ (447,176) $ 980,835 $ 1,062,351 $ 81,516 a. 1 DEBT SERVICE FUNDS The Debt Service Funds are used to account for the accumulation of resources and payment of bond principal and interest from governmental resources. PUBLIC IMPROVEMENT REVENUE BONDS FUND This fund is used to account for accumulation of resources and payment of principal and interest for the Public Improvement Revenue Bonds, Series 2002. SALES TAX REVENUE BOND SINKING FUND This fund is used to account for the accumulation of resources and payment of principal and interest for the Sales Tax Revenue Bonds, Series 1989. CITY OF CLERMONT, FLORIDA COMBINING BALANCE SHEET ALL DEBT SERVICE FUNDS Assets: Cash and cash equivalents Total assets Liabilities and Fund Balances: Liabilities: Accrued interest payable Total liabilities September 30, 2002 Public Sales Tax Improvement Revenue Revenue Bond Sinking Bond Fund Fund Totals $ 104,203 $ 46,388 $ 150,591 $ 104,203 $ 46,388 $ 150,591 $ 27,537 $ - $ 27,537 - 27,537 27,537 Fund Balance: Reserved for debt service 76,666 46,388 123,054 Total liabilities and fund balance $ 104,203 $ 46,388 $ 150,591 45 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES ALL DEBT SERVICE FUNDS For The Year Ended September 30, 2002 Revenues: Investment income Total revenues Expenditures: Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources: Operating transfers in Total other financing sources (uses) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses Fund Balances - Beginning of Year Public Sales Tax Improvement Revenue Revenue Bond Sinking Bond Fund Fund Totals $ 410 $ 2,064 $ 2,474 410 2,064 2,474 - 225,000 225,000 - 25,915 25,915 - 250,915 250,915 410 (248,851) (248,441) 76,256 216,087 292,343 76,256 216,087 292,343 76,666 (32,764) 43,902 79,152 79,152 Fund Balances - End of Year $ 76,666 $ 46,388 $ 123,054 M CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL DEBT SERVICE FUNDS For The Year Ended September 30, 2002 Revenues: Investment income Total revenues Expenditures: Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources: Operating transfers in Total other financing sources (uses) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses Fund Balances - Beginning of Year Fund Balances - End of Year Public Improvement Revenue Bond Fund Variance Favorable Budget Actual (Unfavorable) $ - $ 410 $ 410 - 410 410 - 410 410 76,257 76,256 (1 76,257 76,256 (1 76,257 76,666 409 $ 76,257 $ 76,666 $ 409 47 Sales Tax Revenue Bond Sinking Fund Variance Favorable Budget Actual (Unfavorable) Budget Totals Variance Favorable Actual (Unfavorable $ 6,500 $ 2,064 $ (4,436) $ 6,500 $ 2,474 $ (4,026) 6,500 2,064 (4,436) 6,500 2,474 (4,026) 225,000 225,000 - 225,000 225,000 - 25,665 25,915 (250) 25,665 25,915 (250) 250,665 250,915 (250) 250,665 250,915 (250) (244,165) (248,851) (4,686) (244,165) (248,441) (4,276) 244,165 216,087 (28,078) 320,422 292,343 (28,079) 244,165 216,087 (28,078) 320,422 292,343 (28,079) - (32,764) (32,764) 76,257 43,902 (32,355) - 79,152 79,152 - 79,152 79,152 $ - $ 46,388 $ 46,388 $ 76,257 $ 123,054 $ 46,797 .; I PROPRIETARY FUND TYPES or ENTERPRISE FUNDS Enterprise 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. WATER FUND To account for the provision of water services to City residents and some out -of -city customers. 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. SEWER FUND To account for the provision of services to City residents and some out -of -city customers. 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. SANITATION FUND To account for the provision of garbage and trash removal service to the residents of the City. All activities necessary to the provision of these services are accounted for in this fund. STORMWATER UTILITY FUND To account for the construction and maintenance of stormwater drainage systems within the City. All activities necessary to the provision of this service are accounted for in this fund. CITY OF CLERMONT, FLORIDA COMBINING BALANCE SHEET ALL ENTERPRISE FUNDS September 30, 2002 Total Storm- Enterprise Water Sewer Sanitation Water Funds Assets: Current assets: Cash and cash equivalents $ 140,202 $ 59,287 $ 25,813 $ 73,772 $ 299,074 Investments 2,995,400 651,666 108,703 379,779 4,135,548 Receivables: Accounts 212,485 177,655 124,613 46,406 561,159 Interest 29,797 23,671 - - 53,468 Other 18,098 984 - - 19,082 Interfund receivables 123,102 - - - 123,102 Prepaid items 9,244 19,623 11,855 1,956 42,678 Inventory -materials 21,729 - - - 21,729 Total current assets 3,550,057 932,886 270,984 501,913 5,255,840 Restricted assets: Cash and cash equivalents 361,152 559,848 - - 921,000 Investments 6,680,219 6,918,052 - - 13,598,271 Total restricted assets 7,041,371 7,477,900 - - 14,519,271 Fixed assets: Property, plant and equipment 9,367,809 14,796,166 1,071,702 1,051,757 26,287,434 Less: accumulated depreciation (3,517,651) (4,263,724) (723,704) (115,859) (8,620,938) Construction in progress 953,183 8,953,746 - - 9,906,929 Total fixed assets - net 6,803,341 19,486,188 347,998 935,898 27,573,425 Other assets: Deferred charges 135,677 241,204 - - 376,881 Total assets $ 17,530,446 $ 28,138,178 $ 618,982 $ 1,437,811 $ 47,725,417 49 Total Storm- Enterprise Water Sewer Sanitation Water Funds Liabilities and Fund Equity: Current liabilities (payable from current assets): Accounts payable $ 205,242 $ 639,498 $ 7,196 $ 457 $ 852,393 Accrued expenses 13,451 11,508 5,863 1,414 32,236 Retainage payable 34,581 - - - 34,581 Interfund payabies 10,091 133,241 5,012 1,157 149,501 Total current liabilities (payable from current assets) 263,365 784,247 18,071 3,028 1,068,711 Current liabilities (payable from restricted assets): Retainage payable - 501,366 - - 501,366 Customer deposits 134,678 - - - 134,678 Accrued interest 111,855 198,854 - - 310,709 Revenue bonds payable Total current liabilities (payable from restricted assets) 246,533 700,220 - - 946,753 Long-term liabilities Accrued annual leave 66,128 41,754 21,159 4,190 133,231 Revenue bonds payable 7,091,381 10,150,267 - - 17,241,648 Total long-term liabilities 7,157,509 10,192,021 21,159 4,190 17,374,879 Total liabilities 7,667,407 11,676,488 39,230 7,218 19,390,343 Fund Equity Contributed capital 2,592,697 8,252,325 101,722 136,547 11,083,291 Retained earnings: Reserved for repairs & replacement 146,218 103,782 - 250,000 Reserved for expansion 3,542,630 6,824,037 - - 10,366,667 Unreserved 3,581,494 1,281,546 478,030 1,294,046 6,635,116 Total retained earnings 7,270,342 8,209,365 478,030 1,294,046 17,251,783 Total fund equity 9,863,039 16,461,690 579,752 1,430,593 28,335,074 Total liabilities & fund equity $ 17,530,446 $ 28,138,178 $ 618,982 $ 1,437,811 $ 47,725,417 50 CITY OF CLERMONT, FLORIDA COMBI ALL For The Year Ended September 30, 2002 Total Storm- Enterprise Water Sewer Sanitation Water Funds Operating Revenues: User charges $ 3,071,937 $ 1,833,197 $ 1,344,121 $ 449,227 $ 6,698,482 Miscellaneous 147,328 1,976 18,206 249 167,759 Total operating revenues 3,219,265 1,835,173 1,362,327 449,476 6,866,241 Operating Expenses: Personal services 695,938 600,162 360,079 78,544 1,734,723 Utilities 205,577 240,578 894 - 447,049 Dumping fees - 97,632 200,806 22,098 320,536 Administrative services 116,516 145,692 35,075 22,929 320,212 Repairs and maintenance 258,222 282,407 18,520 4,251 563,400 Depreciation and amortization 279,711 361,581 65,131 23,652 730,075 Professional services 78,816 53,788 436,889 1,745 571,238 Insurance 17,058 28,382 13,895 2,230 61,565 Operating supplies 40,028 38,274 26,204 1,630 106,136 Office expense 28,209 20,329 6,440 2,754 57,732 Bad debt 2,506 2,442 706 400 6,054 Total operating expenses 1,722,581 1,871,267 1,164,639 160,233 4,918,720 Operating income (loss) 1,496,684 (36,094) 197,688 289,243 1,947,521 Nonoperating Revenue (Expenses): Impact fees from developers 1,343,872 3,640,442 - - 4,984,314 Interest revenue 161,866 257,303 2,855 9,126 431,150 Interest expense (343,731) _ 4� - - (814,827)_ Total nonoperating revenue 1,162,007 3,426,649 2,855 9,126 4,600,637 Income (loss) before operating transfers 2,658,691 3,390,555 200,543 298,369 6,548,158 Operating Transfers: Operating transfers in - - - 205,000 205,000 Operating transfers out (285,075) (5,054) 3,369 (1,685) (295,183) Net operating transfers (285,075) (5,054) �3,369) 203,315 (90,183) Net income (loss) 2,373,616 3,385,501 197,174 501,684 6,457,975 Retained Earnings - Beginning of Year - As Previously Stated 4,113,867 1,793,912 280,856 792,362 6,980,997 Prior Period Adjustments: Contributed capital errors 915,987 3,029,952 - - 3,945,939 Capitalization of fixed assets errors (133,128) - - - (133,128) 782,859 3,029,952 - - 3,812,811 Retained Earnings - Beginning of Year - As Restated 4,896,726 4,823,864 280,856 792,362 10,793,808 Retained Earnings - End of Year $ 7,270,342 �$ 8,209,365 $ 478,030 $ 1,294,046 $ 17,251,783 51 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF CASH FLOWS ALL ENTERPRISE FUNDS For The Year Ended September 30, 2002 Total Storm- Enterprise Water Sewer Sanitation Water Funds Cash Flows from Operating Activities: Receipts from customers $ 3,228,965 $ 1,834,256 $ 1,343,938 $ 444,228 $ 6,851,387 Payments to suppliers (583,356) (1,170,860) (833,516) (63,405) (2,651,137) Payments to employees (629,810j (558,408) (338,920) (74,3541 1,601,492) Net cash provided by operating activities 2,015,799 104,988 171,502 306,469 2,598,758 Cash Flows from Non -Capital Financing Activities: Short term interfund advance (120,176) 142,630 (17,843) 73 4,684 Operating transfers in - 205,000 205,000 Operating transfers out (285,075) (5,054) (3,369) (1,685) =295,183) Net cash provided (used) by non -capital financing activities (405,251) 137,576 (21,212) 203,388 (85,499) Cash Flows from Capital and Related Financing Activities: Acquisition and construction of fixed assets (875,933) (6,982,570) (73,488) (396,077) (8,328,068) Interest paid on bonds and leases (330,849) (445,411) (776,260) Impact fees received 1,343,872 3,640,442 4,984,314 Net cash provided (used) by capital and related financing activities 137,090 (3,787,539) (73,488) (396,077) (4,120,014) Cash Flows from Investing Activities Interest received 161,866 257,303 2,855 9,126 431,150 Investment sales - 3,224,910 - 3,224,910 Investment purchases (2,358,1= 56,430) (310,616) (2,725,207) Net cash provided (used) by investing activities (2,196,295) 3,482,213 (53,575) 301,490) 930,853 Net (Decrease) Increase in Cash and Cash Equivalents (448,657) (62,762) 23,227 (187,710) (675,902) Cash and Cash Equivalents at Beginning of Year 950,011 681,897 2,586 261,482 1,895,976 Cash and Cash Equivalents at End of Year $ 501,354 $ 619,135 $ 25,813 $ 73,772 $ 1,220,074 Classified As: Current assets $ 140,202 $ 59,287 $ 25,813 $ 73,772 $ 299,074 Restricted assets 361,152 559,848 - - 921,000 Total $ 501,354 $ 619,135 1 25,813 $ 73,772 $ 1,220,074 52 Water Sewer Total Storm- Enterprise Sanitation Water Funds Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating income (loss) $ 1,496,684 $ (36,094) $ 197,688 $ 289,243 $ 1,947,521 Adjustments Not Affecting Cash: Depreciation and amortization Change in Assets and Liabilities: Increase in accounts receivable Increase in prepaids Decrease in inventory Increase (decrease) in accounts payable Increase (decrease) in accrued expenses Decrease in retainage payable Increase in accrued annual leave Increase in customer deposits Total adjustments Net Cash Provided by Operating Activities 279,711 361,581 65,131 23,652 730,075 (15,429) (917) (18,389) (5,248) (39,983) (866) (2,587) (4,786) (1,034) (9,273) 17,382 - 17,382 179,690 551,803 (85,334) (4,802) 641,357 (22,402) (12,422) (3,967) 468 (38,323) (10,228) (798,130) - - (808,358) 66,128 41,754 21,159 4,190 133,231 25,129 - 25,129 519,115 141,082 (26,186) 17,226 651,237 $ 2,015,799 $ 104,988 $ 171,502 $ 306,469 $ 2,598,758 53 AIM I FIDUCIARY FUND TYPES OF TRUSTFUNDS Trust Funds are used to account for assets held by the City in a trustee capacity. PENSION TRUST FUNDS: GENERAL EMPLOYEES PENSION TRUST FUND To account for the accumulation of resources to be used for the retirement annuities of all full-time permanent employees, except police officers and firefighters. The City maintains defined benefit and defined contribution plans for its general employees. Annual contributions made to the defined benefit plan are 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 money based upon the number of police officers and the City contributes an amount determined by an actuarial study. FIREFIGHERS 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. NON -EXPENDABLE TRUST FUND: 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. EXPENDABLE TRUST FUND: COMMUNITY REDEVELOPMENT FUND To account for funds administered by Downtown Clermont Redevelopment Agency. The agency is authorized to use the funds to finance community redevelopment projects within the downtown area. CITY OF CLERMONT, FLORIDA COMBINING BALANCE SHEET TRUST FUNDS September 30, 2002 Assets: Cash and cash equivalents Investments Interfund receivable Total assets Liabilities: Accounts payable Interfund payable Interfund advances Fund Balances: Reserved for downtown redevelopment Reserved for employees' pension benefits Reserved for cemetery care Total fund balances Total liabilities and fund balances Expendable Pension Nonexpendable Trust Trust Trust Fund Funds Fund Community Cemetery Redevelopment Public Perpetual Fund Employees Care Totals $ - $ - $ 7,730 $ 7,730 - 5,489,914 380,870 5,870,784 - 61,821 - 61,821 $ - $5,551,735 $ 388,600 $5,940,335 $ - $ 22,170 $ - $ 22,170 14,680 - - 14,680 44,041 - - 44,041 58,721 22,170 - 80,891 (58,721) - - (58,721) - 5,529,565 - 5,529,565 - - 388,600 388,600 (58,721) 5,529,565 388,600 5,859,444 $ - $5,551,735 $ 388,600 $5,940,335 54 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF PENSION FUND NET ASSETS September 30, 2002 General Employees Defined Defined Police Firefighter Benefit Contribution Pension Pension Totals Assets: Investments (at fair value) $ 852,955 $ 1,429,071 $ 2,368,335 $ 839,553 $ 5,489,914 Receivables: Interfund - 61,821 - - 61,821 Total assets 852,955 1,490,892 2,368,335 839,553 5,551,735 Liabilities: Accounts payable - - - 22,170 22,170 Total liabilities - - - 22,170 22,170 Net Assets Held in Trust for Pension Benefits (A schedule of funding progress for each Plan is presented on page 30) $ 852,955 $ 1,490,892 $ 2,368,335 $ 817,383 $ 5,529,565 55 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF CHANGES IN PENSION FUND For The Year Ended September 30, 2002 General Employees Defined Defined Police Firefighter Benefit Contribution Pension Pension Totals Additions: Contributions: Employer $ - $ 112,891 $ - $ - $ 112,891 Plan Members - - 13,146 4,833 17,979 State - - 113,749 57,153 170,902 Total contributions - 112,891 126,895 61,986 301,772 Investment income: Investment income (loss) (19,827) (38,097) (63,115) (23,657) (144,696) Less: investment expense i5,1W �(6,779) (7,6291 (5,224) (24,741) Net investment income (loss) 74,936) (44,876) 70,744 28,881 169,437 Total additions (24,936y 68,015 56,151 33,105 132,335 Deductions: Benefits/distributions 96,283 - 80,093 22,612 198,988 Total deductions 96,283 - 80,093 22,612 198,988 Net Increase (Decrease) (121,219) 68,015 (23,942) 10,493 (66,653) Net Assets Held in Trust for Pension Benefits: Beginning of year 974,174 1,422,877 2,392,277 806,890 5,596,218 End of year $ 852,955 $ 1,490,892 $ 2,368,335 $ 817,383 $ 5,529,565 56 ACCOUNT GROUPS ACCOUNT GROUPS GENERAL FIXED ASSETS ACCOUNT GROUP This is a self -balancing account group used to record the fixed assets of the City that are not used in proprietary fund operations or accounted for in trust funds. CITY OF CLERMONT, FLORIDA SCHEDULE OF GENERAL FIXED ASSETS BY SOURCES September 30, 2002 General Fixed Assets: Land $ 2,667,480 Buildings 4,092,572 Improvements other than buildings 7,950,372 Equipment and vehicles 3,361,041 Construction in progress 2,168,439 Total General Fixed Assets $ 20,239,904 Revenue Bonds $ 3,980,102 Federal, state and local grants 1,568,444 General Fund revenues 7,491,652 Special Revenue Fund revenues 6,369,118 Gifts and other 830,588 Total Investment in General Fixed Assets $ 20,239,904 57 CITY OF CLERMONT, FLORIDA SCHEDULE OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY For The Year Ended September 30, 2002 Improvements Other Than Construction Land Buildings Buildings Equipment In Progress Totals General Government $ 208,848 $ 83,896 $ - $ 350,979 $ 1,025,376 $ 1,669,099 Public Safety 183,458 2,238,417 - 2,221,261 - 4,643,136 Physical Environment 47,168 728,159 107,574 149,979 - 1,032,880 Transportation - - 2,576,937 141,676 1,143,063 3,861,676 Culture & Recreation 1,999,898 956,830 5,119,488 475,712 - 8,551,928 Older assets not maintained by function 228,108 85,270 146,373 21,434 - 481,185 Total $ 2,667,480 $4,092,572 $ 7,950,372 $ 3,361,041 $ 2,168,439 $20,239,904 Deletions Balance and Balance 10-01-01 Additions Transfers 09-30-02 General Government $ 865,512 $1,027,200 $ (223,613) $ 1,669,099 Public Safety 4,486,938 293,338 (137,140) 4,643,136 Physical Environment 1,157,862 14,669 (139,651) 1,032,880 Transportation 2,725,952 1,158,011 (22,287) 3,861,676 Culture & Recreation 7,810,517 773,702 (32,291) 8,551,928 Older assets not maintained by function 481,185 - - 481,185 Total $17,527,966 $ 3,266,920 $ (554,982) $ 20,239,904 STATISTICAL SECTION Statistical tables differ from financial statements because they corer more than one fiscal year and may present non -accounting data. These tables reflect socia( and economic data, financial trends, and the fiscal capacity ❑f the City. CITY OF CLERMONT, FLORIDA COMMENTS ON THE STATISTICAL SECTION SEPTEMBER 30, 2002 The following Statistical Tables recommended by the National Council on Governmental Accounting are not included for the reasons stated below: • Tables that concern General Obligation Debt are omitted because neither the City nor other overlapping Governments has incurred tax -supported debt. • The Legal Debt Margin Computation Table is not presented because there is no law or ordinance that sets the maximum amount of debt the City is legally permitted to issue. 59 CITY OF CLERMONT, FLORIDA EXPENDITURES BY FUNCTION (1) LAST TEN FISCAL YEARS FISCAL GENERAL PUBLIC PHYSICAL YEAR GOVERNMENT SAFETY ENVIRONMENT 1992-93 $446,284 $997,295 $137,960 1993-94 420,678 1,017,962 144,789 1994-95 492,751 1,063,691 134,633 1995-96 561,876 1,257,255 112,794 1996-97 636,895 1,299,427 126,409 1997-98 808,901 1,633,630 152,476 1998-99 1,059,558 1,733,444 137,219 1999-00 942,498 3,049,106 134,486 2000-01 1,098,769 3,349,348 211,801 2001-02 2,143,890 3,397,986 41,611 (1) Includes General, Special Revenue, and Capital Projects Funds. Excludes Debt Service. (2) Community Development Block Grant expenditures were included in the 1992-93, 1995-96, 1996-97, 1997-98 and 1998-99 Fiscal Years. .E TABLE 1 (2) ECONOMIC HUMAN CULTURE AND TRANSPORTATION ENVIRONMENT SERVICES RECREATION TOTAL $283,169 $545,518 $15,317 $518,837 $2,944,380 257,539 14,065 17,034 573,517 2,445,584 413,565 10,895 17,141 934,829 3,067,505 448,615 89,101 20,191 1,145,205 : 3,635,037 912,130 247,422 20,974 1,205,642 4,448,899 589,385 416,930 24,150 743,864 4,369,336 437,386 36,111 25,794 1,347,959 4,777,471 494,953 25,586 24,914 1,733,423 6,404,966 639,780 102,323 19,573 2,242,733 7,664,327 640,053 1,118,029 69,479 1,936,273 .9,347,321 61 CITY OF CLERMONT, FLORIDA REVENUE BY SOURCE (1) LAST TEN FISCAL YEARS LICENSES CHARGES FISCAL AND INTER- FOR YEAR TAXES PERMITS GOVERNMENTAL SERVICES 1992-93 $1,793,267 $40,054 $857,841 $36,662 1993-94 1,983,016 39,910 505,432 38,402 1994-95 2,142,822 67,549 576,484 57,241 1995-96 2,377,962 84,260 665,899 32,537 1996-97 2,497,102 97,347 988,581 46,354 1997-98 2,769,826 133,595 1,012,582 42,459 1998-99 3,171,446 149,702 872,081 44,336 1999-00 3,911,066 188,517 959,751 60,148 2000=01 4,873,847 211,101 930,028 36,613 2001-02 5,677,448 252,702 1,407,363 367,279 (1) Includes General, Special Revenue, Debt Service and Capital Projects Funds. 62 TABLE 2 FINES INTEREST AND ON IMPACT FORFEITURES INVESTMENTS FEES MISCELLANEOUS TOTAL $75,224 $49,740 $66,962 $154,318 $3,074,068 91,066 9,906 17,681 122,270 2,807,683 152,020 86,600 16,606 510,081 3,609,403 151,879 102,405 98,751 244,904 3,758,597 128,047 81,605 127,284 224,626 4,190,946 160,522 85,140 200,960 293,853 4,698,937 108,720 86,799 240,412 311,494 4,984,990 174,044 148,136 996,145 1,258,318 7,696,125 145,564 241,756 944,819 1,157,372 8,541,100 111,517 140,425 1,314,171 177,322 9,448,227 63 CITY OF CLERMONT, FLORIDA PROPERTY TAX LEVIES, TAX COLLECTIONS AND ASSESSED VALUATIONS LAST TEN FISCAL YEARS (2) ESTIMATED (1) (4) FISCAL TAX ACTUAL ASSESSED TAX YEAR YEAR VALUE VALUATION RATE 1992-93 1992 $190,878,314 $171,790,483 2.729 1993-94 1993 190,036,425 171,032,783 2.979 1994-95 1994 206,921,182 186,229,064 2.979 1995-96 1995 228,727,934 205,855,141 2.979 1996-97 1996 236, 824,197 213,141,778 2.979 199.7-98 1997 274,964,642 247,468,178 2.979 1998-99 1998 324,049,311 291,644,380 2.979 1999-00 1999 396,645,279 356,980,751 3.479 2000-01 2000 500,572,450 450,515,205 3.729 2001-02 2001 634,697,383 571,227,645 3.729 (1) Final gross taxable assessed valuation per Lake County Property Appraiser's form DR-422. (2) The Florida Department of Revenue has certified the Lake County tax rolls as being at least 90% of the estimated actual value of property within the County. Therefore, the estimated actual values shown are calculations based on the 90% certification. (3) Outstanding delinquent taxes are not available from the Lake County Property Appraiser's office. (4) Tax rate per $1,000 of taxable valuation. 64 TABLE 3 RATIO OF RATIO OF CURRENT TAX (3) TOTAL TAX COLLECTIONS DELINQUENT TOTAL COLLECTIONS TAX CURRENT TAX TO TOTAL TAX TAX TO TOTAL LEVY COLLECTIONS LEVY COLLECTIONS COLLECTIONS TAX LEVY $468,816 $452,756 96.6% $496 $453,252 96.7% 509,504 494,226 97.0% 631 494,857 97.1 % 554,776 538,217 97.0% 893 539,110 97.2% 613,242 592,529 96.6% 2,406 594,935 97.0% 634,949 608,205 95.8% 9,224 617,429 97.2% 737,207 700,112 95.0% 9,841 709,953 96.3% 868,809 836,304 96.3% 1,604 837,908 96.4% 1,241,936 1,200,779 96.7% 4,492 1,205,271 97.0% 1,679,971 1,606,686 95.6% 9,190 1,615,876 96.2% 2,130,108 2,022,265 94.9% 16,263 2,038,529 95.7% 65 CITY OF CLERMONT, FLORIDA PROPERTY TAX RATES - DIRECT AND ALL OVERLAPPING GOVERNMENTS (1) LAST TEN FISCAL YEARS (2) LAKE COUNTY FISCAL TAX LAKE MSTU YEAR YEAR CITY COUNTY STORMWATER 1992-93 1992 2.729 4.864 0.000 1993-94 1993 2.979 5.135 0.000 1994-95 1994 2.979 5.135 0.000 1995-96 1995 2.979 4.927 0.000 1996-97 1996 2.979 4.909 0.000 1997-98 1997 2.979 4.733 0.000 1998-99 1998 2.979 4.733 0.000 1999-00 1999 3.479 4.733 0.100 2000-01 2000 3.729 5.117 0.200 2001-02 2001 3.729 5.117 0.300 (1) Information was obtained from the City of Clermont tax rolls, as prepared by the Lake County Property Appraiser's office. (2) Tax rate per $1,000 of taxable valuation. i• TABLE 4 LAKE COUNTY LAKE COUNTY SOUTH LAKE ST. JOHNS RIVER SCHOOL WATER HOSPITAL WATER MANAGEMENT DISTRICT AUTHORITY DISTRICT DISTRICT TOTAL 9.005 0.740 2.0000 0.358 19.6960 8.938 0.517 2.0000 0.470 20.0390 8.515 0.400 2.0000 0.482 19.5110 9.678 0.384 2.0000 0.482 20.4500 9.228 0.384 2.0000 0.482 19.9820 9.100 0.384 2.0000 0.482 19.6780 9.190 0.384 2.0000 0.482 19.7680 8.742 0.500 1.0000 0.482 19.0360 8.495 0.500 1.5500 0.472 20.0630 8.202 0.500 1.5289 0.462 19.8389 67 g �� ® &< CITY OF CLERMONT, FLORIDA WATER AND SEWER CUSTOMER DATA LAST TEN FISCAL YEARS NUMBER OF CUSTOMERS FISCAL WA I tK YEAR RESIDENTIAL COMMERCIAL 1992-93 2484 366 1993-94 2526 385 1994-95 3136 392 1995-96 3483 391 1996-97 3987 439 1997-98 4549 447 1998-99 5009 490 1999-00 5992 531 2000-01 7303 579 2001-02 8461 644 SEWER RESIDENTIAL COMMERCIAL 1893 313 1931 330 1978 350 2334 358 2770 386 3099 388 3328 443 3928 458 5001 511 6243 581 Source: Water and Sewer Customer Data Reports as of September 30 TABLE 5 ANNUAL WATER USAGE (GAL) 465,789,000 493, 821, 000 482,962,000 630,763,000 833,834,000 1,087,078,000 1,146,663,000 1,394,359,000 1,365,196,000 2,161,515,000 CITY OF CLERMONT, FLORIDA UTILITY REVENUE BOND COVERAGE- ALL UTILITY REVENUE BONDS LAST TEN FISCAL YEARS TOTAL (1) FISCAL SYSTEM OPERATING YEAR REVENUES EXPENSES 1992-93 $1,306,683 $794,614 1993-94 1,315,271 956,638 1994-95 1,569,180 948,234 1995-96 1,997,673 1,038,809 1996-97 2,277,479 1,240,707 1997-98 2,641,987 1,514,280 1998-99 2,968,098 1,737,216 1999-00 3,832,369 2,122,938 2000-01 5,082,750 2,236,146 2001-02 5,473,607 2,952,556 (1) Excludes interest expense and depreciation. (2) Maximum debt service in any subsequent year is $1,304,315 TABLE 6 (2) DEBT NET SERVICE REVENUES REQUIREMENTS COVERAGE 512,069 338,256 1.51 % 358,633 290,083 1.24% 620,946 326,420 1.90% 958,864 509,355 1.88% 1,036,772 708,660 1.46% 1,127,707 711,250 1.59% 1,230,882 726,858 1.69% 1,709,431 724,400 2.36% 2,846,604 932,127 3.05% 2,521,051 932,128 2.70% 70 CITY OF CLERMONT, FLORIDA DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS TABLE 7 (2) (3) FISCAL (1) SCHOOL UNEMPLOYMENT YEAR POPULATION ENROLLMENT RATE 1992-93 7,013 1,482 4.3% 1993-94 7,174 1,629 8.1 % 1994-95 7,233 1,787 5.0% 1995-96 7,291 2,381 5.2% 1996-97 7,582 2,180 3.1 % 1997-98 8,202 2,412 2.2% 1998-99 8,861 3,683 2.7% 1999-00 9,455 3,841 2.6% 2000-01 10,571 4,500 3.4% 2001-02 13,718 4,616 4.7% DATA SOURCES: (1) College of Business Administration, University of Florida - Bureau of Economic and Business Research. (2) Figures represent grades K-9 in public schools. Source - Lake County School Board (3) Information available on countywide basis only. Data was obtained from the Florida Agency for Workforce Innovation, Labor Market Statistics, Local Area Unemployment Statistics Program, in cooperation with the U.S. Department of Labor, Burieau of Labor Statistics. 71 CITY OF CLERMONT, FLORIDA PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS (1) COMMERCIAL CONSTRUCTION FISCAL # OF YEAR UNITS VALUE (1) RESIDENTIAL CONSTRUCTION # OF UNITS VALUE 1992-93 4 $5,551,684 46 $3,051,541 1993-94 2 402,000 26 2,091,200 1994-95 2 450,000 19 1,412,837 1995-96 17 6,735,881 157 10,386,535 1996-97 14 3,340,805 289 17,797,703 1997-98 13 24,686,500 333 21,414,385 1998-99 5 17,725,000 492 34,375,122 1999-00 11 22,396,000 711 58,829,964 2000-01 17 17,264,099 884 82,040,352 2001-02 39 52,342,866 829 77,470,156 DATA SOURCES: (1) City of Clermont zoning clearances. (2) Information available on countywide basis only. Data was obtained from the Federal Deposit Insurance Corporation (FDIC) (3) Taxable assessed valuation per Lake County Property Appraiser's form DR-422. (4) Non-taxable assessed valuation per Lake County Property Appraiser's office. 72 TABLE 8 ASSESSED TAXABLE (2) PROPERTY VALUE BANK (3) (4) DEPOSITS TAXABLE NONTAXABLE $1,632,882,000 $171,790,483 $50,404,700 1,701,038,000 171,032,783 56,272,383 1,718,591,000 186,229,064 56,910,019 1,776,670,000 205,855,141 58,399,561 2,035,941,000 213,141,778 65,771,140 2,421,416,000 247,468,178 75,608,647 2,563,111,000 291,644,380 82,258,004 2,793,537,000 356,980,751 88,776,967 3,011,000,000 450,515,205 105,296,517 3,158,000,000 571,227,645 128,221,920 73 CITY OF CLERMONT, FLORIDA PRINCIPAL TAXPAYERS Clermont Center LTD 20636 Biscayne Blvd Aventura, FL 33180 Lennar Land Partners 700 NW 107th Ave Miami, FL 33172 Lennar Homes, Inc. 4902 Eisenhower Blvd #289 Tampa, FL 33634 Village at East Lake Ltd Partnership P.O. Box 560807 Dallas, TX 75356 Lucas Clermont Limited Partnership 209 E. State Street Columbus, OH 43215 Sprint -Florida Incorporated P.O. Box 12913 Shawnee Mission, KS 66212 HEP-8-Cler LC 33 SE 4th St Suite 100 Boca Raton, FL 33432 Osprey Ridge Apartments Inc. 800 N Highland Ave Suite 200 Orlando, FL 32803 Florida Power Corporation P.O. Box 14042 St. Petersburg, FL 33733 Mercator Properties, Inc. 230 Mohawk Rd. Clermont, FL 34711 TABLE 9 PERCENTAGE ASSESSED OF TOTAL VALUATION ASSESSED AS OF 1/1/02 VALUATION $11,289,332 1.98% 10,218,508 1.79% 10,118,957 1.77% 9,572,589 1.68% 7,473,076 1.31 % 7,966,530 1.39% 6,145,313 1.08% 6,076,618 1.06% 6,521,966 1.14% 5,580,947 0.98% TOTAL $80,963,836 14.17% Source: 2002 City of Clermont Tax Roll, prepared by the Lake County Property Appraiser's office. 74 CITY OF CLERMONT, FLORIDA EMPLOYER South Lake Hospital Lake County School System Publix Westminister Care of Clermont City of Clermont KMart Winn Dixie CBS Builders Supply Inc. Rolling Hills Ford Kash-N Karry LARGEST EMPLOYERS TABLE 10 NUMBER OF INDUSTRY EMPLOYEES Health Care 608 Education 435 Grocery 215 Retirement and Nursing 200 Municipality 162 Retail 120 Grocery 105 Construction Supplies 100 Automobile Dealer 85 Grocery 65 75 CITY OF CLERMONT, FLORIDA SCHEDULE OF INSURANCE COVERAGES SEPTEMBER 30, 2002 POLICY EXPIRATION TYPE OF COVERAGE & INSURER NUMBER DATE 1 IARII ITY Florida Municipal Liability FMIT 101 9/30/2002 Self Insurer's Program WORKERS COMPENSATION Florida Municipal Self FMIT 101 9/30/2002 Insurers Fund FIRE AND EXTENDED COVERAGE Florida Municipal Property FMIT 101 9/30/2002 Self -Insurers Program r[ TABLE 11 DETAILS LIMITS General Liability $100,000/Person Bodily Injury Liability $200,000/Occurrence Auto Liability Law Enforcement Liability Specific Excess Liability $1,500,000/Occurrence Public Officials Errors $1,500,000/Occurrence and Omissions Liability Finance Director -Bond $100,000 Public Employees Blanket Bond $5,000 Accidental Death-Police/Fire $50,000 Statutory Workers Compensation $100,000/500,000 per Schedule Blanket Building and Property $22,711,044 77 CITY OF CLERMONT, FLORIDA MISCELLANEOUS STATISTICAL DATA SEPTEMBER 30, 2002 Date of Incorporation Present Charter Adopted Form of Government Number of Council Members Term of Office Mayor/Council Members City Manager Area of City Municipal Boundaries Miles of Streets Number of Streetlights Cemetery Fire Protection Number of Stations Number of Volunteer Firefighters Number of Part-time Firefighters Number of Full-time Firefighters Number of Fire Hydrants Police Protection Number of Stations Number of Sworn Personnel Education Number of Schools: Elementary Middle Number of Teachers Number of Students Municipal Water Department Number of Customers Average Daily Consumption Miles of Water Mains Wastewater and Sanitary Sewers Miles of Sanitary Sewer Lines Miles of Storm Sewer Lines 1916 1962 Council -Manager Five (5) Two Years (2) Appointed 11.5 square miles 88.74 1,056 1 2 34 3 12 940 2 29 3 2 245 4,616 9,105 5,921,959 gallons 88.74 39.05 9.11 78 Recreation and Culture Number of Parks Scenic Linear Trail Fishing Piers Number of Libraries City Employees Full -Time Part -Time TABLE 12 22 with 109.4 acres 3.5 miles 4 79 %kiwi, ,,. 1 OTHER REPQ I 1 V,f,AMCDIRMIT DAMS PUCKETT REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and City Commissioners City of Clermont, Florida We have audited the general purpose financial statements of the City of Clermont, Florida, as of and for the year ended September 30, 2002, and have issued our report thereon dated December 13, 2002. 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. Compliance — As part of obtaining reasonable assurance about whether the City of Clermont, Florida's general purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. However, we noted certain immaterial instances of noncompliance that we have reported to management of the City of Clermont, Florida, in a separate letter dated December 13, 2002. Internal Control Over Financial Reporting — In planning and performing our audit, we considered the City of Clermont, Florida's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. However, we noted other matters involving the internal control over financial reporting that we have reported to management of City of Clermont, Florida in a separate letter dated December 13, 2002. MCDIRMIT DAVIS PUCKETT & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS 605 E. ROBINSON STREET, SUITE 635 • ORLANDO, FLORIDA 32801 TELEPHONE 407-843-5406 • FAx 407-649-9339 • EMAIL: INFOGMDPCPA.COM MEMBERS: PRIVATE COMPANIES PRACTICE SECTION • AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 80 This report is intended solely for the information and use of management, the City Commission 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. McDIRMIT DAVIS PUCKETT & COMPANY, LLC December 13, 2002 IN MCDIRMIT I)AVIS PUCKETT REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 The Honorable Mayor and City Commissioners City of Clermont, Florida Clermont, Florida Compliance We have audited the compliance of the City of Clermont, Florida with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, that are applicable to the major federal program for the year ended September 30, 2002. The City of Clermont's major federal program is identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to its major federal program is the responsibility of the City of Clermont, Florida management. Our responsibility is to express an opinion on the City of Clermont, Florida compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Those standards, and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about City of Clermont, Florida compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City of Clermont, Florida compliance with those requirements. In our opinion, the City of Clermont, Florida, complied, in all material respects, with the requirements referred to above that are applicable to its major federal program for the year ended September 30, 2002. MCDIRMIT DAVIS PUCKETT & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS 605 E. ROBINSON STREET, SUITE 635 - ORLANDO, FLORIDA 32801 TELEPHONE 407-843-5406 - FAx 407-649-9339 - EMAIL: INFO@MDPCPA.COM MEMBERS: PRIVATE COMPANIES PRACTICE SECTION - AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS - FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 0 Internal Control Over Compliance The management of the City of Clermont, Florida is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City of Clermont, Florida internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major state program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of management, the City, the Auditor General of the State of Florida and federal awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. December 13, 2002 M CITY OF CLERMONT, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended September 30, 2002 Federal Agency/Pass through Entity Federal Program U.S. Department of Housing and Urban Development Florida Department of Community Affairs - Small Cities Community Development Block Grant U.S. Department of Justice Florida Department of Law Enforcement - Local Law Enforcement Grant Total expenditures of federal awards CFDA Contract Number Grant Number Expenditures 01 DB-79 14.228 06-45-01-005 $1,094,175 16.592 2002-CJ-2M 06-45-02-003 11,261 $1,105,436 RE CITY OF CLERMONT, FLORIDA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended September 30, 2002 Note 1 - Basis of Presentation: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Clermont, Florida and is presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. 85 CITY OF CLERMONT, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - FEDERAL PROGRAM Year Ended September 30, 2002 A. Summary of Auditor's Results 1. The auditor's report expresses an unqualified opinion on the general purpose financial statements of the City of Clermont, Florida. 2. No instances of noncompliance material to the financial statements of the City of Clermont, Florida were disclosed during the audit. 3. The auditor's report on compliance for the major federal program for the City of Clermont, Florida, expresses an unqualified opinion. 4. The program tested as major program included the following: Federal Program Federal CFDA No. U.S. Department of Housing and Urban Development Community Development Block Grant 14.228 5. The threshold for distinguishing Type A and Type B programs/projects was $300,000 for major federal programs. M.