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Comprehensive Annual Financial Report - 2014-2015City Of C pie rm o n t IFIRMIM-M Comprehensive Annua[ FinanciaCWsport Tiscaf Tear Ended Septem6er30.. 2015 Lake W k watFia (Preserve On November 15, 2015, the City of Clermont unveifedits newest park Lake Yfiawatha (Preserve. It is a 220 -acre, passive park which includes two dog parks, picnic pavilions anda playgroundwith a working, old fashionedwater tank r1he park is located at 450 X. 121h Street in Clermont. Owmpions Splash Park r1he City also officially opened the new Champions Splash Tarkfocated at Water Tarkon �44arch 27, 2015. Champions Splash Sarkis a colorful 3,245 square foot facility with aeriafspray features open to children of affages from -blanch through October. CITY OT CLE"09V ' Comprehensive Annna! Financia! deport For The Tear Endedsoptem6et 30, 2015 TYepared by: Tinance Department cLEIRlv(ONT Choice of Champions' CITY OF CLERMONT COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Year Ended September 30, 2015 Pape I. Introductory Section: Table of Contents i Letter of Transmittal v GFOA Certificate of Achievement ix List of Principal Officials xi Organizational Chart xii II. Financial Section: Independent Auditor's Report 1 Management's Discussion and Analysis 3 Basic Financial Statements: Government -Wide Financial Statements: Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements: Balance Sheet - Governmental Funds 17 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 18 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of 19 Activities Statement of Revenues, Expenditures and Changes in Fund 20 Balances - Budget and Actual - General Fund Statement of Revenues, Expenditures and Changes in Fund 22 Balances - Budget and Actual — Infrastructure Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund 23 Balances - Budget and Actual — Community Redevelopment Special Revenue Fund Statement of Net Position - Proprietary Funds 24 Statement of Revenues, Expenses and Changes in 27 Fund Net Position - Proprietary Funds Statement of Cash Flows — Proprietary Funds 28 Statement of Fiduciary Net Position - Fiduciary Funds 30 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 31 Notes to Financial Statements 33 Required Supplementary Information 71 Major Governmental Funds: 79 Capital Projects Fund 80 Other Governmental Funds: 81 Combining Balance Sheet— Other Governmental Funds 82 CITY OF CLERMONT COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - Continued Year Ended September 30, 2015 Pape II. Financial Section - Continued: Combining Statement of Revenues, Expenditures and Changes In Fund Balances - Other Governmental Funds 84 Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual: Special Revenue Funds 86 Debt Service Fund 90 Combining Statement of Fiduciary Net Position 92 Combining Statement of Changes in Fiduciary Net Position 93 III. Statistical Section: Net Position by Component 96 Changes in Net Position 98 Fund Balances of Governmental Funds 102 Changes in Fund Balances of Governmental Funds 104 Governmental Activities Tax Revenues by Source 106 Assessed Value and Estimated Actual Value of Taxable Property 107 Property Tax Rates — Direct and Overlapping Governments 108 Principal Property Taxpayers 109 Property Tax Levies and Collections 110 Ratios of Outstanding Debt by Type 111 Direct and Overlapping Governmental Activities Debt 112 Pledged -Revenue Coverage 113 Demographic and Economic Statistics 116 Principal Employers 117 Principal Water Customers 118 Principal Sewer Customers 119 Full-time Equivalent City Government Employees by Function 120 Operating Indicators by Function 122 Capital Asset Statistics by Function 124 IV. Other Reports: Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 127 Independent Auditor's Report on Compliance for Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 129 Schedule of Expenditures of Federal Awards 131 Notes to Schedule of Expenditures of Federal Awards 132 CITY OF CLERMONT COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - Continued Year Ended September 30, 2015 IV. Other Reports - Continued Schedule of Findings and Questioned Costs — Federal Awards 133 Management Letter 135 Communication with those Charged with Governance 137 Independent Auditor's Report on Compliance with the Requirements of Section 218.415, Florida Statues 141 cLEIRlv(ONT Choice of Champions' iv CLER 0 Choice of Champions April 27, 2016 To the Honorable Mayor and City Council and Citizens of the City of Clermont, Florida We are pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Clermont, Florida, for the fiscal year ended September 30, 2015. State law requires that every general-purpose local government publish within nine months of the close of each fiscal year a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ended September 30, 2015. Management assumes full responsibility for the completeness and reliability of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Clermont has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Clermont's financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Because the cost of internal controls should not outweigh their benefits, the City of Clermont's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Clermont's financial statements have been audited by McDirmit Davis & Company, LLC, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Clermont for the fiscal year ended September 30, 2015, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Clermont's financial statements for the fiscal year ended September 30, 2015, are fairly presented in conformity with accounting principles generally accepted in the United States of America. The independent auditor's report is presented as the first component of the financial section of this report. Management's discussion and analysis (MD&A) immediately follows the independent auditor's report and provides narrative introduction, overview, and analysis of the basic financial statements. The MD&A provides "financial highlights" and interprets the financial reports by analyzing trends and by explaining changes, fluctuations and variances in the financial data. In addition, the MD&A is intended to disclose any known significant events or decisions that affect the financial condition of the City. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. 685 W. Montrose Street • Clermont, FL 34711 • www.ClermontFL.gov V Profile of the City of Clermont The City was founded in 1884 and incorporated in 1916. The City currently has a land area of 16.65 square miles and population of approximately 32,348. The City is located in south Lake County, approximately 22 miles west of the City of Orlando and about 25 miles northwest of Walt Disney World. Clermont, known as "Choice Of Champions", is truly the crossroads of Florida, at the intersection of State Road 50 that runs east and west across the state and U.S. Highway 27, which runs north and south through the center of the state. Clermont is on a chain of 15 lakes connected by the winding Palatlakaha River in the Ocklawaha Basin of tributaries of the St. Johns River, the only river system in the United States of America that flows north. The lakes offer residents the opportunity for excellent fishing, boating, swimming and other water sports including competitive skiing and wakeboarding offered by world-class instructional schools. The City of Clermont is known for its scenic beauty, relaxed lifestyle, recreational facilities and temperate climate. Residents have a wide variety of housing and property -ownership opportunities, including lakefront and lake -access property, golf -course communities, homes in existing neighborhoods, residential retirement communities, and new subdivisions. The City of Clermont Parks and Recreation Department operates 23 parks, 5.7 miles of scenic paved trails, 10 piers measuring a total of 1,818 feet, 1-800 foot boardwalk, 7 special purpose buildings and a boat ramp. The City of Clermont provides a full range of services as directed by its charter. These include police and fire protection; streets and sidewalk maintenance, planning and development, code enforcement, recreational facilities and programs, cemetery and general administrative functions. The City also provides potable water, wastewater collection and treatment, reclaimed water production and distribution, stormwater treatment, solid waste collection, and recycling services. The City operates according to a Council/Manager form of government, with an appointed City Manager, four elected City Council members and an elected Mayor. The governing body has legislative responsibilities including setting policy, passing ordinances, adopting the budget, appointing committees, and hiring the City's Manager. The City Manager is responsible for carrying out the policies and ordinances of the governing body, for overseeing the day-to-day operations of the government, and for hiring the directors of the various departments. The annual budget serves as the foundation the City of Clermont's financial planning and control. All departments of the City of Clermont are required to submit requests for appropriations to the City Manager. The City Manager then uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the Council for review. The City Council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than September 30, the close of the City of Clermont's fiscal year. The appropriated budget is prepared by fund (e.g. general fund), and department (e.g. fire department). The City Manager may make transfers of appropriations within departments; however, any revisions that alter the total appropriations of a department must be approved by City Council. Original and final amended budget -to -actual comparisons are provided in this report for each individual governmental fund. The General Fund is presented on pages 20-21, the Infrastructure Fund is presented on page 22 and the Community Redevelopment Special Revenue fund is presented on page 23 as part of the basic financial statements for the governmental funds. The Capital Projects Fund is presented on page 80, followed by the other governmental funds, which start on page 82. The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Clermont operates. 685 W. Montrose Street • Clermont, FL 34711 • www.ClermontFL.gov Vi Local economy. The City of Clermont is essentially residential in character and its economy is centered in retail, real estate, personal services and healthcare. At September 30, 2015, Lake County's unemployment rate was 5.2%, which is a decrease of 1.1 %from 2014. Clermont's unemployment rate was below the County average for the 6'h year in a row at 4.8% for 2015. This is lower than both the state's average of 5.4% and the national average of 4.9%. Educational institutions in Clermont such as Lake - Sumter State College and the University of Central Florida assist in supplying a skilled labor force. The cost of living for the region is below the national average. There is no personal income tax, either locally or state-wide. Sales tax, currently at 7%, is not charged on food or medicine. One cent of the sales tax charged within the county is limited to $50 per transaction (1 % of $5,000). As discussed in the MD&A, this additional penny sales tax must be used for infrastructure including roads, buildings, land, land improvements and certain equipment. Major initiatives. The following items are capital projects that are currently in the planning/design phase for the City: • The replacement of the existing Public Works Operations Complex — A space needs assessment recommends a new public works operating complex with approximately 45,100 square feet and anticipated to cost approximately $8 million. The project is anticipated to be funded by a debt issuance pledged potentially by the one cent sales tax. • Implementation of the Master Plan — In 2015, the Clermont City Council approved a Master Plan that will serve as a blueprint for the city's future during the next five, 10 and 20 years. The Master Plan offers an exciting view of the future of Clermont, the Choice of Champions. While much of the focus is on the Downtown -Waterfront District, the Master Plan offers insights on how to keep the growing city connected and how to protect the very charms that have drawn hundreds of thousands to this internationally -recognized city that is one of the nation's top places to live and also a training ground for the world's elite athletes. The Master Plan projects are estimated to cost approximately $19.2 million and will be funded by the Community Redevelopment Fund, Stormwater Fund, one cent sales tax and grants. Long-term financial planning. The City uses an extensive water and sewer master plan to manage growth in the water and sewer utility systems. The plan outlines water and sewer line size requirements for planned development with rough cost estimates. The plan also has benchmarks for plant expansions and additional well requirements. The Clermont City Council and management through careful short and long range planning and sound management practices are committed to budgeting and managing all resources in the most cost effective manner. Relevant financial policies. The City regularly reviews revenues and expenditures throughout the fiscal year. During the course of the year, if actual revenues are expected to fall short of the budgeted amount, expenditures are reduced to ensure that a shortage of funds or a significant use of fund balance does not occur. The City administers a cash management and investment program that seeks to maximize, in order of priority, the preservation of funds, liquidity and interest earnings over its cash and investments. Cash resources of the individual funds are combined to form a pool of cash and investments. The average cash and investment pool balance during the year (not including pension funds) was $57,432,799 and the 685 W. Montrose Street • Clermont, FL 34711 • www.ClermontFL.gov Vii sage Investment earnings ate was 0.05%. Investment Income includes the change In the fair value of investments During the year monies were invested in accordance with the Cry's investment policy. Pension fund assets were Invested In accordance with the City Investment Policy for Retirement Funds. The total pension fund cash and investments at year end were $30 941,904 and fund had a Toss on investment of 0.14% Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada FDOA) awarded a Certificate of Achievement for Excellence In Financial Reporting to the City of Clermont for Its comprehensive annual financial report for the fiscal year ended September 30, 2014. This was the 27th consecutive yearthatthe Cary award has received this prestigious ard. In orderm awarded be arded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive applial financial report. This report must satisfy both generally accepted accounting principles and cable legal requirement. A Certificate of Achievement Is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting itto the GFOA to determine is eligmiliry mranother certificate. The preparation of this reportwould not have been possible withoutthe efficient and dedicated services of the staffs In the City Manager's office and Finance Department Wewould like to express ourappreciation to all members of there departments who assisted and contributed to the preparation of this report. A special note of appreciation Is due Lacy SmitlFCasillo, Finance Managerfor herhard work and dedicated efforts In the preparation of this report. Credit also mus be given to the Mayor and the City Council for their support In maintaining the highest standards of professionalism In the management of the city of Clermontsfinances. Respectfully submitted DnarenGa�y� dos he evan Cy Manager Finn oirmr 685W Montrose Street . Clermont FL 34711 . wvwv.CleomontFLgov �J Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Clermont Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2014 Executive Director/CEO cLEIRlv(ONT Choice of Champions' CITY OF CLERMONT, FLORIDA LIST OF ELECTED AND APPOINTED OFFICIALS SEPTEMBER 30, 2015 Mayor Mayor Pro -Tem Council Member Council Member Council Member ELECTED OFFICIALS Gail L. Ash Ray Goodgame Keith Mullins Diane Travis Timothy Bates APPOINTED OFFICIALS 1 City Manager Darren Gray Assistant City Manager James Kinzler City Attorney Dan Mantzaris City Clerk Tracy Ackroyd -Howe Communications Director Doris Bloodsworth Economic Development Director James Hitt Environmental Services Director Paul Roy Finance Director Joseph Van Zile Fire Chief Carle Bishop Human Resources Director Susan Dauderis Information Technology Director Don Dennis Parks and Recreation Director Scott Davidoff Development Services Director Barbara Hollerand Police Chief Charles Broadway Public Works Director Stoney Brunson Purchasing Director Freddy Suarez xi City Attorney Citizens Clermont City Council City Ma nage r communications City Development or ti Public Economic aerk Finance serveas Technology Police Fire Works Developme Records Finance Permitting GIS Criminal 81 ds Capital CRA Management Corut sts Pr ogra in Sewer Investigations Operations Improvements Cemetery es&cords Utility Business Network Relations Control Scheduling Economic Ree R Billing TaxRecelpts Admin est an on Enfoent o cement rm Administration Inspecto re Development Election Budget Zoning Web ¢e Road Emergency Coordination Program Qualifying Theater Management patrol Medial Transportation Development Employee Utility metal Wellness Services Inn povem ents Agenda Development Cash Management Planning Appllost on Community Fire inspection Fleet Support Relations &PreventionMaintenance Building Security Services Systems Facilities Code Grounds Enforcement Maintenance cemetery Maintenance Ci to Engineer XII Committees Human/ \/ Parks& \/ Environmental /J ` Purchasing J` Recreation l` Services Program Recml trnent 81 ds Development Water Benefits Corut sts Pr ogra in Sewer Management Employee Property Facility Relations Control Scheduling Sanitation Labor Community Relations P -Cards Center Stormwater Workers' Event Compensation Fuel Pro gam Coordination Canstruc0 on Risk Theater Unit toAsset Management 0peabons Management Employee Utility metal Wellness Inn povem ents MCDIRMI'I /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Clermont, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Clermont, Florida, as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements City of Clermont's management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Clermont, as of September 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund, Infrastructure Special Revenue Fund, and Community Redevelopment Special Revenue Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. MCDZRMIT DAVIS & COMPANY, LLC 934 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO a@MCDIRMITDAVIS.COM MEMBERS. PRIVATE COMPANIES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Change in Accounting Principle As discussed in Note 1 to the financial statements, in 2015, the city adopted new accounting guidance, GASB Statement No. 68, Accounting and Financial Reporting for Pensions. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the pension and other postemployment benefits disclosures on page 3 through 14 and 71 through 77 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise City of Clermont's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, statistical section and the Schedule of Expenditures of Federal Awards, as required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements and schedules and the Schedule of Expenditures of Federal Awards are the responsibility of management and were derived from and related directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated April 26, 2016 on our consideration of City of Clermont's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Clermont's internal control over financial reporting and compliance. Orlando, FL April 26, 2016 5W,WAGE5WE9VTS(DISCE)SSI09V'.,79V ,W.9LTSIS cLEIRlv(ONT Choice of Champions' MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Clermont, Florida we offer readers of the City of Clermont's (the City) financial statements this narrative overview and analysis of the financial activities of the City of Clermont for the fiscal year ended September 30, 2015. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages iv through vii of this report. Financial Highlights • The City of Clermont's assets and deferred outflows of resources exceeded its liabilities and deferred inflows at September 30, 2015 by $164,431,319 (net position). Of this amount, $38,592,552 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors. • The City's total net position increased by $10,726,662 (or 7%) during fiscal year 2015 primarily due to the City adopting GASB Statement No. 68, Accounting and Financial Reporting of Pensions. The pronouncement required the restatement of the September 30, 2014 net position which resulted in an increase of $6,525,025. • At September 30, 2015, the City of Clermont's governmental funds reported combined ending fund balances of $17,990,507 a decrease of $913,184 from the previous fiscal year. Of this amount $7,013,550 (unassigned fund balance) is available for spending at the government's discretion. • The General Fund, the City's primary operating fund, reported an unassigned fund balance of $7,013,550, which represents 32.1 % of total General Fund expenditures. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of Clermont's basic financial statements. The City's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City of Clermont's financial position, in a manner similar to a private -sector business. They include a Statement of Net Position and a Statement of Activities. These statements appear on pages 15 and 16 of the report. The Statement of Net Position presents information on all of the City's assets and liabilities and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of Clermont that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Clermont include general government, public safety, physical environment, transportation, economic 3 environment, and culture and recreation. The business -type activities of the City of Clermont include water. sewer. sanitation. and stormwater utilities. The government -wide financial statements include only the City of Clermont itself (known as the primary governmeno and one blended component unit (The City of Clermont Community Redevelopment Trust Fund). Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Clermont, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of Clermont can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near- term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Clermont maintains ten individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Capital Projects Fund, Infrastructure Fund, and Community Redevelopment Fund, all of which are considered to be major funds. Data from the other six governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Clermont adopts an annual appropriated budget for all of its governmental funds. Budgetary comparison statements have been provided for the General Fund (pages 20-21), the Infrastructure Fund (page 22) and the Community Redevelopment Fund (page 23) to demonstrate compliance with budgets. Other major and nonmajor funds comparisons can be found beginning on page 79. The basic governmental fund financial statements can be found on pages 17 - 23 of this report. Proprietary funds. The City of Clermont maintains two types of proprietary funds: enterprise and internal service, which can be found on pages 24-29 of this report. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of Clermont uses enterprise funds to account for water, sewer, sanitation and stormwater utilities. Internal service funds are an accounting tool used to accumulate and allocate costs internally among various functions. The City utilizes an internal service fund for its health insurance. Because services accounted for in the internal service fund predominately benefit governmental rather than business -type functions, it has been included within the governmental activities in the government -wide financial statements. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for water, sewer and sanitation which are all considered to be major funds. Data for the Stormwater Fund is also included since it is the only nonmajor fund. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City of Clermont's own programs. The accounting used for fiduciary funds is much like that used for the proprietary funds. The basic fiduciary fund financial statements can be found on pages 30 - 31 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to financial statements can be found on pages 33 - 70 of this report. Other information. The combining statements referred to earlier in connection with other governmental and proprietary funds are presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 80 - 93 of this report. Government -Wide Financial Analysis The following is a summary of the City's net position for governmental and business -type activities for the current year as compared to the prior year. For more detail see the Statement of Net Position on page 15. Assets: Current and other assets Capital assets Totalassets Deferred Outflows of Resources: Deferred outflow of pension earnings Deferred charge ofrefunding Total deferred outflows of resources Liabilities: Long-term liabilities outstanding Other liabilities Total liabilities Deferred Inflow of Resources: Deferred inflow of pension earnings Net investment in capital assets Restricted Unrestricted Net Position Governmental Activities Business -type Activities Total 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 $26,304,928 54,901,599 $21,816,704 52,157,191 $42,150,163 69,800,664 $39,233,918 71,041,133 $ 68,455,091 124,702,263 $ 61,050,622 123,198,324 81,206,527 73,973,895 111,950,827 110,275,051 193,157,354 184,248,946 1,682,840 - - - - 513,138 - 546,787 1,682,840 513,138 - 546,787 1,682,840 - 513,138 546,787 2,195,978 546,787 11,703,848 2,201,433 11,761,397 2,459,166 1,540,734 15,259,180 15,692,341 1,178,172 13,244,582 17,460,613 27,453,738 3,637,338 13,905,281 14,220,563 16,799,914 16,870,513 30,705,195 31,091,076 216,818 - - - 216,818 - 47,718,124 9,399,756 11,649,388 44,115,790 9,918,073 5,719,469 56,585,567 12,135,320 26,943,164 56,680,065 10,216,975 27,054,285 104,303,691 21,535,076 38,592,552 100,795,855 20,135,048 32,773,754 Total net position $68,767,268 $59,753,332 $95,664,051 $93,951,325 $164,431,319 $153,704,657 The City's total net position at September 30, 2015 was $164,431,319. Of the City's total net position $104,303,691 (63.4%) reflects its investment in capital assets (e.g., land, buildings, improvements, infrastructure and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Clermont's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's total net position, $21,535,076 (13.19/6) represents resources that are subject to external restrictions on how they may be used. The remaining balance of the City's total net position, $38,592,552 (23.5%) is unrestricted. These assets may be used at the City's discretion in meeting its ongoing obligations to citizens and creditors. The City's net position increased by $10,726,662 during the current fiscal year. Major components of this increase are discussed in the Governmental and Business -Type Activities sections to follow. Restricted reserves represent the accumulation of impact fee funds for upcoming and ongoing capital projects. The following is a summary of the City's governmental and business -type activities for fiscal year 2014-15, including revenues and expenses, with a comparison to the prior year. For more detail see the Statement of Activities on page 16. Remainder of page intentionally left blank 11 Revenues: Program revenues - Charges forservices Cperatinggrants and contributions Captial grants and contributions General revenues - Property Taxes Business Taxes Franchise Fees Utility Taxes Intergrovernmental Investment income and miscellaneous Gain on sale of capital assets Total revenues Expenses: General government Public safety Physical envirommnet Transportation Economic environment Culture and recreation debt Water Sewer Sanitation Stormwater Total expenses Increase (Decrease) in Net Position Before Transfers Special item -loss on sale of capital asset Transfers Increase in Net Position Net Position -Beginning, as restated Net Position -Ending Governmental Activities Activities Total 2014-15 2013-14 2014-15 2013-14 1 2014-15 2013-14 $ 5,357,705 $ 4,751,091 1,597,812 938,861 498,253 1,717,851 7,192,996 6,532,656 129,620 126,172 2,502,153 2,379,312 2,952,785 2,887,161 6,644,875 6,110,184 $15,356,903 $14,697,489 275,751 - 3,219,208 2,416,757 554,883 478,577 272,353 198,224 - - 1,765 27,431,082 25,921,865 1 19,124,215 17,314,235 3,847,784 3,406,735 14,325,704 14,117,124 453,027 350,243 2,094,223 2,201,649 566,746 362,766 4,018,441 3,095,752 193,229 236,466 154 23,770,735 4,822,683 4,589,022 6,570,897 6,436,780 3,132,989 2,471,861 1,079,920 1,016,124 5,606,489 14, 513, 787 $ 20,714,608 $ 19,448,580 1,873,563 938,861 3,717,461 4,134, 608 7,192, 996 129,620 2,502,153 2,952,785 6,644,875 827,236 46,555,297 3,847,784 14,325,704 453,027 2,094,223 566,746 4,018,441 193,229 4,822,683 6,570,897 3,132, 989 1,079,920 41 6,532,656 126,172 2,379,312 2,887,161 6,110,184 676,801 1,765 43,236,100 3,406,735 14,117,124 350,243 2,201,649 362,766 3,095,752 236,466 4,589,022 6,436,780 2,471,861 1,016,124 1,931,928 2,151,130 3,517,726 2,800,448 5,449,654 4,951,578 - - (1,248,017) - (1,248,017) - 556,983 438,893 (556,983) (438,893) - - 2,488,911 2,590,023 1,712,726 2,361,555 4,201,637 4,951,578 66,278,357 57,163,309 93,951,325 91,589,770 160,229,682 148,753,079 $68,767,268 $59,753,332 $95,664,051 $93,951,325 $164,431,319 $153,704,657 II Governmental activities - Governmental activities increased the City of Clermont's net position by $9,013,936, which is primarily due to the adoption of GASB Statement No. 68 and required prior period adjustment as well as increased general government revenues and operating grants. The following graph is a comparison of program revenues and program expenses for all governmental activities. This chart is intended to give the reader an idea of the degree to which governmental activities are self-supporting. $16,000,000 $14,000,000 $12,000,000 $to, 000,000 $0,000,000 $6000,000 $4,000,000 $2,000.000 $0 0,ener GIPwemmenr PuOIIrlefet, rr onmu01le Cmure & re,re,pon P6 1 Expenses and Program Revenues - Governmental Activities The following pie chart illustrates the composition of governmental activities revenue and its percent in relation to total governmental activities revenues. Revenues by Source - Governmental Activities • I utergovemments l • Cbargesfor services • Operating grants and contributions • I nve4ment Income and miscellaneous •O[bertaxes • Capital grants and contributions •Pro perty taxes Property taxes Capital grants and mntrlbutlons, 1.8% Other taxes, 2( nvespnentlnmme and Operatlrg grants and miscellaneous, 2.0% mntrlbutlons, 5.Ex6 8 �overnmental, 24.2% rargesforery Ices, 19.5% Business -type activities - Business -type activities increased the City of Clermont's net position by $1,712,726. This change was due to increased revenue from services totaling $659,414, and capital contributions totaling $3,219,208. These contributions are water and sewer impact fees paid by developers. The fees were adopted by the City to require new development to pay its proportionate share of the capital costs necessary to accommodate new development impacts on the City's water and sewer system. The City is using this revenue for large capital projects that are currently under construction such as the Reclaim Water System Expansion and the East Water Loop. The following graph is a comparison of program revenues and program expenses for all business - type activities. This chart is intended to give the reader an idea of the degree to which business - type activities are self-supporting. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Expenses and Program Revenues - Business Type Activities $7,818,914 $8,158,903 Water Sewer San ration Stormwater The following pie chart illustrates the composition of business -type activities revenue and its percent in relation to total business -type activities revenues. Revenues by Source - Business Activities ■Invest mend income and miscellaneous ■operating grants and contributions ■ Charges for Services ■Capital Grantsand Contributions Charges for Services 80.3% ital Grants ontributions 16.8%O Investment income and miscellaneous 1.4%O Operating grants and contributions 1.5%O 9 Financial Analysis of the City's Funds As noted earlier, the City of Clermont uses fund accounting to ensure and demonstrate compliance with finance -related requirements. Governmental Funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Clermont's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of September 30, 2015, the City of Clermont's governmental funds reported combined ending fund balances of $17,990,507 a decrease of $913,184 in comparison with the prior year. This decrease is primarily due to the use of accumulated funds for planned capital projects. Of the governmental funds combined ending fund balances, $7,013,550 (38.9%) represents unassigned fund balance, which is available for spending at the City's discretion. An additional $304,600 (assigned fund balance) has been set aside for encumbrances and fiscal year 2016 expenditures. Restricted fund balances totaling over $7.9 million include funds required for debt service, as well as funds collected for specific purposes such as impact fees and community redevelopment. The remainder of fund balance is nonspendable ($2,766,462) to indicate that it is not available for spending because it has already been committed for inventories and prepaid expenses, or it is being held in a non -expendable trust fund. The General Fund is the chief operating fund of the City of Clermont. As of September 30, 2015, the fund balance in the General Fund was $8,864,949 a decrease of $371,461 in comparison with the prior year due to current expenditures exceeding current revenues. The change in fund balance was less than the anticipated amount of the original budget by $830,528 and $1.7 million less than the revised budget. Revenues exceeded budget by $1,183,603 mainly attributable to tax receipts coming in higher than anticipated due to additional collections of delinquent taxes as well as fewer taxpayers taking advantage of the early payment discounts, franchise fees and fines and forfeitures relating to the red light camera program. Departmental expenditures also came in less than anticipated reducing the amount of reserves used. Of the total fund balance in the General Fund, $7,013,550 (79%) is unassigned fund balance. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 32.1% of total General Fund expenditures, while total fund balance represents 40.6% of that same amount. The City has a Capital Projects Fund that is considered a major fund under criteria set forth by GASB Statement No. 34. This fund is used to account for the acquisition of capital assets or construction of major capital projects not being financed by proprietary funds. Funds have been accumulated so projects can be completed on a pay-as-you-go basis. The City has an Infrastructure Fund that is considered a major fund under criteria set forth by GASB Statement No. 34. This fund was established to account for the proceeds of the Local Government Infrastructure Surtax. The proceeds and interest accrued thereto, by law are only to be used to finance, plan and construct infrastructure. The fund balance in this fund increased by $91,082 in fiscal year 2015, which is $1,917,759 more than the revised budget. This increase was due to both higher than anticipated revenues ($160,751) as well as reduced expenditures ($1,513,197). Planned expenditures for the purchase of a new fire truck are being rolled over to fiscal year 2016 due to the delay in delivery of the vehicle until after the end of the fiscal year. i[0 The Community Redevelopment Special Revenue Fund is considered a major fund in order for our external auditors to express an opinion on this fund as required by Florida Statutes chapter 163.387(8). This fund was created in 1997 as a dependent taxing district. The incremental annual increase in tax over the base years is used to fund projects. As of September 30, 2015, the fund balance was $552,606, a decrease of $220,993 over the prior year. This decrease was due to the commencement of the master plan and streetscape projects. The remainder of the change $411,812 to the governmental fund balance was from the non - major governmental funds. Police and Fire Impact Fee fund balances combined increased a total of $303,080 due to both an increase in revenues as well as a delay in the planned use of funds for capital projects. The Recreation Impact Fee fund decreased $653,206 due to capital projects such as Lake Hiawatha Park, Rowing Facility, and the Splash Park. The fund balances in the remaining nonmajor funds decreased a total of $61,686. Proprietary Funds. Proprietary funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The City's major proprietary funds are water, sewer and sanitation. The Water Fund accounts for the provision of potable water and reclaimed irrigation services to City and non -City residents. All activities necessary to the provision of these services are accounted for in this fund, including, but not limited to administration, plant and line maintenance. As of September 30, 2015, the City of Clermont's Water Fund reported total net position of $34,614,652, an increase of $1,545,734 in comparison with the prior year. This increase in net position was due to an increase in operating income along with to lower than anticipated operating expenses. The Sewer Fund accounts for the provision of sewer services to City and non -City residents. All activities necessary to the provision of these services are accounted for in this fund, including, but not limited to administration, plant and line maintenance. As of September 30, 2015, the City of Clermont's Sewer Fund reported total net position of $51,445,431, an increase of $421,016 in comparison with the prior year. This increase is primarily due to capital contributions. The Sanitation Fund accounts for the provision of garbage and trash collection, recycling, and composting services to City residents. All activities necessary to the provision of these services are accounted for in this fund. As of September 30, 2015, the City of Clermont's Sanitation Fund reported total net position of $4,928,871, an decrease of $187,058 in comparison with the prior year, which is due to the implementation of single stream recycling program. General Fund Budgetary Highlights During the year there was an $818,431 increase in appropriations between the original and final amended budget. Following are the main components of the increase: • $252,512 for consultant services including non-utility fee study, fire assessment, Public Works space needs analysis, ADA and paving studies, and master plan study. $125,000 for settlements of liability claims. • $34,143 for 5 additional police officer positions 11 • $28,000 for Laserfiche software. • $26,404 creation of new records coordinator position. General Fund revenue increases totaling $54,989 were due to the receipt of a community development grant which was awarded after the beginning of the fiscal year as well as the recognizing revenue received from Federal and State confiscation programs. Considering the above noted increases in General Fund budgeted appropriations, actual expenditures were less than budgeted by $1,439,474. In addition, actual revenues exceeded the budget by $1,183,603. Capital Assets The following is a summary of the City of Clermont's capital assets, net of depreciation for governmental and business -type activities for the current year with a comparison to the prior year. Additional information on the City of Clermont's capital assets can be found in Note 7 on pages 48 - 49 of this report. Land Buildings Infrastructure Machinery and Equipment Intangibles Construction in Progress Total Capital Assets (net of depreciation) Governmental Activities Business -type Activities Total 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 $ 25,727,548 $ 25,727,548 $ 1,022,590 $ 1,861,820 $ 26,750,138 $ 27,589,368 14,731,149 14,653,642 - - 14,731,149 14,653,642 9,942,940 5,590,777 64,140,411 62,476,771 74,083,351 68,067,548 2,999,130 2,191,359 2,968,262 2,444,267 5,967,392 4,635,626 261,635 26,456 187,004 109,620 448,639 136,076 1,239,197 3,967,409 1,482,397 4,148,655 2,721,594 8,116,064 $54,901,599 $52,157,191 $69,800,664 $71,041,133 $124,702,263 $123,198,324 The City of Clermont's investment in capital assets for its governmental and business -type activities as of September 30, 2015, amounts to $124,702,263 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements/infrastructure, machinery and equipment and intangibles. The total change in the City's investment in capital assets for the current fiscal year was $1,503,939. Major capital asset events during the current fiscal year included the following: • Completion of the Lake Hiawatha Preserve development — $1,376,369 was added and prior years Construction in Progress in the amount of $2,993,946 was moved to Infrastructure for a total project cost of $4,370,315. • Completion of the Rowing Facility — $644,000 was added and prior years Construction in Progress in the amount of $197,384 was moved to Buildings for a total project cost of $841,384. • Purchase of twenty police vehicles for a total of $668,118. • Purchase of a fire boat for $119,875. 12 • Completion of the East West Water Connector - $125,685 was added and prior years Construction in Progress in the amount of $1,289,779, for the total project cost of $1,415,464 was moved Infrastructure/Improvements. • Completion of the Reclaimed Water Storage Tank - prior years Construction in Progress in the amount of $1,512,242 was moved to Infrastructure/Improvements. • Completion of the 12th Street and Lakeshore Stormwater Improvements - $544,529 was added and prior years Construction in Progress in the amount of $33,522, for the total project cost of $578,051 was moved Infrastructure/Improvements. • Purchase of 2 sanitation vehicles for a total of $584,431. • Construction in progress includes construction of the Police Headquarters, Fire Station No. 4, Master Plan, 12" Water Main Loop, Environmental Services Administration Building, Lift Station Improvement, Reclaimed System Improvements, and the CDBG Stormwater Project. Debt Administration The following is a summary of the City's long-term debt for governmental and business -type activity for the current year with a comparison to the prior year. Additional information on long- term debt can be found in Note 8 on pages 50 - 52 of this report. Revenue bonds payable Notes payable Total Outstanding Debt Governmental Activities Business-tvpe Activities Total 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 $ - $ - 7,157,670 8,041,401 $ 13,685,000 $ 14,315,000 - - $ 13,685,000 $ 14,315,000 7,157,670 8,041,401 $ 7,157,670 $ 8,041,401 $ 13,685,000 $ 14,315,000 $ 20,842,670 $ 22,356,401 At the end of the current fiscal year, the City of Clermont had total debt outstanding of $20,842,670, which includes revenue bonds payable and notes payable. Economic Factors and Next Year's Budgets and Rates • The annual unemployment rate for Lake County in 2015 was 5.2%, which is a decrease of 1.1 % from 2014. Clermont's unemployment rate was below the County average for the 6th year in a row at 4.8% for 2015. This is lower than both the state's average of 5.4% and the national average of 4.9%. • The taxable value of commercial and residential property increased 11.72% from fiscal year 2013-14 to fiscal year 2014-15 due to increasing home values and new construction. • Population increased 1.9% from 31,745 in 2014 to 32,348 in 2015. As of September 30, 2015, the General Fund unassigned fund balance was $7,013,550. In addition, the City appropriated $304,600 for spending in the 2015-16 fiscal year budget. The property tax rate included for the General Fund for the 2015-16 fiscal year budget increased by .4771 mills to 4.2061, the City's second increase since 2001. Property tax revenue is projected to be $1,747,781 higher in fiscal year 2015-16 due to the millage increase and the increase in 13 the assessed values. This increase will help the City continue to meet the level of service required as well as implementing new initiatives. No utility rate adjustments were proposed for the 2015-16 fiscal year with the exception of the sewer rate structure. The sewer rates increased 1.57% on October 1, 2015 pursuant to a required adjustment in accordance with the Florida Public Service Commission Annual Deflator Index previously adopted by the Clermont City Council. Requests for Information This financial report is designed to provide a general overview of the City of Clermont's finances for all those with an interest in the government's finances. Questions concerning any of the information should be addressed to the office of the Finance Director, City of Clermont, P.O. Box 120219, Clermont, Florida 34712. 14 BASIC FI9VANCIAL STAgVWE7VTS cLEIRlv(ONT Choice of Champions' CITY OF CLERMONT, FLORIDA STATEMENT OF NET POSITION September 30, 2015 The accompanying Notes to Financial Statements are an integral part of this statement 15 Primary Government Governmental Business -type Activities Activities Total Assets: Cash and cash equivalents $ 13,286,990 $ 24,263,913 $ 37,550,903 Investments 4,239,143 6,694,036 10,933,179 Receivables, net 1,125,928 1,220,836 2,346,764 Inventories 20,474 311,005 331,479 Due from other governments 1,396,873 135,481 1,532,354 Internal balances (1,076,989) 1,076,989 - Prepaid costs 1,662,128 134,280 1,796,408 Restricted assets: Cash and cash equivalents - 1,533,860 1,533,860 Investments - 6,750,871 6,750,871 Interest receivable 7,413 28,892 36,305 Net pension asset 5,642,968 - 5,642,968 Capital assets not being depreciated 26,966,745 2,504,987 29,471,732 Capital assets being depreciated, net of accumulated depreciation 27,934,854 67,295,677 95,230,531 Total assets 81, 206, 527 111,950, 827 193,157, 354 Deferred Outflows of Resources: Deferred outflow of pension earnings 1,682,840 - 1,682,840 Deferred charge on refunding - 513,138 513,138 Total deferred outflows of resources 1,682,840 513,138 2,195,978 Liabilities: Accounts payable and accrued expenses 2,137,965 1,540,734 3,678,699 Due to other governmental agencies 11,893 - 11,893 Unearned revenue 51,575 - 51,575 Noncurrent liabilities: Due within one year 1,024,729 681,554 1,706,283 Due in more than one year 10,679,119 14,577,626 25,256,745 Total liabilities 13,905,281 16,799,914 30,705,195 Deferred Inflows of Resources: Deferred inflow of pension earnings 216,818 - 216,818 Net Position: Net investment in capital assets 47,718,124 56,585,567 104,303,691 Restricted for: Capital Improvements - 12,135,320 12,135,320 Community redevelopment 552,606 - 552,606 Public safety 3,803,007 - 3,803,007 Culture and recreation 234,609 - 234,609 Infrastructure 2,764,060 - 2,764,060 Debt service 872,649 - 872,649 Building services 88,965 - 88,965 Perpetual care: Nonexpendable 1,083,860 - 1,083,860 Unrestricted 11,649,388 26,943,164 38,592,552 Total net position $ 68,767,268 $ 95,664,051 $ 164,431,319 The accompanying Notes to Financial Statements are an integral part of this statement 15 Functions/Programs: Governmental Activities: General government Public safety Physical environment Transportation/public works Economic environment Culture and recreation Interest on long-term debt Total governmental activities Business -type Activities Water Sewer Sanitation Stormwater Total business -type activities Total primary government CITY OF CLERMONT. FLORIDA STATEMENT OF ACTIVITIES Year Ended September 30, 2015 Program Revenue Operating Grants Capital Grants Charges for and and Expenses Services Contributions Contributions Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business -type Activities Activities Total $ 3,847,784 $ 2,356,395 $ - $ - $ (1,491,389) $ - $ (1,491,389) 14,325,704 1,683,979 1,220,299 - (11,421,426) - (11,421,426) 453,027 - - - (453,027) - (453,027) 2,094,223 - 377,513 - (1,716,710) - (1,716,710) 566,746 - - - (566,746) - (566,746) 4,018,441 1,317,331 - 498,253 (2,202,857) - (2,202,857) 193,229 - - - (193,229) - (193,229) 25,499,154 5,357,705 1,597,812 498,253 (18,045,384) - (18,045,384) 4,822,683 5,725,946 275,751 758,495 - 1,937,509 1,937,509 6,570,897 5,809,151 - 2,349,752 - 1,588,006 1,588,006 3,132,989 2,916,519 - - - (216,470) (216,470) 1,079,920 905,287 - 110,961 - (63,672) (63,672) 15,606,489 15,356,903 275,751 3,219,208 - 3,245,373 3,245,373 $ 41,105,643 $ 20,714,608 $ 1,873,563 $ 3,717,461 (18,045,384) 3,245,373 (14,800,011) General Revenues: Property taxes Business taxes Franchise fees Utility taxes Intergovernmental - unrestricted Unrestricted investment earnings Miscellaneous Special Item - Loss on Sale of Capital Assets Transfers Total general revenues and transfers Change in net position 7,192,996 - 7,192,996 129,620 - 129,620 2,502,153 - 2,502,153 2,952,785 - 2,952,785 6,644,875 - 6,644,875 134,608 272,353 406,961 420,275 - 420,275 - (1,248,017) (1,248,017) 556,983 (556,983) - 20,534,295 (1,532,647) 19,001,648 2,488,911 1,712,726 4,201,637 Net Position - beginning, as restated 66,278,357 93,951,325 160,229,682 Net Position - ending $ 68,767,268 $ 95,664,051 $ 164,431,319 The accompanying Notes to Financial Statements are an integral part of this statement. 16 CITY OF CLERMONT, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2015 Liabilities: Nonspendable 1,299,870 - 380,347 - 1,086,245 2,766,462 Community Other Total 331,123 $ 111,386 $ 27,990 $ 1,603,909 Payable to other governments Capital Infrastructure Redevelopment Governmental Governmental 68,030 General Projects Special Revenue Special Revenue Funds Funds Assets: Other long-term assets are not available to pay for current period expenditures and, therefore are deferred in the funds. 380,705 Total liabilities 2,365,471 227,269 331,123 111,386 27,990 3,063,239 Cash and cash equivalents $ 3,569,667 $ 27,269 $ 2,526,739 $ 663,992 $ 5,834,432 $ 12,622,099 Investments 4,239,143 - - - - 4,239,143 Receivables, net 1,132,404 - - - 65 1,132,469 Inventories, at cost 20,474 - - - - 20,474 Due from other governments 1,008,776 200,000 188,097 - - 1,396,873 Due from otherfunds 68,030 - - - - 68,030 Prepaid costs 1,279,396 380,347 2,385 1,662,128 Total assets $ 11,317,890 $ 227,269 $ 3,095,183 $ 663,992 $ 5,836,882 $ 21,141,216 Liabilities: Nonspendable 1,299,870 - 380,347 - 1,086,245 2,766,462 Accounts payable $ 974,171 $ 159,239 $ 331,123 $ 111,386 $ 27,990 $ 1,603,909 Payable to other governments 11,893 - - - - 11,893 Due to otherfunds 947,127 68,030 - - - 1,015,157 Unearned revenue 51,575 - - - - 51,575 Accrued liabilities 380,705 Other long-term assets are not available to pay for current period expenditures and, therefore are deferred in the funds. 380,705 Total liabilities 2,365,471 227,269 331,123 111,386 27,990 3,063,239 Deferred Inflows of Resources: Unavailable revenue - liens, forfeitures and rents 87,470 87,470 Total deferred inflows of resou rces 87,470 87,470 Fund Balances: Nonspendable 1,299,870 - 380,347 - 1,086,245 2,766,462 Restricted 246,929 - 2,383,713 552,606 4,722,647 7,905,895 Assigned 304,600 - - - - 304,600 Unassigned 7,013,550 7,013,550 Total fund balances 8,864,949 2,764,060 552,606 5,808,892 17,990,507 Total liabilities, deferred inflows of resources, and fund balances $ 11,317,890 $ 227,269 $ 3,095,183 $ 663,992 $ 5,836,882 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and are not reported in the funds. 54,901,599 Accrued interest payable is not due in the current period and therefore is not reported in the funds. (63,208) Other long-term assets are not available to pay for current period expenditures and, therefore are deferred in the funds. 87,470 Deferred inflows and outflows of resources related to pension earnings are not recognized in governmental funds, however, they are recorded in net position under full accrual accounting. 1,466,022 Net pension assets are not current financial resources and therefore are not reported in the funds 5,642,968 The assets and liabilities of certain internal service funds are not included in the fund financial statement, but are included in the governmental activities of the Statement of Net Position. 445,758 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. (11,703,848) Net Position of Governmental Activities in the Statement of Net Position $ 68,767,268 The accompanying Notes to Financial Staten ents are an integral part of this statement. CITY OF CLERMONT, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Revenues: Taxes Franchise fees Licenses and permits Intergovernmental revenues Charges for services Fines and forfeitures Impact fees/special assessments Investment earnings Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Culture and recreation Debt Service: Principal retirement Interest and fiscal charges Capital Outlay: Public safety Culture and recreation Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total oth er fin ancing sources (uses) Net Change in Fund Balances Fund Balances -beginning Fund Balances -ending Year Ended September 30, 201 Community Other Total Infrastructure Redevelopment Governmental Governmental General Capital Projects Special Revenue Special Revenue Funds Funds $ 10,075,999 $ - $ - $ 199,402 $ - $ 10,275,401 2,502,153 - - - - 2,502,153 144,513 - - - 643,795 788,308 5,517,892 498,253 2,755,364 - - 8,771,509 1,206,162 - - - 106,057 1,312,219 757,007 - - - - 757,007 - - - - 1,857,581 1,857,581 72,977 - 17,387 5,082 35,582 131,028 964,809 82,226 1,047,035 21,241,512 498,253 2,772,751 204,484 2,725,241 27,442,241 3,543,040 - 56,484 - - 3,599,524 13,075,595 - 727,419 - 1,040,946 14,843,960 612,501 - 131,653 - - 744,154 1,172,386 - 462,638 - - 1,635,024 138,247 - - 425,477 - 563,724 3,315,105 21,895 343,296 - 45,000 3,725,296 - - - - 883,731 883,731 - - - - 198,438 198,438 - 236,976 - - - 236,976 2,458,455 2,458,455 21,856,874 2,717,326 1,721,490 425,477 2,168,115 28,889,282 (615,362) (2,219,073) 1,051,261 (220,993) 557,126 (1,447,041) 540,695 (296,794) 2,219,073 - (960,179) - 1,097,579 (2,066,517) 3,857,347 (3,323,490) 243,901 2,219,073 (960,179) (968,938) 533,857 (371,461) 9,236,410 - 91,082 2,672,978 (220,993) (411,812) 773,599 6,220,704 (913,184) 18,903,691 $ 8,864,949 $ $ 2,764,060 $ 552,606 $ 5,808,892 $ 17,990,507 The accompanying Notes to Financial Stat gments are an integral part of this statement. CITY OF CLERMONT. FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended September 30, 2015 Net Change in Fund Balances - total governmental funds: $ (913,184) Amounts reported for Governmental Activities in the Statement of Activities are different because: Governmental funds report outlays for capital assets as expenditures because such outlays use current financial resources. In contrast, the Statement of Activities reports only a portion of the outlay as expense. The outlay is allocated over the assets' estimated useful lives as depreciation expense for the period. 2,721,282 Net transfers of capital assets from proprietary funds 23,126 Governmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the Statement of Activities when earned. 14,261 Revenue reported in the funds must be eliminated from the statement of activities since revenue was recognized in a prior year. (29,000) Cash pension contributions reported in the funds were more than the calculated pension expense on the statement of activities, and therefore increased net position 583,965 Governmental funds report note proceeds as current financial resources. In contrast, the Statement of Activities treats such issuance of debt as a liability. Governmental funds report repayment of note principal as an expenditure, In contrast, the Statement of Activities treats such repayments as a reduction in long-term liabilities. This is the amount by which repayments exceeded proceeds. 883,731 Some expenses reported in the statement of activities do not require the use of current financial resources and these are not reported as expenditures in governmental funds. (820,973) Internal service funds are used by management to charge the costs of certain activities, such as health insurance, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. 25,703 Change in Net Position of Governmental Activities $ 2,488,911 The accompanying Notes to Financial Statements are an integral part of this statement. 19 CITY OF CLERMONT, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2015 The accompanying Notes to Financial Statements are an integral part of this statement. 20 Actual Variance with Amounts, FinalBudget- Budgetary Positive Budgeted Amounts Basis (Negative) Original Final Revenues: Taxes $ 9,721,469 $ 9,721,469 $ 10,075,999 $ 354,530 Franchise fees 2,296,900 2,296,900 2,502,153 205,253 Licenses and permits 125,660 125,660 144,513 18,853 Intergovernmental revenues 5,245,945 5,270,945 5,517,892 246,947 Charges for services 1,131,995 1,131,995 1,206,162 74,167 Fines and forfeitures 442,800 472,789 757,007 284,218 Investment earnings 40,000 40,000 72,977 32,977 Miscellaneous 998,151 998,151 964,809 (33,342) Total revenues 20,002,920 20,057,909 21,241,512 1,183,603 Expenditures: Current: General government: City council 25,959 30,549 30,482 67 City clerk 278,031 281,477 262,821 18,656 City manager 437,445 437,445 428,010 9,435 Finance 850,426 822,196 822,121 75 Legal services 100,500 100,500 96,101 4,399 Planning&zoning 543,010 592,601 591,867 734 Information technology 586,085 618,159 562,317 55,842 Human resources 329,385 349,582 330,826 18,756 Purchasing - 70,837 69,122 1,715 Other general government 193,462 348,360 349,373 (1,013) 3,344,303 3,651,706 3,543,040 108,666 Public safety: Law enforcement 6,963,720 7,279,668 7,223,453 56,215 Fire control 7,146,268 7,080,839 5,852,142 1,228,697 14,109,988 14,360, 507 13, 075, 595 1,284,912 Physical environment 554,326 594,326 612,501 (18,175) Transportation 1,150,707 1,236,757 1,172,386 64,371 Economic environment 187,269 187,269 138,247 49,022 Culture and recreation Culture and recreation 2,151,039 2,188,209 2,010,303 177,906 Events 174,712 208,312 227,571 (19,259) Arts and reccenter 805,573 869,262 1,077,231 (207,969) 3,131,324 3,265,783 3,315,105 (49,322) Total expenditures 22,477,917 23,296,348 21,856,874 1,439,474 The accompanying Notes to Financial Statements are an integral part of this statement. 20 CITY OF CLERMONT, FLORIDA BUDGET AND ACTUAL (CONTINUED) Year Ended September 30, 2015 Net Change in Fund Balance Fund Balance -beginning Fund Balance -ending (1,201,989) (2,129,101) (371,461) 1,757,640 9,236,410 9,236,410 9,236,410 - $ 8,034,421 $ 7,107,309 $ 8,864,949 $ 1,757,640 The accompanying Notes to Financial Statements are an integral part of this statement. 21 Actual Variance with Amounts, FinalBudget- Budgetary Positive Budgeted Amounts Basis (Negative) Original Final Excess (Deficiency) of Revenues Over Expenditures (2,474,997) (3,238,439) (615,362) 2,623,077 Other Financing Sources (Uses): Loan Proceeds 1,250,000 1,092,127 - (1,092,127) Transfers In 459,700 459,700 540,695 80,995 Transfers Out (436,692) (442,489) (296,794) 145,695 Total other financing sources(uses) 1,273,008 1,109,338 243,901 (865,437) Net Change in Fund Balance Fund Balance -beginning Fund Balance -ending (1,201,989) (2,129,101) (371,461) 1,757,640 9,236,410 9,236,410 9,236,410 - $ 8,034,421 $ 7,107,309 $ 8,864,949 $ 1,757,640 The accompanying Notes to Financial Statements are an integral part of this statement. 21 CITY OF CLERMONT, FLORIDA INFRASTRUCTURE SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2015 Expenditures: Current: General government 70,000 70,000 56,484 13,516 Public safety Police 450,920 738,635 674,023 Variance with Fire control 50,000 430,347 53,396 Final Budget - 343,296 500,920 1,168,982 727,419 Positive Transportation: Budgeted Amounts Actual Amounts (Negative) Original Final 929,919 462,638 Revenues: Intergovernmental revenues $ 2,600,000 $ 2,600,000 $ 2,755,364 $ 155,364 Investment earnings 12,000 12,000 17,387 5,387 Miscellaneous - - - - Totalrevenues 2,612,000 2,612,000 2,772,751 160,751 Expenditures: Current: General government 70,000 70,000 56,484 13,516 Public safety Police 450,920 738,635 674,023 64,612 Fire control 50,000 430,347 53,396 376,951 343,296 500,920 1,168,982 727,419 441,563 Transportation: Roads & streets 759,500 929,919 462,638 467,281 Physical Environment 191,500 191,500 131,653 59,847 Culture and recreation Recreation programs 269,500 327,786 313,310 14,476 Arts and rec center 566,500 546,500 29,986 516,514 836,000 874,286 343,296 530,990 Total expenditures 2,357,920 3,234,687 1,721,490 1,513,197 Excess (Deficiency) of Revenues Over Expenditures 254,080 (622,687) 1,051,261 1,673,948 Other Financing Uses: Transfers out (945,798) (1,203,990) (960,179) 243,811 Total other financing uses (945,798) (1,203,990) (960,179) 243,811 Net Change in Fund Balances (691,718) (1,826,677) 91,082 1,917,759 Fund Balances - beginning 2,672,978 2,672,978 2,672,978 - FundBalances- ending $ 1,981,260 $ 846,301 $ 2,764,060 $ 1,917,759 The accompanying Notes to Financial Statements are an integral part of this statement. 22 CITY OF CLERMONT, FLORIDA COMMUNITY REDEVELOPMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Revenues: Taxes Investment earnings Total revenues Expenditures: Economic environment: Economic development Total expenditures Excess (Deficiency) of Revenues Over Expenditures Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2015 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 204,392 $ 204,392 $ 199,402 $ (4,990) 5,100 5,100 5,082 (18) 209,492 209,492 204,484 (5,008) 489,222 592,972 425,477 167,495 489,222 592,972 425,477 167,495 (279,730) (383,480) (220,993) 162,487 (279,730) (383,480) (220,993) 162,487 773,599 773,599 773,599 - $ 493,869 $ 390,119 $ 552,606 $ 162,487 The accompanying Notes to Financial Statements are an integral part of this statement. 23 Assets: Current assets: Cash and cash equivalents I nvestments Restricted cash and cash equivalents Accounts receivable, net Due from other governments Inventories Prepaid expenses Total current assets Noncurrent assets: Restricted investments Advances to other funds Interest receivable Capital assets: Land, buildings and equipment Construction in progress Less accumulated depreciation Total capital assets (net of accumulated depreciation) Total non-current assets Total assets CITY OF CLERMONT, FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS September 30, 2015 Business -type Activities -Enterprise Funds Water Sewer Sanitation Stormwater Total Governmental Activities - Internal Service Fund $ 8,680,042 $ 11,192, 894 $ 3,234,287 $ 1,156, 690 $ 24, 263, 913 $ 664,891 6,694,036 - - - 6,694,036 - 830,036 703,824 - - 1,533,860 - 396,609 489,213 255,496 79,518 1,220,836 872 129,806 - - 5,675 135,481 - 273,781 36,464 - 760 311,005 - 61,485 50,763 11,986 10,046 134,280 - 17, 065, 795 12, 473,158 3,501,769 1,252,689 34, 293, 411 665,763 - 6,750,871 - - 6,750,871 - - - 947,127 - 947,127 - 14,316 14,576 - - 28,892 - 33,948,192 61,657,809 3,953,716 5,693,896 105,253,613 - 252,894 1,109,177 - 120,326 1,482,397 - (10,546,166) (21,334,092) (2,679,138) (2,375,950) (36,935,346) - 23,654,920 41,432,894 1,274,578 3,438,272 69,800,664 - 23, 669, 236 48,198, 341 2,221,705 3,438,272 77, 527, 554 - 40, 735, 031 60, 671, 499 5,723,474 4,690,961 111, 820, 965 665,763 Deferred Outflows of Resources: Deferred charge on refunding 180,240 332,898 - - 513,138 Total deferred outflows of resources 180,240 332,898 - - 513,138 The accompanying Notes to Financial Statements are an integral part of this statement 24 Liabilities: Current liabilities: Accounts payable Salaries payable Accrued interest payable Compensated absences Customer deposits payable Revenue bonds payable -current Total current liabilities Noncurrent liabilities: Compensated absences Other post employment benefits Revenue bonds payable Total non-current liabilities Total liabilities Net Position: Net investment in capital assets Restricted for capital improvements Unrestricted Total net position 195,876 151,223 446,954 20,684 814,737 90,143 41,698 38,686 24,071 9,516 113,971 - 64,041 113,850 - - 177,891 - 14,494 10,368 4,677 2,015 31,554 - 434,135 - - - 434,135 - 234,000 416,000 - - 650,000 - 984,244 730,127 475,702 32,215 2,222,288 90,143 130,446 93,315 42,094 18,137 283,992 - 477,765 365,453 276,807 95,374 1,215,399 4,708,164 8,370,071 - - 13, 078, 235 - 5,316,375 8,828,839 318,901 113,511 14,577,626 - 6,300,619 9,558,966 794,603 145,726 16,799,914 90,143 18,892,996 32,979,721 1,274,578 3,438,272 56,585,567 - 1,907,224 10, 228, 096 - - 12,135, 320 - 13,814,432 8,237,614 3,654,293 1,106,963 26,813,302 575,620 $ 34,614,652 $ 51,445,431 $ 4,928,871 $ 4,545,235 95,534,189 $ 575,620 The assets and liabilities of certain internal service funds are not included in the fund financial statement, but are included in the Business Activities of the Statement of Net Position. Total Net Position per Government -Wide Financial Statements 129,862 a a0,004,uoi The accompanying Notes to Financial Statements are an integral part of this statement 25 cLEIRlv(ONT Choice of Champions' 26 CITY OF CLERMONT, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS Operating Revenues: Charges for services Miscellaneous Total operating revenues Operating Expenses: Personnel services Utilities Dump fees Administrative services Repairs and maintenance Depreciation and amortization Professional services Insurance claims and expenses Other supplies and expenses Total operating expenses Operating income (loss) Nonoperating Revenues (Expenses): Investment income Grant Revenue Interest expense Gain (loss) on disposal of capital assets Total nonoperating revenue (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Special item - loss on sale of fixed assets Change in net position Year Ended September 30, 2015 Governmental Business -type Activities -Enterprise Funds Activities - Internal Service Water Sewer Sanitation Stormwater Total Fund $ 5,509,877 $ 5,795,770 $ 2,912,318 $ 903,444 $ 15,121,409 $ 3,668,054 216,069 13,381 4,201 1,843 235,494 235,917 5,725,946 5,809,151 2,916,519 905,287 15,356,903 3,903,971 1,683,305 1,481,898 944,114 420,915 4,530,232 - 425,098 767,964 1,160 833 1,195,055 - - 153,750 456,207 23,506 633,463 - 326,729 343,617 281,636 56,520 1,008,502 - 221,302 268,959 166,647 58,781 715,689 - 1,033,421 2,376,229 401,265 349,122 4,160,037 - 430,519 305,421 40,877 96,518 873,335 2,400 122,347 141,018 59,404 17,028 339,797 3,872,477 377,843 369,461 783,241 57,267 1,587,812 - 4,620,564 6,208,317 3,134,551 1,080,490 15,043,922 3,874,877 1,105,382 (399,166) (218,032) (175,203) 312,981 29,094 115,027 117,777 29,989 9,560 272,353 275,751 - - - 275,751 (204,735) (364,803) - - (569,538) 22,315 - 985 - 23,300 208,358 (247,026) 30,974 9,560 1,866 1,313,740 (646,192) (187,058) (165,643) 314,847 758,495 2,349,752 - 110,961 3,219,208 18,583 - - - 18,583 (545,084) (11,227) - (19,255) (575,566) - (1,271,317) - - (1,271,317) 1,545,734 421,016 (187,058) (73,937) 1,705,755 Total Net Position - Beginning 33,068,918 51,024,415 5,115,929 4,619,172 Total Net Position - Ending $ 34,614,652 $ 51,445,431 $ 4,928,871 $ 4,545,235 Change in Net Position, per above 1,705,755 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of certain internal service funds is reported with Business Activities. 6,971 Change in Business -Type Activities in Net Position per Government -Wide Financial Statements $ 1,712,726 The accompanying Notes to Financial Statements are an integral part of this statement. 27 3,580 3,580 32,674 32,674 542,946 $ 575,620 Cash Flows from Operating Activities: Receipts from customers Receipts from internal services provided Payments to suppliers Payments to employees Net cash provided (used) by operating activities Cash Flows from Non -Capital Financing Activities: Due from other funds Operating grants Transfers in Transfers out Net cash provided (used) by non -capital financing activities Cash Flows from Capital and Related Financing Activities: Acquisition of capital assets Sale of capital assets Interest paid on long-term debt Principal paid on debt Capital Grants Fees and assessments received Net cash provided (used) by capital and related financing activities CITY OF CLERMONT. FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended September 30, 2015 Governmental Activities - Business -Type Activities -Enterprise Funds Internal Service Water Sewer Sanitation Stormwater Total Fund $ 5,892,507 $ 5,855,803 $ 2,922,426 $ 902,349 $ 15,573,085 $ - - - - - - 3,903,099 (1,986,503) (2,403,493) (1,466,478) (312,176) (6,168,650) (4,070,832) (1,606,807) (1,414,766) (898,227) (398,713) (4,318,513) - 2,299,197 2,037,544 557,721 191,460 5,085,922 (167,733) - - (947,127) - (947,127) 145,945 145,945 (533,857) - - - (533,857) - (387,912) - (947,127) - (1,335,039) - (1,255,271) (1,185,973) (677,495) (951,686) (4,070,425) - 22,315 (143,586) 985 - (120,286) - (196,203) (348,820) - - (545,023) - (226,800) (403,200) (630,000) - - - - 105,286 105,286 - 758,495 2,349,752 - - 3,108,247 - (897,464) 268,173 (676,510) (846,400) (2,152,201) The accompanying Notes to Financial Statements are an integral part of these statements. 28 Cash Flows from Investing Activities: Sale (Purchase) of investments Investment income Net cash provided by investing activities Net Increase(Decrease)in Cash and Cash Equivalents Cash and Cash Equivalents - beginning Cash and Cash Equivalents - end Classified As: Cash and cash equivalents Restricted cash and cash equivalents Total Reconciliation of Operating Income (Loss)to Net Cash Provided By Operating Activities Operating income (loss) Adjustments Not Affecting Cash: Depreciation and amortization Change in Assets and Liabilities: Decrease (Increase) in accts receivable Increase in customer deposits Decrease in prepaid costs Decrease (Increase) in inventory Increase (Decrease) in accounts payable Increase in accrued liabilities Total adjustments Net Cash Provided (Used) by Operating Activities 524,877 341,374 - - 866,251 - 80,961 99,704 29,989 9,560 220,214 3,580 605,838 441,078 29,989 9,560 1,086,465 3,580 1,619,659 2,746,795 (1,035,927) (645,380) 2,685,147 (164,153) 7,890,419 9,149,923 4,270,214 1,802,070 23,112,626 829,044 $ 9,510,078 $ 11,896,718 $ 3,234,287 $ 1,156,690 $ 25,797,773 $ 664,891 $ 8,680,042 $ 11,192,894 $ 3,234,287 $ 1,156,690 $ 24,263,913 $ 664,891 830,036 703,824 - - 1,533,860 - $ 9,510,078 $ 11,896,718 $ 3,234,287 $ 1,156,690 $ 25,797,773 $ 664,891 $ 1,105,382 $ (399,166) $ (218,032) $ (175,203) $ 312,981 $ 29,094 1,033,421 2,376,229 401,265 349,122 4,160,037 169,021 46,652 5,907 (2,938) 218,642 (872) (2,460) - - - (2,460) - (37,349) (44,655) (11,986) (10,046) (104,036) 600 (65,396) (5,402) - 561 (70,237) - 20,080 (3,246) 334,680 7,762 359,276 (196,555) 76,498 67,132 45,887 22,202 211,719 - 1,193,815 2,436,710 775,753 366,663 4,772,941 (196,827) $ 2,299,197 $ 2,037,544 $ 557,721 $ 191,460 $ 5,085,922 $ (167,733) Noncash Investing, Capital, and Financing Activities: Increase (Decrease) in Fair Value of Investments $ 28,211 $ 13,855 $ - $ - $ 42,066 $ Net transfers of capital assets $ 7,356 $ (11,227) $ - $ (19,255) $ (23,126) $ - The accompanying Notes to Financial Statements are an integral part of these statements. 29 CITY OF CLERMONT. FLORIDA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS September 30, 2015 Total assets 31,363,742 Liabilities: Refunds payable and other 597,800 Total liabilities 597,800 Net Position Held in Trust for Pension Benefits $ 30,765,942 The accompanying Notes to Financial Statements are an integral part of this statement. 30 Total Employee Pension Funds Assets: Cash and cash equivalents $ 194,740 Receivables: Due from state 421,778 Total receivables 421,778 1 nvestments: U.S. Government & other debt securities 9,688,348 Equities 21, 058, 876 Total investments 30,747,224 Total assets 31,363,742 Liabilities: Refunds payable and other 597,800 Total liabilities 597,800 Net Position Held in Trust for Pension Benefits $ 30,765,942 The accompanying Notes to Financial Statements are an integral part of this statement. 30 CITY OF CLERMONT. FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS Year Ended September 30, 2015 Investment earnings: Net decrease in fair value of investments (43,104) Total net investment earnings (43,104) Total additions 1,824,914 Deductions: Total Employee Benefits/distributions Pension Funds Additions: 131,839 Contributions: 693,699 Employer $ 1,205,420 Plan members 240,820 State 421,778 Total contributions 1,868,018 Investment earnings: Net decrease in fair value of investments (43,104) Total net investment earnings (43,104) Total additions 1,824,914 Deductions: Benefits/distributions 561,860 Administrative 131,839 Total deductions 693,699 Change in Net Position 1,131,215 Net Position - beginning 29,634,727 Net Position - ending $ 30,765,942 The accompanying Notes to Financial Statements are an integral part of this statement 31 cLEIRlv(ONT Choice of Champions' 32 NoM To FINANCIAL STAglWE Z cLEIRlv(ONT Choice of Champions' CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies: A. Reporting Entity The City of Clermont, Florida (the City) is a political subdivision of the State of Florida located in Lake County. The City of Clermont was incorporated under State law in December 1916 and operates under the council-manager form of government under its charter adopted pursuant to H.B. 2223, Ch.67-1217 Special Acts, of the State of Florida. The legislative branch of the City is composed of a Mayor and four (4) members elected Council. The City Council is responsible for the establishment and adoption of policy. The execution of such policy is the responsibility of the Council appointed City Manager. In evaluating how to define the government, for financial reporting purposes, the City has considered all potential component units. The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body, and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects or activities of, or the level of services performed or provided by, the organization. A financial benefit or burden relationship exists if the primary government (a) is entitled to the organizations' resources; (b) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the organization. In applying the above criteria, the City has one blended component unit as follows: The City of Clermont Community Redevelopment Fund: The City of Clermont created the Downtown Redevelopment Agency in May of 1997. This is a dependent taxing district established in accordance with Chapter 163, Part III, Florida Statutes. Notification to affected taxing agency was done in compliance with Chapter 163.346, Part III, Florida Statutes. The incremental annual increase in tax over the base years will be used to fund projects designed to enhance and improve the described area. The City Council, being the duly elected governmental body for the designated area, passed Resolution 97-950, which established the City of Clermont as the Redevelopment Agency for the purpose of carrying out the community redevelopment programs and plans within the area. Through Ordinance 359-M the City established the Community Redevelopment Trust Fund to account for all transactions generated by this special revenue fund. The City of Clermont Community Redevelopment Fund is presented as a blended component unit. The CRA is governed by a board of seven - the five members of the Clermont City Council and two individuals appointed by the City Council. BBi CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): B. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. 34 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued): Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. The government reports the following funds: Major Governmental Funds The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Capital Projects Fund accounts for financial resources segregated for the acquisition or construction of major capital facilities. Infrastructure Special Revenue Fund accounts for the proceeds of the Local Government Infrastructure Surtax. The proceeds and interest accrued thereto, by law are only to be used to finance, plan and construct infrastructure. The Community Redevelopment Fund was established as a dependent taxing district. The incremental annual increase in tax over the base years will be used to fund projects designed to enhance and improve the described area. Nonmaior Governmental Fund Types Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes other than debt service or capital projects. Debt Service Fund is used to account for the accumulation of resources for the payment of principal and interest on certain long-term debt. Cemetery Perpetual Care accounts for activities of the City relative to cemetery maintenance at specified locations. Fund resources are restricted. Only earnings on invested resources may be used to support these activities. K1y CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued): Major Proprietary Funds Water Fund is used to account for the operations of the City's water system, which is financed in a manner similar to private business enterprises, where the costs, including depreciation, of providing services to the general public on an ongoing basis are financed primarily through user charges. Sewer Fund is used to account for the operations of the City's sewer system, which is financed in a manner similar to private business enterprises, where the costs, including depreciation, of providing services to the general public on an ongoing basis are financed primarily through user charges. Sanitation Fund is used to account for the fiscal activities of the City's refuse collection and disposal operation. Nonmaior Proprietary Funds Stormwater Fund (Enterprise Fund) is used to account for the fiscal activities of the City's stormwater drainage operation, as well as the funding and payment of related debt. Internal Service Fund is used to account for the costs of group insurance which are charged to other departments on a cost reimbursement basis. Fiduciary Funds Pension Trust Funds account for activities of police officers, firefighters and general employees retirement plans which accumulate resources for pension benefit payments to qualified employees. As a general rule the effect of interfund activity has been eliminated from the government - wide financial statements. Exceptions to this general rule are other charges between the City's water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. BIc3 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued): Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's water, sewer, sanitation and stormwater utility funds are charges to customers for sales and services. The City also recognizes as operating revenue the meter fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance: 1. Deposits and Investments The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Investments of the City are reported at fair value. The City's investments consist of investments authorized per their investment policy adopted in accordance with Section 218.415, Florida Statutes. The City has implemented Government Accounting Standards Board (GASB) Statement No. 40, Deposit and Investment Risk Disclosures. 2. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." KrA CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 2. Receivables and Payables -(Continued) Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances". Advances between funds, as reported in the fund financial statements, are offset by a non -spendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All receivables are shown net of an allowance for uncollectibles. The County bills and collects property taxes and remits them to the City. City property tax revenues are recognized when levied to the extent that they result in current receivables. All property is reassessed according to its fair value on the lien date, or January 1 of each year. Taxes are levied on October 1 of each year. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January, and 1% in the month of February. The taxes paid in March are without discount. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. On or around May 31 following the tax year, certificates are sold for all delinquent taxes on real property. 3. Inventories and Prepaid Items All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. These are recorded as expenditures when consumed rather than when purchased. 4. Restricted Assets Certain proceeds of the City's enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because they are maintained in separate accounts and their use is limited by applicable bond covenants. Assets so designated are identified as restricted assets on the balance sheet. Kia CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 5. Capital Assets Capital assets, which include property, plant, equipment, intangible and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $1,000 or more and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. Capital assets of the City are depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings 10-50 Improvements 15-50 Infrastructure 30-50 Equipment & Machinery 3-15 Intangible Assets 3-15 6. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay is accrued when incurred in the government -wide and proprietary financial statements. A portion of sick pay is accrued for employees with at least ten (10) years of service. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. For governmental activities, compensated absences, net pension obligations, and net other postemployment benefit obligations are generally liquidated by the general fund. 1914 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 7. Long -Term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. 8. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items that qualify for reporting in this category. The deferred charge on refunding and deferred outflows of pension earnings reported in the government -wide statement of net position and the statement of net position - proprietary funds. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from several sources: liens, forfeitures and rental income. These amounts are deferred and recognized as an inflow of sources in the period that the amounts become available. The City also has deferred inflows of pension earnings reported in the government -wide statement of net position. em CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 9. Net Position Flow Assumptions Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's policy to consider restricted net position to have been depleted before unrestricted net position is applied. 10. Fund Balance Flow Assumptions Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 11. Fund Balance Policies Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The City itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the City's highest level of decision-making authority. The Council is the highest level of decision- making authority for the City that can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the resolution remains in place until a similar action is taken (the adoption of another resolution) to remove or revise the limitation. Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet criteria to be classified as committed. The Council has maintained authority to assign fund balance. 41 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 11. Fund Balance Policies - (Continued) The Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. E. New GASB Statements Implemented: In fiscal year 2015, the City implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. These statements replace the requirements of GASB Statement No. 27, Accounting for Pensions by State and Local Government Employers, and Statement No. 50, Pension Disclosures, as they relate to pension plans that are administered through trusts or equivalent arrangements that meet certain criteria. GASB Statement No. 71 addresses the issue of the transition provisions of GASB Statement No. 68. Beginning net position of governmental activities has been restated and disclosed in Note 3. Note 2 - Reconciliation of Government -Wide and Fund Financial Statements: A. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government -Wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances - total govemmental funds and changes in net position of governmental activities as reported in the government -wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $2,721,282 difference are as follows: Capital Outlay $ 4,917,533 Depreciation Expense (2,196,251) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 2,721,282 era CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 2 - Reconciliation of Government -Wide and Fund Financial Statements (Continued): A. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government -Wide Statement of Activities (Continued) Another element of that reconciliation states that 'The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position." The details of this $883,731 difference are as follows: Debt Issued or Incurred Principal Repayment Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 833,731 $ 833,731 Another element of that reconciliation states that "Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds." The details of this difference are as follows: Compensated Absences $ (311,721) Other Post Employment Benefits (514,461) Accrued Interest Payable 5,209 NetAdjustment to Decrease Net Changes in Fund Balances - total governmental funds to arrive at changes in net position of governmental activities $ (820,973) Note 3 -Accounting Changes: The beginning balances of governmental activities have been adjusted due to the implementation of GASB 68. Governmental Activities Net Position, October 1, 2014, Previously Stated $ 59,753,332 Increase for Accounting Change - GASB 68 6,525,025 Net Position, October 1, 2014, Restated $ 66,278,357 E1161 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 4 - Stewardship, Compliance, and Accountability: A. Budgetary Infonnation - The City follows these procedures in establishing the budgetary data reflected in the financial statements: (1) Prior to the end of the fiscal year, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. (2) Budget workshops are scheduled as needed. (3) The general summary of the budget and notice of public hearing is published in the local newspaper. (4) Public hearings are conducted to obtain taxpayer comments. (5) Prior to October 1, the budgets are legally enacted through passage of a resolution. (6) The City Manager is authorized to transfer budgeted amounts within departments; however, any revisions that alter the total appropriations of any department must be approved by the City Council. (7) The level of classification detail at which expenditures may not legally exceed appropriations is the department level. (8) Appropriations lapse at the close of the fiscal year to the extent they have not been expended. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders and contracts) outstanding at year end are reported as assigned fund balances and do not constitute expenditures or liabilities because the commitments will be re -appropriated and honored during the subsequent year. (9) Budgets are adopted for the general fund, special revenue funds, debt service funds and the capital projects fund on a basis consistent with generally accepted accounting principles, except as described below under Budget Basis of Accounting. Budgets are also adopted for the enterprise funds: however, budgetary comparisons are not presented since they are not required under generally accepted accounting principles. (10) The City Council, by Ordinance or Resolution, may make supplemental appropriations in excess of those originally estimated for the year up to the amount of available revenues. Budgeted amounts presented in the accompanying financial statements have been adjusted for legally authorized revisions. 44 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 4 - Stewardship, Compliance, and Accountability (Continued): B. Budgetary Basis of Accounting - The City includes a portion of the prior year's fund balances represented by unappropriated liquid assets remaining in the fund as budgeted revenue in the succeeding year. The results of operations on a GAAP basis do not recognize the fund balance allocation as revenue as it represents prior periods' excess of revenues over expenditures. The City does not budget for capital outlay expenditures and other financing sources related to the acquisition of assets through notes payable. C. Expenditures in Excess of Appropriations - Expenditures exceeded appropriations in various departments of the General Fund, Capital Projects Fund, and Recreation Impact Fee Fund. Theses excess expenditures were funded by greater than anticipated revenues and available fund balance. Note 5 - Cash and Investments: Deposits At year-end, the carrying amount of the City's deposits was $39,084,763 and the bank balance was $39,737,424. Fiduciary fund cash held by the pension fund is not in the City's bank. All bank deposits were fully covered by federal depository insurance or by collateral held in banks that are members of the State of Florida's Collateral Pool as specified under Florida law. Florida Statutes provide for collateral pooling by banks and savings and loans. This limits local government deposits to "authorized depositories". Investments Investments in all fund types are stated at fair value, which is the amount for which an investment could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. Fair value is based on quoted market prices. Changes in the fair value of investments are recognized as revenue and included in investment income. The City's investment policies are governed by state statute and city ordinance. Authorized investments are: (a) The Local Government Surplus Funds Trust (SBA). (b) SEC registered money market funds. (c) Interest-bearing time deposits or savings accounts in qualified public depositories. (d) Direct obligations of the U.S. Treasury. (e) Federal agencies and instrumentalities. CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 5 - Cash and Investments (Continued): Investments (Continued) (f) Securities of, or other interests in, any open-end or closed-end management -type investment company or investment trust registered under the Investment Company Act of 1940. (g) Repurchase Agreements. (h) Other investments authorized by ordinance. The assets of the City's police and firefighters pension funds, as well as the general employees defined benefit pension fund, are invested in the pooled investment fund for the Florida Municipal Pension Trust Fund (FMPTF). Investments held in this fund consist of corporate bonds and stocks and cash equivalents. The fund is stated at fair value, and investment earnings are allocated to participants in the fund based on their equity in this pooled investment account as provided by the Florida Municipal Pension Fund. Investments made by the City of Clermont at September 30, 2015 are summarized below. Defined benefit pension plan investments, other than $21,058,876 in mutual funds, investing in equity securities, are included below. In accordance with GASB 31, investments are reported at fair value. Investment Type Federal Agency Bond US Treasury Notes Corporate Note Commercial Paper Municipal Bond Pension Fixed Income Securities Credit Risk: Fair Value Credit Rating $ 3,716,401 AA+ 10,169,278 TSY 2,498,004 AAA/AA 474,526 A-1 825,841 AA 9,688,348 AA/V4 $ 27,372,398 Weighted Average Maturity 1.55 years 1.67 years 2.12 years 103 days 308 days 5.98 years The City's investment policy limits credit risk by restricting authorized investments to those described above. Custodial Credit Risk: In the case of deposits, this is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City's investment policy requires that bank deposits be secured as provided by Chapter 280, Florida Statutes. This law requires local governments to deposit funds only in financial institutions designated as qualified public depositories by the Chief Financial Officer of the State of Florida, and creates the Public Deposits Trust Fund, a multiple financial institution pool with the ability to assess its member financial institutions for collateral shortfalls if a default or insolvency has occurred. At September 30, 2015, all of the city's bank deposits were in qualified public depositories. 46 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 5 - Cash and Investments (Continued): Investments (Continued) For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2015, none of the investments listed are exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form. Concentration of Credit Risk: The City's investment policy requires diversification, but does not specify limits on types of investments. Interest Rate Risk: The City's investment policy does not specifically address interest rate risk, however the general investment policy is to apply the prudent -person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and in general, avoid speculative investments. The City manages its exposure to declines in fair values by investing primarily in pooled investments that have a weighted average maturity of less than three months. Note 6 - Receivables: Receivables as of year end for the City's individual major funds and nonmajor funds, including the applicable allowances for uncollectible accounts, are as follows: El VA Less Allowance for Uncollectible Accounts Taxes Other Accounts Total General Fund $2,224,789 $130,448 $ 966,847 $ (2,189,680) $1,132,404 Water Fund 393,936 - 42,580 (39,907) 396,609 Sewer Fund 603,670 - - (114,457) 489,213 Sanitation Fund 299,103 - 285 (43,892) 255,496 Nonmajor Enterprise Fund 94,294 - - (14,776) 79,518 Internal Service Fund - - 2,371 (1,499) 872 Nonmajor Governmental Funds - - 65 - 65 $3,615,792 $130,448 $1,012,148 $ (2,404,211) $2,354,177 El VA CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 7 - Capital Assets: Capital asset activity for the year ended September 30, 2015 was as follows: Governmental Activities: Capital Assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital Assets, being depreciated: Buildings Improve m e nts/infrastructure Machinery and equipment Intangibles Total capital assets being depreciated Less Accumulated Depreciation for Beginning Ending Balance Increases Decreases Balance $25,727,548 $ - $ - $25,727,548 3,967,409 3,190,187 (5,918,399) 1,239,197 29,694,957 3,190,187 (5,918,399) 26,966,745 - (7,981,263) Improvements/infrastructure (9,674,238) 21,739,659 972,753 - 22,712,412 15,265,015 4,959,351 - 20,224,366 8,810,173 1,474,505 (121,555) 10,163,123 684,068 302,083 - 986,151 46,498,915 7,708,692 (121,555) 54,086,052 Buildings (7,086,017) (895,246) - (7,981,263) Improvements/infrastructure (9,674,238) (607,188) - (10,281,426) Machinery and equipment (6,618,814) (666,734) 121,555 (7,163,993) Intangibles (657,612) (66,904) - (724,516) Total accumulated depreciation (24,036,681) (2,236,072) 121,555 (26,151,198) Total capital assets being depreciated, net 22,462,234 5,472,620 - 27,934,854 Governmental activities capital assets, net $52,157,191 $ 8,662,807 $ (5,918,399) $54,901,599 Increases in accumulated depreciation for governmental activities includes accumulated depreciation on assets transferred from business -type activities, therefore total increases is not the same as depreciation expense. This difference is $39,821. era CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS Note 7 - Capital Assets (Continued): Business -type activities: Capital Assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital Assets, being depreciated: Buildings Improvements/infrastructure Machineryand equipment Intangibles Total capital assets being depreciated Less Accumulated Depreciation for: Buildings Improve m e nts/infrastructure Machineryand equipment Intangibles Total accumulated depreciation Total capital assets being depreciated, net Business -type activities capital assets, net September 30, 2015 Beginning Ending Balance Increases Decreases Balance $ 1,861,820 $ - $ (839,230) $ 1,022,590 4,148,655 2,335,864 (5,002,122) 1,482,397 6,010,475 2,335,864 (5,841,352) 2,504,987 (29,167,351) (3,543,757) 441,372 (32,269,736) 37,178 - (1,216) 35,962 91,644,122 5,495,899 (729,874) 96,410,147 6,504,350 1,156,893 (176,231) 7,485,012 216,011 83,891 - 299,902 98,401,661 6,736,683 (907,321) 104,231,023 (37,178) - 1,216 (35,962) (29,167,351) (3,543,757) 441,372 (32,269,736) (4,060,083) (609,773) 153,106 (4,516,750) (106,391) (6,507) - (112,898) (33,371,003) (4,160,037) 595,694 (36,935,346) 65,030,658 2,576,646 (311,627) 67,295,677 $71,041,133 $ 4,912,510 $ (6,152,979) $69,800,664 Depreciation expense was charged to functions/programs as follows: Governmental Activities: General government Public safety Physical environmentttransportation Economic environment Culture and recreation Total Depreciation Expense - governmental activities Business -type Activities Water Sewer Sanitation Stormwater Total Depreciation Expense - business -type activities CP] $ 473,854 752,041 445,665 354 524,337 $ 2,196,251 $ 1,033,421 2,376,229 401,265 349.122 $ 4,160,037 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 8 - Long -Term Debt: Bonds Payable The City issues bonds to provide funds for the acquisition and construction of major capital assets. Bonds have been issued for business -type activities. The 2009 Water and Sewer Revenue and Refunding Bonds are secured by net revenue of the water and sewer system. The total principal and interest remaining to be paid on this series is $18,687,997. For the fiscal year, principal and interest paid on this series was $1,197,635 and total pledged revenue was $4,348,670. The original amount of revenue bonds issued in prior years is described below. Revenue bonds outstanding at year end are as follows: Annual debt service requirements to maturity for revenue bonds are as follows: Year Ending September 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031 Total Notes Payable Business - Type Activities Principal Interest $ 650,000 $ 523,922 Balance 504,123 Rates and 483,723 Original September30, Business -Type Activities Dates Maturity Amount 2015 Water and Sewer Revenue 3.0-4.6% 12/1/2010 Refunding Bonds, to Series 2009 (6/1&12/1) 12/1/2030 $16,640,000 $ 13,685,000 Annual debt service requirements to maturity for revenue bonds are as follows: Year Ending September 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031 Total Notes Payable Business - Type Activities Principal Interest $ 650,000 $ 523,922 670,000 504,123 690,000 483,723 710,000 460,948 735,000 435,660 4,105,000 1,745,025 4,995,000 823,606 1,130,000 25,990 $13,685,000 $ 5,002,997 The Public Improvement Refunding Revenue Note, Series 2012, are secured by public services taxes, communications service tax and half cent sales tax revenue. Total principal and interest remaining to be paid on this series is $1,484,105. For the fiscal year, principal and interest paid on this series was $597,060 and total pledged revenue was $5,934,260. 6111 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 8 - Long -Term Debt (Continued): Notes Payable (Continued) The City issued Public Improvement Revenue Note, Series 2013 in the amount of $6,000,000 with interest of 3.05% to finance the purchase of the Arts and Recreation Center. This note is secured by public services taxes and communications service tax. Total principal and interest remaining to be paid on this series is $6,994,487. For the fiscal year, principal and interest paid on this series was $484,109 and total pledged revenue was $4,114,351. Public improvement revenue notes outstanding at year end are as follows: Governmental Activities Interest Rates and Dates Maturity Balance Original September 30, Amount 2015 Public Improvement Refunding 1.09% 12/1/2013 149,285 Revenue Note, 136,805 to 125,550 Series 2012 (6/1 & 12/1) 12/1/2017 $ 2,612,000 $ 1,463,442 Public Improvement Revenue 3.05% 12/1/2014 Note, Series 2013 (6/1 & 12/1) to 12/1/2028 $ 6,000,000 5,694,228 $ 7,157,670 Annual debt service requirements to maturity for revenue bonds are as follows Governmental Activities Year Ending Septem be r30, 2016 2017 2018 2019 2020 2021-2025 2026-2029 Total 51 Principal Interest $ 917,744 $ 181,369 933,957 164,668 638,845 149,285 363,461 136,805 374,547 125,550 2,051 ,221 446,543 1,877,895 116,702 $7,157,670 $1,320,922 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 8 - Long -Term Debt (Continued): Changes in Long -Term Liabilities Long-term liability activity for the year ended September 30, 2015 was as follows: Governmental Activities Public improve mentrevenue notes Other post employment benefits Compensated absences Governmental activity long-term liabilities Business -type Activities Bonds payable - Revenue bonds Premium Total bonds payable Other post employment benefits Compensated absences Business -type activity long-term liabilities Beginning Ending Due Within Balance Additions Deductions Balance One Year $ 8,041,401 $ - $ (883,731) $ 7,157,670 $ 917,744 2,961,865 514,461 - 3,476,326 - 758,131 387,534 (75,813) 1,069,852 106,985 $11,761,397 $ 901,995 $ (959,544) $11,703,848 $1,024,729 $14,315,000 $ - $ (630,000) $13,685,000 $ 650,000 46,069 - (2,834) 43,235 - 14,361,069 - (632,834) 13,728,235 650,000 1,053,293 162,106 - 1,215,399 - 277,979 65,365 (27,798) 315,546 31,554 $15,692,341 $ 227,471 $ (660,632) $15,259,180 $ 681,554 Note 9 - Interfund Receivables, Payables and Transfers: Interfund transfers for the year ended September 30, 2015 consisted of the following: Transfers In The majority of the transfers above were to fund various capital projects and debt service payments. The transfer out of the Water Fund is for their share of administrative expenses and asset transfers to governmental activities. The transfers out of the Sewer and Stormwater Funds were to recognize the transfer of assets to other funds. MIA General Capital Water General Nonmajor Transfers Out: Fund Projects Fund Fund Fixed Assets Govt Total General Fund $ - $ 5,796 $ - $ - $ 290,998 $ 296,794 Infrastructure Fund - 529,446 - - 430,733 960,179 Water Fund 533,857 - - 11,227 - 545,084 Sewer Fund - - - 11,227 - 11,227 Stormwater Fund - - 18,583 672 - 19,255 Nonmajor Governmental 6,838 1,683,831 - - 375,848 2,066,517 $540,695 $ 2,219,073 $ 18,583 $ 23,126 $1,097,579 $ 3,899,056 The majority of the transfers above were to fund various capital projects and debt service payments. The transfer out of the Water Fund is for their share of administrative expenses and asset transfers to governmental activities. The transfers out of the Sewer and Stormwater Funds were to recognize the transfer of assets to other funds. MIA CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 9 - Interfund Receivables, Payables and Transfers (Continued): The composition of interfund receivables and payables as of September 30, 2015 is as follows: Receivable Fund Payable Fund Amount General Fund Capital Projects Fund $ 68,030 Sanitation Fund General Fund 947,127 $ 1,015,157 The balance due to the Sanitation fund is a result of an interfund loan for the purchase of a fire truck to be repaid over ten years. Note 10 - Retirement Plans: The City maintains three separate single -employer, defined benefit plans for general employees, sworn police officers and firefighters, as well as a defined contribution plan for general employees. The investment and administrative agent for the defined benefit plans is the Florida Municipal Pension Trust Fund, an agent of the multiple -employer Public Employee Retirement System. The assets and benefits of the defined contribution plan are administered by the Florida League of Cities. Defined Benefit Pension Plans - Each plan is independently governed by separate boards of trustees. Assets may not be transferred between plans, or used for any purpose other than to benefit each plan's participants as defined in their authorizing ordinances. Each board contracts with the Florida Municipal Pension Trust Fund (FMPTF), a private, not-for-profit corporation established by the Florida League of Cities (FLC) for FLC members who wish to use its services. The FMPTF acts as a common investment and administrative agent for its members, contracting with a bank custodian, investment manager and actuary to provide a commingled investment fund and plan valuation services. These plans are included as part of the City's reporting entity in Pension Trust Funds. The Clermont City Council adopted and may amend plan provisions by resolution. Stand-alone audited financial statements of the FMPTF are maintained on file at the FLC offices in Tallahassee, Florida, and are available upon request to the Pension Services Division. A. General Employees - Contributions - The City's actuarially determined contribution rate per the October 1, 2014 actuarial valuations is $0 for general employees. The City is no longer obligated to make contributions for general employees. Administrative costs are deducted from the net position of the plan. W CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): A. General Employees (Continued) - Summary of Significant Accounting Policies Plan Description - The general employees defined benefit pension plan is for general employees hired prior to September 30, 1985. Plan Administration - The General Employees' Pension is administered by a Board of Trustees. Plan Membership - At September 30, 2015 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 8 Inactive Plan Members Entitled to but Not Yet Receiving Benefits - Active Plan Members - 8 Net Pension Liability of the City - The City's net pension liability was measured as of September 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The components of the net pension liability (asset) of the sponsor on September 30, 2015 were as follows: Total Pension Liability Plan Fiduciary Net Position Sponsor's Net Pension Liability (Asset) Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) $ 344,982 (391,547) $ (46, 565) 113.50% Actuarial Assumptions - The total pension liability was determined by an actuarial valuation as of October 1, 2014, updated September 30, 2015 using the following actuarial assumptions: Inflation 3.60% Salary Increases 0.00% Investment Rate of Return 9.08% 54 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): A. General Employees (Continued) - Mortality rates were based on the sex -distinct rates set forth in the RP -2000 Mortality Table for annuitants and non -annuitants, projected to 2015 by Scale AA, as published by the Internal Revenue Service (IRS) for purposes of Internal Revenue Code (IRC) section 430; future generational improvements in mortality have not been reflected. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2015 are summarized in the following table: Long Term Expected Asset Class Target Allocation Real Rate of Return Core Bonds Multi -sector U.S. Large Cap Equity U.S. Small Cap Equity Non -U.S. Equity Total 16% 2.48% 24% 2.20% 39% 7.14% 11% 8.45% 10% 8.43% 100% Discount rate - The discount rate used to measure the total pension liability was 9.08%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 61.7 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): A. General Employees (Continued) - Changes in Net Pension Liability Balance at September 30, 2014 Changes Due to: SeMce Cost Expected interest growth Unexpected investment income Demographic experience Benefit payments and refunds Administrative expenses Assumption changes Balance at September 30, 2015 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) $ 349,279 $ 458,926 $ (109,647) 29,060 40,676 (63, 484) (10, 549) $ 344,982 38,562 (35, 949) (63, 484) (6,508) $ 391,547 Sensitivity of the Net Pension Liability to changes in the Discount Rate Current Discount 1% Decrease Rate 8.08% 9.08% General Pension Plan Net Pension Liability Deferred outflows and inflows of resources (9,502) 35,949 40,676 6,508 (10, 549) $ (46,565) 1% Increase 10 n8% $ (30,452) $ (46,565) $ (61,278) For the year ended September 30, 2015 the City will recognize a pension expense of $8,212. On September 30, 2015 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience $ Changes of assumptions Net difference between projected and actual earnings on pension plan investments 613 Deferred Outflows of Deferred Inflows Resources of Resources 34,189 $ - - 8,867 28,759 2,367 $ 62,948 $ 11,234 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): A. General Employees (Continued) - Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30 2016 $ 11,206 2017 11,206 2018 11,206 2019 11,994 2020 4,805 Thereafter 1.297 B. Police Officers' Retirement - The police officers' defined benefit pension plan is a local law, single employer, defined benefit pension plans as defined under Florida Statutes, Chapters 175 and 185, which covers all sworn police officers. Employees are eligible to participate in the plan immediately upon employment with the City, and they are vested in the plan after ten years of service. The plan is administered by a board of Trustees. Contributions - The City's actuarially determined contribution rate per the October 1, 2014 actuarial valuation. Employees must contribute 3% of pensionable earnings. Administrative costs are deducted from the net position of the plan. Contributions from the State received under Florida State Statutes 175 and 185 amounted to $240,486 in 2015 and were recorded as revenue and expenditures in the general fund. Benefits Provided - The plan provides retirement, disability, and pre -retirement death benefits. Normal retirement is defined as the attainment of age 55 and 10 years of service, or 20 years of service, regardless of age. The normal retirement benefit is the number of years of credited service prior to October 1, 2002 multiplied by 2.25%, and the number of years of credited service after October 1, 2002 multiplied by 3%, and multiplied by the average final monthly compensation. Early retirement is defined as attainment of age 50 and 10 years of service; however, the early retirement benefit is reduced by 3% for each year before the normal retirement date. Employees are 50% vested after five years of service, increasing at the rate of 10% per year, up to 100% vesting after 10 years of service. Disability benefits are the larger of the basic pension formula or 42% of average earnings for service connected disabilities. For non -service connected disabilities, benefits are the larger of the basic pension formula or 25% of average earnings, and require 10 years of service. Disability pension is offset as necessary to preclude the total of the participant's worker's compensation, disability pension, and other City -financed disability or salary continuation benefit (excluding social security benefits) from exceeding average earnings. Pre -retirement death benefits for vested members are the vested portion of the basic pension formula, reduced for payment prior to normal retirement age (payable for 10 years certain to the beneficiary of a vested participant). For non -vested participants the benefit is the return of accumulated employee contributions. M CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): B. Police Officers' Retirement (Continued) - Plan Membership - At September 30, 2015 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 15 Inactive Plan Members Entitled to but Not Yet Receiving Benefits 11 Active Plan Members 60 86 Net Pension Liability of the City - The City's net pension liability was measured as of September 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The components of the net pension liability (asset) of the sponsor on September 30, 2015 were as follows: Total Pension Liability Plan Fiduciary Net Position Sponsors Net Pension Liability (Asset) Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) * does not include excess chapter 175/185 contributions $ 10,126,748 (12,874,567) $ (2,747,819) 127.13% Actuarial Assumptions - The total pension liability was determined by an actuarial valuation as of October 1, 2014, updated September 30, 2015 using the following actuarial assumptions: Inflation 3.60% Salary Increases 5.50% Investment Rate of Return 9.08% Mortality rates were based on the sex -distinct rates set forth in the RP -2000 Mortality Table for annuitants and non -annuitants, projected to 2007 by Scale AA, as published by the Internal Revenue Service (IRS) for purposes of Internal Revenue Code (IRC) section 430; future generational improvements in mortality have not been reflected. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 617 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): B. Police Officers' Retirement (Continued) - Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2015 are summarized in the following table: Asset Class Target Allocation Core Bonds 16% Multi -sector 24% U.S. Large Cap Equity 39% U.S. Small Cap Equity 11% Non -U.S. Equity 10% Total 100% Long Term Expected Real Rate of Return 2.48% 2.20% 7.14% 8.45% 8.43% Discount rate - The discount rate used to measure the total pension liability was 9.08%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in Net Pension Liability Balance at September 30, 2014 Changes Due to: SeMce Cost Expected interest growth Unexpected investment income Demographic experience Employer contributions Employee contributions Benefit payments and refunds Administrative expenses Assumption changes Balance at September 30, 2015 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) $ 9,166, 440 $ 12, 621, 003 $ (3,454,563) 560,680 - 560,680 860,884 1,157,905 (297,021) - (1,172,684) 1,172,684 (162,697) - (162,697) 522,208 (522,208) 99,188 (99,188) (298,559) (298,559) - (54,494) 54,494 $ 10,126,748 $ 12,874,567 $ (2,747,819) 6X] CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): B. Police Officers' Retirement (Continued) - Sensitivity of the Net Pension Liability to changes in the Discount Rate Police Pension Net Pension Liability Deferred outflows and inflows of resources For the year ended September 30, 2015 the City will recognize a pension expense of $436,231. On September 30, 2015 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows Resources of Resources Differences between expected and actual experience $ $ - Changes of assumptions 145,426 Net difference between projected and actual earnings on pension plan investments 938,147 - $ 938,147 $ 145,426 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2016 2017 2018 2019 2020 Thereafter $ 217,266 217,266 217,266 217,265 (17, 271) (59,071) Deferred Retirement Option Program (DROP) - DROP is available to participants who have attained their normal retirement age and individuals may participate in the DROP for up to 60 months; DROP accounts are credited with interest at the rate of 6.50% per annum. The Police DROP balance as of September 30, 2015 is $199,645. 6i0 Current Discount 1% Decrease Rate 1% Increase 8.08% 9.08% 10.08% $(1,504,457) $(2,747,819) $ (3,791,493) For the year ended September 30, 2015 the City will recognize a pension expense of $436,231. On September 30, 2015 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows Resources of Resources Differences between expected and actual experience $ $ - Changes of assumptions 145,426 Net difference between projected and actual earnings on pension plan investments 938,147 - $ 938,147 $ 145,426 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2016 2017 2018 2019 2020 Thereafter $ 217,266 217,266 217,266 217,265 (17, 271) (59,071) Deferred Retirement Option Program (DROP) - DROP is available to participants who have attained their normal retirement age and individuals may participate in the DROP for up to 60 months; DROP accounts are credited with interest at the rate of 6.50% per annum. The Police DROP balance as of September 30, 2015 is $199,645. 6i0 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): C. Firefighters' Retirement - The firefighters' defined benefit pension plan is a local law, single employer, defined benefit pension plans as defined under Florida Statutes, Chapters 175 and 185, which covers all sworn police officers. Employees are eligible to participate in the plan immediately upon employment with the City, and they are vested in the plan after ten years of service. The plan is administered by a board of Trustees. Contributions - The City's actuarially determined contribution rate per the October 1, 2014 actuarial valuation. Employees must contribute 4% of pensionable earnings. Administrative costs are deducted from the net position of the plan. Contributions from the State received under Florida State Statutes 175 and 185 amounted to $181,292 in 2015 and were recorded as revenue and expenditures in the general fund. Benefits Provided - The plan provides retirement, disability, and pre -retirement death benefits. Normal retirement is defined as the attainment of age 55 and 10 years of service, or 20 years of service, regardless of age. The normal retirement benefit is the number of years of credited service prior to October 1, 2002 multiplied by 2.25%, and the number of years of credited service after October 1, 2002 multiplied by 3%, and multiplied by the average final monthly compensation. Volunteer firefighters earn a minimum benefit of $5 for each year of service. Early retirement is defined as attainment of age 50 and 10 years of service; however, the early retirement benefit is reduced by 3% for each year before the normal retirement date. Employees are 50% vested after five years of service, increasing at the rate of 10% per year, up to 100% vesting after 10 years of service. Disability benefits are the larger of the basic pension formula or 42% of average earnings for service connected disabilities. For non -service connected disabilities, benefits are the larger of the basic pension formula or 25% of average earnings, and require 10 years of service. Disability pension is offset as necessary to preclude the total of the participant's worker's compensation, disability pension, and other City -financed disability or salary continuation benefit (excluding social security benefits) from exceeding average earnings. Pre -retirement death benefits for vested members are the vested portion of the basic pension formula, reduced for payment prior to normal retirement age (payable for 10 years certain to the beneficiary of a vested participant). For non -vested participants the benefit is the return of accumulated employee contributions. Plan Membership - At September 30, 2015 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 1 Inactive Plan Members Entitled to but Not Yet Receiving Benefits 62 Active Plan Members 58 121 FYd CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): C. Firefighters' Retirement (Continued) - Net Pension Liability of the City - The City's net pension liability was measured as of September 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The components of the net pension liability (asset) of the sponsor on September 30, 2015 were as follows: Total Pension Liability Plan Fiduciary Net Position Sponsors Net Pension Liability (Asset) Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) * does not include excess chapter 175/185 contributions 6,617,503 (9,466,087) $ (2,848,584) 143.05% Actuarial Assumptions - The total pension liability was determined by an actuarial valuation as of October 1, 2014, updated September 30, 2015 using the following actuarial assumptions: Inflation 3.60% Salary Increases 5.50% Investment Rate of Return 9.08% Mortality rates were based on the sex -distinct rates set forth in the RP -2000 Mortality Table for annuitants and non -annuitants, projected to 2007 by Scale AA, as published by the Internal Revenue Service (IRS) for purposes of Internal Revenue Code (IRC) section 430; future generational improvements in mortality have not been reflected. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. rra CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): C. Firefighters' Retirement (Continued) - Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2015 are summarized in the following table: Asset Class Target Allocation Core bonds 16% Multi -sector 24% U.S. Large Cap Equity 39% U.S. Small Cap Equity 11% Non -U.S. Equity 10% Total 100% Long Term Expected Real Rate of Return 2.48% 2.20% 7.14% 8.45% 8.43% Discount rate - The discount rate used to measure the total pension liability was 9.08%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in Net Pension Liability Balance at September 30, 2014 Changes Due to: SeMce Cost Expected interest growth Unexpected investment income Demographic experience Employer contributions Employee contributions Benefit payments and refunds Administrative expenses Assumption changes Balance at September 30, 2015 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) $ 5,607,656 $ 8,571,627 $ (2,963,971) 524,325 - 524,325 553,753 819,482 (265,729) - (852,181) 852,181 (67,286) - (67,286) 827,357 (827,357) - 141,632 (141,632) (945) (945) - - (40,885) 40,885 $ 6,617,503 $ 9,466,087 $ (2,848,584) rx] CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): C. Firefighters' Retirement (Continued) - Sensitivity of the Net Pension Liability to changes in the Discount Rate Deferred outflows and inflows of resources For the year ended September 30, 2015 the City will recognize a pension expense of $321,157. On September 30, 2015 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows Resources of Resources Differences between expected and actual experience $ $ - Changes of assumptions 60,158 Net difference between projected and actual earnings on pension plan investments 681,745 - $ 681,745 $ 60,158 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2016 2017 2018 2019 2020 Thereafter $ 163,308 163,308 163,308 163,309 (7,128) (24, 518) Deferred Retirement Option Program (DROP) - DROP is available to participants who have attained their normal retirement age and individuals may participate in the DROP for up to 60 months; DROP accounts are credited with interest at the rate of 6.50% per annum. The Fire DROP balance as of September 30, 2015 is $0. Current Discount 1% Decrease Rate 1% Increase 8.08% 9.08% 10.08% Fire Pension Net Pension Liability $(1,894,105) $(2,848,584) $ (3,641,361) Deferred outflows and inflows of resources For the year ended September 30, 2015 the City will recognize a pension expense of $321,157. On September 30, 2015 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows Resources of Resources Differences between expected and actual experience $ $ - Changes of assumptions 60,158 Net difference between projected and actual earnings on pension plan investments 681,745 - $ 681,745 $ 60,158 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2016 2017 2018 2019 2020 Thereafter $ 163,308 163,308 163,308 163,309 (7,128) (24, 518) Deferred Retirement Option Program (DROP) - DROP is available to participants who have attained their normal retirement age and individuals may participate in the DROP for up to 60 months; DROP accounts are credited with interest at the rate of 6.50% per annum. The Fire DROP balance as of September 30, 2015 is $0. CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 10 - Retirement Plans (Continued): General Employee Defined Contribution Pension Plan - The defined Contribution Pension Plan for General Employees of the City of Clermont was established October 1, 1985, as defined in Chapter 16, Article IV, of the Clermont Code, and is available to all permanent general employees of the City, once they have completed one year of employment. Employees are fully vested in the plan after ten years of service. In a defined contribution plan, benefits depend solely on amounts contributed to the plan, plus investment earnings. Contributions for, and interest forfeited by, employees who terminate employment before five years of service are used to reduce the City's current period contributions. Covered payroll for this Plan for fiscal year 2015 was $6,095,900; the City's total payroll for City employees was $13,681,329. The City contributes annually to the pension account of each active participant an amount equal to ten percent (10%) of the employee's annual compensation. No contribution is required by employees. The City of Clermont City Council adopted and may amend plan provision by resolution. The actual contribution made by the City for fiscal year 2015 was $561,578 Note 11 - Other Post Employment Benefits: In accordance with Florida Statutes Section 112.0801, the City makes continued group health and dental insurance through the city's current provider available to retirees and eligible dependents provided certain service requirements and normal age retirement requirements have been met. This plan is a single employer plan. The City is self insured with respect to these benefits and provides an explicit subsidy for coverage to retirees and their spouses based on the coverage selected. The City has eleven retirees currently receiving benefits. The City has chosen pay-as-you-go funding, but is recording the liability in the government wide financial statements. This plan does not issue stand-alone financial statements. The most recent actuarial report for the City's Retiree Continuation Insurance Plan was prepared as of April 1, 2015. The annual required contribution and Net OPEB Obligation for the fiscal year ended September 30, 2015 is as follows: Annual Required Contribution $ 927,336 Interest on Net OPEB Obligation 160,606 Adjustment to Annual Required Contribution (347,238) Annual OPEB Cost 740,704 Employer Contributions (64,137) Increase in Net OPEB Obligation 676,567 Net OPEB Obligation (beginning of year) 4,015,158 Net OPEB Obligation (end of year) $4,691,725 M1 CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 11 - Other Post Employment Benefits (Continued): Three Year Trend Information - Fiscal Actuarial Percentage Year Annual of Cost Net OPEB Ending OPEB Cost Contributed Obligation 9/30/2013 $ 1,010,011 10.0% $ 3,120,055 9/30/2014 967,942 7.5% 4,015,158 9/30/2015 740,704 9.0% 4,691,725 Funded Status and Funding Progress - OPEB The funded status of the plan as of April 1, 2015, the most recent actuarial valuation date, is as follows: Summary of Actuarial Methods & Assumptions: Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. ria Actuarial Accrued UAAL as a Actuarial Liability Percentage Value of (AAL) - Entry Unfunded Funded Covered of Covered Assets Age AAL (UAAL) Ratio Payroll Payroll (a) (b) (b - a) (alb) (c) ((b-a)/c) $ - $ 4,835,731 $ 4,835,731 0.0% $ 14,667,088 33.00% Summary of Actuarial Methods & Assumptions: Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. ria CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 11 -Other Post Employment Benefits (Continued): Summary of Actuarial Methods & Assumptions (Continued) Actuarial Cost Method - The projected unit credit cost method. Amortization Method - level dollar open over 15 years. Benefits Not Included - None. Discount Rate - 4.00%. Inflation rate - 3% Health Care Costs Trend Rates -The cost of covered medical services has been assumed to increase in accordance with the following rates, compounded annually: Year Increase Year 2016 7.50% 2020 2017 7.22% 2021 2018 6.94% 2022 2019 6.67% 2023 Increase Year Increase 6.39% 2024 5.287/o 6.11% 2025 5.00% 5.83% and later 5.56% Retiree Contribution Trend - Same as Health Care Trend. Mortality - RP -2000 Combined Mortality Table for males and females with mortality improvement projected to 2015 using Scale AA. Morbidity: Age Under 65 65-69 70-74 75-85 86 and older Rate Per Age 4.50% 3.00% 2.50% 2.00% 0.00% Election at Retirement - 40% of future retirees will elect medical and dental coverage at retirement. Participation - Active employees are assumed to continue at the current participation and coverage level into retirement. If an employee waived active coverage, they are assumed to elect the OAP Plan. Marital Status - 60% of active employees who elect retiree coverage are assumed to elect coverage for their spouse. Males are assumed to be three years older than females. Actual spouse data was used for current retirees. MA CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 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 $150,000 per year in medical, dental, or prescription claims for each covered employee. The City purchases commercial insurance for claims in excess of coverage provided by the fund with a total aggregate stop -loss of $3,800,000. There has been no reduction in insurance coverage from that carried in the prior year. Claims provided have not exceeded insurance coverage in any of the past three fiscal years. The general, water, sewer, sanitation and stormwater funds participate in the program and make payments to the internal service fund based on the number of employees budgeted in each fund. The claims liability of $90,143 represents claims processed through October 2015 which were applicable to the current fiscal year and any additional claims are deemed immaterial. Changes to the current claims liability are as follows: Claims Liabilities, beginning of year Incurred Claims Payments on Claims Claims Liabilities, end of year Note 13 - Commitments and Contingencies: 2015 $ 286,698 3,872,477 2014 $ 62,051 3,453,582 (4,069,032) (3,228,935) $ 90,143 $ 286,698 Litigation - The City is engaged in various liability claims incidental to the conduct of its general government operations at September 30, 2015. While the ultimate outcome of the litigation cannot be determined at this time, management believes that any amounts not covered by insurance, if any, resulting from these lawsuits would not materially affect the financial position of the City. Risk Management - The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the City carries commercial insurance. The City has obtained excess insurance coverage with varying retentions and limits to further limit exposure to large losses. There have been no significant reductions in insurance coverage from the prior year and settlements have not exceeded insurance coverage during the past three years. Biz CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 14 - Fund Balances: The City classifies the components of fund balance based on the classifications described below: Nonspendable funds include fund balance amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. Spendable Fund Balance Restricted - includes fund balance amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws and regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Committed - includes fund balance amounts that can be used only for the specific purposes determined by formal action of the City Council, the City's highest level of decision making authority, with formal action occurring prior to the fiscal year end. Commitments may be changed or lifted only by the City Council taking the same formal action (Resolution) that imposed the constraint originally. Assigned - includes spendable fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. The City Council is authorized to assign amounts for a specific purpose. Unassigned - includes residual positive fund balance within the General Fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as in grant agreements requiring dollar for dollar spending. Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. M CITY OF CLERMONT. FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2015 Note 14 - Fund Balances (Continued): At September 30, 2015, the City's governmental fund balances were as follows: Note 15 - Subsequent Events: Subsequent to year end, the City issued Public Improvement Refunding Revenue Note, Series 2016 in March 2016 to refund the 2013 Public Improvement Revenue Note. The Series 2016 Note has an interest rate of 2.03% with principal and interest payments due through maturity date of December 1, 2028. The City also issued Infrastructure Sales Surtax Revenue Note, Series 2016 that has an interest rate of 2.12% with principal and interest payments due through maturity date of December 1, 2030. VLU Infrastructure Community Other General Capital Special Redevelopment Governmental Fund Projects Revenue Fund Special Revenue Funds Total Fund Balances Nonspendable Inventory/prepaids $ 1,299,870 $ - $ 380,347 $ - $ 2,385 $ 1,682,602 Cemetery - _ - - 1,083,860 1,083,860 Spendable Restricted for: Police 246,929 _ - - 2,897,850 3,144,779 Fire - - - - 632,423 632,423 Building Services - _ - - 86,580 86,580 Culture and recreation - _ - - 233,145 233,145 Conrrunity redevelopment _ - - 552,606 - 552,606 Infrastructure - - 2,383,713 - - 2,383,713 Debt service - _ - - 872,649 872,649 Assigned for: Subsequent year expenditures 304,600 - - - - 304,600 Unassigned 7,013,550 _ _ - - 7,013,550 $ 8,864,949 $ - $ 2,764,060 $ 552,606 $ 5,808,892 $17,990,507 Note 15 - Subsequent Events: Subsequent to year end, the City issued Public Improvement Refunding Revenue Note, Series 2016 in March 2016 to refund the 2013 Public Improvement Revenue Note. The Series 2016 Note has an interest rate of 2.03% with principal and interest payments due through maturity date of December 1, 2028. The City also issued Infrastructure Sales Surtax Revenue Note, Series 2016 that has an interest rate of 2.12% with principal and interest payments due through maturity date of December 1, 2030. VLU W-EQUAMD SUPPLE5KEWM 1"0"gq7ojrNr cLEIRlv(ONT Choice of Champions' CITY OF CLERMONT. FLORIDA REQUIRED SUPPLEMENTARY INFORMATION September 30, 2015 Schedule of Funding Progress - Retiree Continuation Insurance Plan Schedule of Funding Progress 'initial valuation date Schedule of Employer Contributions - Retiree Continuation Insurance Plan Percentage Annual Required UAAL as a Net OPEB Fiscal Year Ending Actuarial Contributed Obligation 9/30/2010 %of Actuarial Actuarial Value Accrued Liability Unfunded AAL Funded 1,650,000 Covered Valuation of Assets (AAL) Entry Age (UAAL) Ratio Covered Payroll Payroll Date (a) (b) (b -a) (a/b) ( c) (b -a) / c 5/1/2009 ' $ - $ 2,413,000 $ 2,413,000 0.0% $ 10,764,000 22.4% 4/1/2011 - 2,909,000 2,909,000 0.0% 10,342,000 28.1% 4/1/2013 - 5,563,664 5,563,664 0.0% 10,854,391 51.0% 4/1/2015 - 4,835,731 4,835,731 0.0% 14,667,088 33.0% 'initial valuation date Schedule of Employer Contributions - Retiree Continuation Insurance Plan 71 Percentage Annual Required of ARC Net OPEB Fiscal Year Ending Contribution (ARC) Contributed Obligation 9/30/2010 $ 611,000 5.0% $ 1,099,000 9/30/2011 649,000 7.0% 1,650,000 9/30/2012 691,000 7.0% 2,215,000 9/30/2013 1,112,968 10.0% 3,120,055 9/30/2014 1,112,968 6.5% 4,015,158 9/30/2015 927,336 6.9% 4,691,725 71 CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS GENERAL EMPLOYEES September 30, 2015 Total Pension Liability Service Cost Interest Changes in Excess State Money Differences Between Expected and Actual Experience Changes of Assumptions Benefit Payments, including refunds of employee contributions Net Change in Total Pension Liability Total Pension Liability -beginning Total Pension Liability -ending (a) Plan Fiduciary Net Position Contributions -employer Contributions -state Contributions -employee Net Investment Income Benefit Payments, including refunds of employee contributions Administrative Expense Other Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - beginning Plan Fiduciary Net Position - ending (b) Net Pension Liability - ending (a)- (b) Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered -employee Payroll Net Pension Liability as a Percentage of Covered Employee Payroll WA 9/30/2015 29,060 9/30/2014 28,229 40,676 40,560 (10, 549) (66,212) (63, 484) (56, 412) (4,297) (28,183) 349,279 377,462 $ 344,982 $ 349,279 2,613 40,560 (63,484) (66,212) (6,508) (3,136) (67,379) (28,788) 458,926 487,714 $ 391,547 $ 458,926 $ (46,565) $ (109,647) 113.50% 131.39% N/A N/A CITY OF CLERMONT. FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS POLICE September 30, 2015 Plan Fiduciary Net Position Contributions -employer 9/30/2015 9/30/2014 Total Pension Liability 240,486 217,653 Service Cost $ 560,680 $ 524,531 Interest 860,884 723,246 Changes in Excess State Money - - Differences Between Expected and Actual Experience (162,697) (334,599) Changes of Assumptions (54,494) (31,851) Benefit Payments, including refunds of employee - contributions (298,559) (532,943) Net Change in Total Pension Liability 960,308 714,834 Total Pension Liability -beginning 9,166,440 8,451,606 Total Pension Liability -ending (a) $ 10,126,748 $ 9,166,440 Plan Fiduciary Net Position Contributions -employer 281,722 411,953 Contributions -state 240,486 217,653 Contributions -employee 99,188 95,733 Net Investment Income (14,779) 1,043,670 Benefit Payments, including refunds of employee contributions (298,559) (334,599) Administrative Expense (54,494) (31,851) Other - Net Change in Plan Fiduciary Net Position 253,564 1,402,559 Plan Fiduciary Net Position - beginning 12,621,003 11,218,444 Plan Fiduciary Net Position - ending (b) $ 12,874,567 $ 12,621,003 Net Pension Liability - ending (a) - (b) $ (2,747,819) $ (3,454,563) Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered -employee Payroll Net Pension Liability as a Percentage of Covered Employee Payroll VA] 127.13% $ 3,108, 552 -88.40% 137.69% $ 3,108, 552 -111.13% CITY OF CLERMONT. FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS FIRE September 30, 2015 Plan Fiduciary Net Position Contributions -employer 9/30/2015 9/30/2014 Total Pension Liability 181,292 175,931 Service Cost $ 524,325 $ 596,543 Interest 553,753 530,089 Changes in Excess State Money - - Differences Between Expected and Actual Experience (67,286) (756) Changes of Assumptions - (24,109) Benefit Payments, including refunds of employee - contributions (945) (81,466) Net Change in Total Pension Liability 1,009,847 1,045,166 Total Pension Liability -beginning 5,607,656 4,562,490 Total Pension Liability -ending (a) $ 6,617,503 $ 5,607,656 Plan Fiduciary Net Position Contributions -employer 646,065 438,902 Contributions -state 181,292 175,931 Contributions -employee 141,632 86,520 Net Investment Income (32,699) 704,467 Benefit Payments, including refunds of employee contributions (945) (756) Administrative Expense (40,885) (24,109) Other - Net Change in Plan Fiduciary Net Position 894,460 1,380,955 Plan Fiduciary Net Position - beginning 8,571,627 7,190,672 Plan Fiduciary Net Position - ending (b) $ 9,466,087 $ 8,571,627 Net Pension Liability - ending (a) - (b) $ (2,848,584) $ (2,963,971) Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered -employee Payroll Net Pension Liability as a Percentage of Covered Employee Payroll 74 143.05% $ 2,798,049 -101.81% 152.86% $ 2,798,049 -105.93% CITY OF CLERMONT. FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS AND INVESTMENT RETURNS GENERAL EMPLOYEES September 30, 2015 9/30/2015 9/30/2014 Actuarially Determined Contribution $ $ Contributions in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) $ $ Covered Employee Payroll Contributions as a Percentage of Co\ered employee Payroll N/A N/A Notes to Schedule Valuation Date 10/1/2014 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, open Remaining Amortization Period 30 years Asset Valuation Method Market Value Inflation 3.60% Salary Increases N/A Interest Rate 9.08% per year, compounded annually, net of investment expenses Schedule of Investment Returns 9/30/2015 9/30/2014 Annual money -weighted rate of return, net of investment expenses -0.05% 8.55% W CITY OF CLERMONT. FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS AND INVESTMENT RETURNS POLICE September 30, 2015 9/30/2015 9/30/2014 Actuarially Determined Contribution $ 583,559 $ 629,606 Contributions in Relation to the Actuarially Determined Contribution 522,208 629,606 Contribution Deficiency (Excess) $ 61,351 $ - Covered Employee Payroll 3,108,552 2,424,191 Contributions as a Percentage of Covered Employee Payroll 16.80% 25.97% Notes to Schedule Valuation Date 10/1/2014 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, open Remaining Amortization Period 30 Years Asset Valuation Method Market Value Salary Increases 5.50% per annum Interest Rate 9.08% per annum (3.60% per annum is attributable to long-term inflation), this rate was used to discount all future benefit payments Retirement 20% of eligible participants are assumed to retire at each of ages 52 through 54 and 100% of eligible participants are assumed to retire at normal retirement age Other Decrements Assumed employment termination is based on age and ranges from 5.00% at age 20 to 0.00% at age 50 Assumed disability is based on age and ranges from 0.03% at age 20 to 0.18% at age 50, 75% of disabilities are assumed to be service - connected Mortality Sex -distinct rates set forth in the RP -2000 Mortality Table for annuitants and non -annuitants, projected to 2007 by Scale AA, as published by the Internal Revenue Service (IRS) for purposes of Internal Revenue Code (IRC) section 430, future generational improvements in mortality have not been reflected Non -investment Expenses Liabilities have been loaded by 1.50% to account for non -investment expenses Future Contributions Contributions from the employer and employees are assumed to be made as legally required. Schedule of Investment Returns 9/30/2015 9/30/2014 Annual money -weighted rate of return, net of investment expenses -0.05% 8.55% 76 CITY OF CLERMONT. FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS AND INVESTMENT RETURNS FIRE September 30, 2015 9/30/2015 9/30/2014 Actuarially Determined Contribution $ 603,000 $ 614,833 Contributions in Relation to the Actuarially Determined Contribution 827,357 614,833 Contribution Deficiency (Excess) $ (224,357) $ - Covered Employee Payroll 2,798,049 2,767,580 Contributions as a Percentage of Covered Employee Payroll 29.57% 22.22% Notes to Schedule Valuation Date 10/1/2014 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported Methods and assumptions used to determine contribution rates: Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, Open Remaining Amortization Period 30 Years Asset Valuation Method Market Value Salary Increases 5.50% per annum Interest Rate 9.08% per annum (3.60% per annum is attributable to long-term inflation), this rate was used to discount all future benefit payments Retirement 20% of eligible participants are assumed to retire at each of ages 52 through 54 and 100% of eligible participants are assumed to retire at normal retirement age Other Decrements Assumed employment termination is based on age and ranges from 4.30% at age 20 to 0.00% at age 50 Assumed disability is based on age and ranges from 0.03% at age 20 to 0.18% at age 50, 75% of disabilities are assumed to be service - connected Mortality Sex -distinct rates set forth in the RP -2000 Mortality Table for annuitants and non -annuitants, projected to 2007 by Scale AA, as published by the Internal Revenue SeMce (IRS) for purposes of Internal Revenue Code (IRC) section 430, future generational improvements in mortality have not been reflected Non -investment Expenses Liabilities have been loaded by 1.75% to account for non -investment expenses Future Contributions Contributions from the employer and employees are assumed to be made as legally required. Schedule of Investment Returns 9/30/2015 9/30/2014 Annual money -weighted rate of return, net of investment expenses -0.05% 8.55% 1115111511 cLEIRlv(ONT Choice of Champions' 78 C05WBI9VI9v*G,g" I"IVI(D` -9L T71" STA`1 *E NZ,9 VrD SCMXDVLES cLEIRlv(ONT Choice of Champions' MAJOR GOVERNMENTAL FUNDS Capital Projects Fund Capital Projects Fund This fund was established to account for financial resources segregated for the acquisition or construction of major capital facilities. 0.4 CITY OF CLERMONT, FLORIDA BUDGET AND ACTUAL Year Ended September 30, 2015 Revenues: Intergovernmental revenues Investment earnings Total revenues Expenditures: Current: Culture and recreation Public safety: Police Capital Outlay: Public safety Culture and recreation Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources: Transfers in Total other financing sources Net Change in Fund Balance Fund Balances - beginning Fund Balances - ending Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 307,804 $ 581,611 $ 498,253 $ (83,358) 1,200 1,200 - (1,200) 309,004 582,811 498,253 (84,558) 53,770 78,893 21,895 56,998 216,653 248,353 - 248,353 4,090,000 3,186,372 236,976 2,949,396 1,427,400 2,445,170 2,458,455 (13,285) 5,787,823 5,958,788 2,717,326 3,241,462 (5,478,819) (5,375,977) (2,219,073) 3,156,904 5,478,819 5,375,977 2,219,073 (3,156,904) 5,478,819 5,375,977 2,219,073 (3,156,904) 1..➢1 OTHER GOVERNMENTAL FUNDS Special Revenue Funds Recreation Impact Fees Fund This fund was established to account for recreation impact fees collected from new developments constructed in the City which are restricted for use in funding capital facilities and equipment directly related to new growth. Police Impact Fees Fund This fund was established to account for police impact fees collected from new developments constructed in the City which are restricted for use in funding capital facilities and equipment directly related to new growth. Fire Impact Fee Fund This fund was established to account for fire impact fees collected from new developments constructed in the City which are restricted for use in funding capital facilities and equipment directly related to new growth. Building Services Fund This fund was established to account for the operations of the City's building and other permits department which are restricted for use in funding capital facilities and equipment directly related to new growth. Debt Service Fund Debt Service Fund This fund was established to account for the accumulation of resources and payment of bond principal and interest from governmental resources. Permanent Fund Cemetery Perpetual Care Fund This fund is used to account for monies provided by people buying lots in the City cemetery. The principal must be kept separate and apart from all other funds, but the interest may be transferred to the General Fund to defray the cost of cemetery operation and maintenance. CITY OF CLERMONT, FLORIDA COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS September 30, 2015 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ 4,732 $ 22,983 $ 27,715 Total liabilities - - 4,732 22,983 27,715 Fund balances Nonspendable - - - 2,385 2,385 Restricted 233,145 2,897,850 632,423 86,580 3,849,998 Total fund balances 233,145 2,897,850 632,423 88,965 3,852,383 Total liabilities and fund balances $ 233,145 $ 2,897,850 $ 637,155 $ 111,948 $ 3,880,098 [*A Special Revenue Recreation Police Impact Fire Impact Building Impact Fees Fees Fees Services Total Assets: Cash and cash equivalents $ 233,145 $ 2,897,850 $ 637,155 $ 109,563 $ 3,877,713 Other receivables - - - - - Prepaid costs - - - 2,385 2,385 Total assets $ 233,145 $ 2,897,850 $ 637,155 $ 111,948 $ 3,880,098 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ 4,732 $ 22,983 $ 27,715 Total liabilities - - 4,732 22,983 27,715 Fund balances Nonspendable - - - 2,385 2,385 Restricted 233,145 2,897,850 632,423 86,580 3,849,998 Total fund balances 233,145 2,897,850 632,423 88,965 3,852,383 Total liabilities and fund balances $ 233,145 $ 2,897,850 $ 637,155 $ 111,948 $ 3,880,098 [*A Permanent Fund - Total Nonmajor Cemetery Governmental Debt Service Perpetual Care Funds $ 872,649 $ 1,084,070 $ 5,834,432 - 65 65 - 2,385 $ 872,649 $ 1,084,135 $ 5,836,882 $ - $ 275 $ 27,990 - 275 27,990 - 1,083,860 1,086,245 872,649 - 4,722,647 872,649 1,083,860 5,808,892 $ 872,649 $ 1,084,135 $ 5,836,882 CITY OF CLERMONT. FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS Revenues: Licenses and permits Charges for services Impact fees/special assessments Investment earnings Miscellaneous Total revenues Expenditures: Current: Public safety Culture and recreation Debt Service: Principal Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses: Transfers in Transfers out Total other financing uses Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2015 Special Revenue Recreation Police Impact Fire Impact Building Impact Fees Fees Fees Services Total $ - $ - $ - $ 643,795 $ 643,795 - - - 106,057 106,057 1,077,768 339,370 440,443 - 1,857,581 2,560 18,482 3,037 1,010 25,089 - - - 726 726 1,080,328 357,852 443,480 751,588 2,633,248 45,000 45,000 127.107 913,839 1,040,946 - 45,000 127,107 913,839 1,085,946 1,035,328 357,852 316,373 (162,251) 1,547,302 (1,688,534) (231,275) (139,870) - (2,059,679) (1,688,534) (231,275) (139,870) - (2,059,679) (653,206) 126,577 176,503 (162,251) (512,377) 886,351 2,771,273 455,920 251,216 4,364,760 $ 233,145 $ 2,897,850 $ 632,423 $ 88,965 $ 3,852,383 CE! Permanent Fund - Total Nonmajor Cemetery Perpetual Governmental Debt Service Care Funds $ - $ - $ 643,795 106,057 - - 1,857,581 3,655 6,838 35,582 - 81,500 82,226 3,655 88,338 2,725,241 - 1,040,946 45,000 883,731 - 883,731 198,438 - 198,438 1,082,169 - 2,168,115 (1,078,514) 88,338 557,126 1,097,579 - 1,097,579 - (6,838) (2,066,517) 1,097,579 (6,838) (968,938) 19,065 81,500 (411,812) 853,584 1,002,360 6,220,704 $ 872,649 $ 1,083,860 $ 5,808,892 Cbl CITY OF CLERMONT. FLORIDA RECREATION IMPACT FEE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Revenues: Impact fees/special assessments Investment earnings Total revenues Expenditures: Current: Culture and recreation Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses Transfers out Total other financing uses Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2015 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 500,000 $ 1,075,000 $ 1,077,768 $ 2,768 6,700 6,700 2,560 (4,140) 506,700 1,081,700 1,080,328 (1,372) 105,000 169,995 45,000 124,995 105,000 169,995 45,000 124,995 401,700 911,705 1,035,328 123,623 (1,144,356) (1,649,453) (1,688,534) (39,081) (1,144,356) (1,649,453) (1,688,534) (39,081) (742,656) (737,748) (653,206) 84,542 886,351 886,351 886,351 - $ 143,695 $ 148,603 $ 233,145 $ 84,542 1..R3 CITY OF CLERMONT, FLORIDA POLICE IMPACT FEE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2015 Revenues: Impact fees/special assessments Investment earnings Total revenues Expenditures: Current: Public Safety: Law enforcement Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses) Transfers in Transfers out Total other financing sources (uses) Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 175,000 $ 175,000 $ 339,370 $ 164,370 13,500 13,500 18,482 4,982 188,500 188,500 357,852 169,352 188,500 188,500 357,852 169,352 1,203,628 - - - (4,101,266) (2,897,638) (231,275) 2,666,363 (2,897,638) (2,897,638) (231,275) 2,666,363 (2,709,138) (2,709,138) 126,577 2,835,715 2,771,273 2,771,273 2,771,273 - $ 62,135 $ 62,135 $ 2,897,850 $ 2,835,715 I-YA CITY OF CLERMONT, FLORIDA FIRE IMPACT FEE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Revenues: Impact fees/special assessments Investment earnings Total revenues Expenditures: Current: Public safety: Fire control Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses: Transfers out Total other financing sources Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2015 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 175,000 $ 200,000 $ 440,443 $ 240,443 600 600 3,037 2,437 175,600 200,600 443,480 242,880 157,450 157,450 127,107 30,343 157,450 157,450 127,107 30,343 18,150 43,150 316,373 273,223 (95,960) (427,660) (139,870) 287,790 (95,960) (427,660) (139,870) 287,790 (77,810) (384,510) 176,503 561,013 455,920 455,920 455,920 - $ 378,110 $ 71,410 $ 632,423 $ 561,013 CITY OF CLERMONT, FLORIDA BUILDING SERVICES SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2015 Expenditures: Current: Public safety 857,465 959,641 913,839 45,802 Total expenditures 857,465 959,641 913,839 45,802 Excess (Deficiency) of Revenues Over Expenditures 43,009 (4,167) (162,251) (158,084) Net Change in Fund Balances 43,009 (4,167) (162,251) (158,084) FundBalances- beginning 251,216 251,216 251,216 - Fund Balances - ending $ 294,225 $ 247,049 $ 88,965 $ (158,084) 1.14 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Licenses and permits $ 745,000 $ 800,000 $ 643,795 $ (156,205) Charges for services 153,585 153,585 106,057 (47,528) Investment earnings 1,000 1,000 1,010 10 Miscellaneous 889 889 726 (163) Total revenues 900,474 955,474 751,588 (203,886) Expenditures: Current: Public safety 857,465 959,641 913,839 45,802 Total expenditures 857,465 959,641 913,839 45,802 Excess (Deficiency) of Revenues Over Expenditures 43,009 (4,167) (162,251) (158,084) Net Change in Fund Balances 43,009 (4,167) (162,251) (158,084) FundBalances- beginning 251,216 251,216 251,216 - Fund Balances - ending $ 294,225 $ 247,049 $ 88,965 $ (158,084) 1.14 CITY OF CLERMONT. FLORIDA DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Revenues: Investment earnings Total revenues Expenditures: Debt Service: Principal Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources: Transfers in Total other financing sources Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2015 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 2,000 $ 2,000 $ 3,655 $ 1,655 2,000 2,000 3,655 1,655 883,731 883,731 883,731 - 342,889 342,889 198,438 144,451 1,226,620 1,226,620 1,082,169 144,451 (1,224,620) (1,224,620) (1,078,514) 146,106 1,245,253 1,245,253 1,097,579 (147,674) 1,245,253 1,245,253 1,097,579 (147,674) 20,633 20,633 19,065 (1,568) 853,584 853,584 853,584 - $ 874,217 $ 874,217 $ 872,649 $ (1,568) FP] FIDUCIARY FUNDS Pension Trust Funds General Employees' Pension Trust Fund Police Officers' Pension Trust Fund Firefighters' Pension Trust Fund This fund is used to account for the accumulation of resources to be used for retirement annuity payments at the appropriate amounts and times in the future. Resources are contributed at rates in accordance with an actuarial study, whereas, a fixed percentage of employees salaries is used in determining the annual contribution to the defined contribution plan. This fund is used to account for the accumulation of resources to be used forthe retirement annuities of all police officers. The state contributes an amount determined by an actuarial study. This fund is used to account for the accumulation of resources to be used for the retirement annuities of all firefighters. The state contributes money based upon the number of firefighters and the City contributes an amount determined by an actuarial study. Fyi CITY OF CLERMONT. FLORIDA COMBINING STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS September 30, 2015 General Employees Liabilities: Refunds payable and other - - 132,898 464,902 597,800 Total liabilities - - 132,898 464,902 597,800 Net Position Held in Trust for Pension Benefits $ 391,547 $ 6,599,382 $ 13,861,636 $ 9,913,377 $ 30,765,942 Fra Police Officers Firefighters Total Defined Defined Pension Pension Employee Benefit Contribution Trust Trust Pension Funds Assets: Cash and cash equivalents $ 3,132 $ - $ 110,032 $ 81,576 $ 194,740 Receivables: Due from state - - 240,486 181,292 421,778 Total receivables - - 240,486 181,292 421,778 Investments: U.S. Government & other debt securities 155,836 - 5,474,111 4,058,401 9,688,348 Equities 232,579 6,599,382 8,169,905 6,057,010 21,058,876 Total Investments 388,415 6,599,382 13,644,016 10,115,411 30,747,224 Total assets 391,547 6,599,382 13,994,534 10,378,279 31,363,742 Liabilities: Refunds payable and other - - 132,898 464,902 597,800 Total liabilities - - 132,898 464,902 597,800 Net Position Held in Trust for Pension Benefits $ 391,547 $ 6,599,382 $ 13,861,636 $ 9,913,377 $ 30,765,942 Fra CITY OF CLERMONT. FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS Year Ended September 30, 2015 General Employees Investment earnings: Police Net increase (decrease) in fair value of Officers Firefighters Total Defined Defined Pension Pension Employee (14,778) Benefit Contribution Trust Trust Funds Additions: (14,778) (32,699) (43,104) Contributions: Total additions Employer $ - $ 561,578 $ 462,483 $ 181,359 $ 1,205,420 Plan members - - 99,188 141,632 240,820 State - - 240,486 181,292 421,778 Total contributions - 561,578 802,157 504,283 1,868,018 Investment earnings: Net increase (decrease) in fair value of investments 2,613 1,760 (14,778) (32,699) (43,104) Total net investment earnings 2,613 1,760 (14,778) (32,699) (43,104) Total additions 2,613 563,338 787,379 471,584 1,824,914 Deductions: Benefits/distributions 63,484 198,872 298,559 945 561,860 Administrative expenses 6,508 29,952 54,494 40,885 131,839 Total deductions 69,992 228,824 353,053 41,830 693,699 Change in Net Position Net Position Held in Trust for Pension Benefits Beginning of Year 458,926 6,264,868 13,427,310 9,483,623 29,634,727 (67, 379) 334,514 434,326 429,754 1,131, 215 End of Year $ 391,547 $ 6,599,382 $ 13,861,636 $ 9,913,377 $ 30,765,942 Fx1 cLEIRlv(ONT Choice of Champions' 94 S7,ggZ CML SEC'770N cLEIRlv(ONT Choice of Champions' Statistical Section This part of the City of Clermont's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall health. Contents Page Financial Trends 96 These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. Revenue Capacity 106 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 111 These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. There are no limitations placed upon the amount of debt the City of Clermont may issue by either the City Charter or the City's Code of Ordinances or by Florida Statutes. The City of Clermont has no general obligation bonds outstanding. Demographic and Economic Information 116 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information 122 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual reports for the relevant year. Fey City of Clermont, Florida Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Business -type activities Net investment in capital assets $ 15,864 $ Fiscal Year 46,569 $ 54,834 Restricted 2006 2007 2008 2009 Governmental activities 13, 447 10,841 18,103 17,801 Net investment in capital assets $ 15,777 $ 15,825 $ 27,462 $ 33,938 Restricted 5,935 7,830 8,959 6,526 Unrestricted 8,693 14,459 11,946 13,608 Total governmental activities net position $ 30,405 $ 38,114 $ 48,367 $ 54,072 Business -type activities Net investment in capital assets $ 15,864 $ 24,837 $ 46,569 $ 54,834 Restricted 33,732 36,931 13,899 10,437 Unrestricted 13, 447 10,841 18,103 17,801 Total business -type activities net position $ 63,043 $ 72,609 $ 78,571 $ 83,072 Primary government Net investment in capital assets $ 31,641 $ 40,662 $ 74,031 $ 88,772 Restricted 39,667 44,761 22,858 16,963 Unrestricted 22,140 25,300 30,049 31,409 Total primary government net position $ 93,448 $ 110,723 $ 126,938 $ 137,144 921 Fiscal Year 2010 2011 2012 2013 2014 2015 $ 33,817 $ 34,894 $ 36,612 $ 39,950 $ 44,116 $ 47,718 6,693 7,381 8,876 9,490 9,918 9,400 13,988 12,465 9,701 7,723 5,719 11,649 $ 54,498 $ 54,740 $ 55,189 $ 57,163 $ 59,753 $ 68,767 $ 55,540 $ 56,430 $ 57,241 $ 57,863 $ 56,680 $ 56,586 17,293 9,241 9,477 9,536 10,217 12,135 11,407 19,376 20,436 24,191 27,054 26,943 $ 84,240 $ 85,047 $ 87,154 $ 91,590 $ 93,951 $ 95,664 $ 89,357 $ 91,324 $ 93,853 $ 97,813 $ 100,796 $ 104,304 23,986 16,622 18,353 19,026 20,135 21,535 25,395 31,841 30,137 31,914 32,773 38,592 $ 138,738 $ 139,787 $ 142,343 $ 148,753 $ 153,704 $ 164,431 97 City of Clermont, Florida Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Expenses Governmental activities: General government Public safety Physical environment Transportation/public works Economic environment Human services Culture and recreation Interest on long-term debt Total governmental activities expenses Business -type activities: Water Sewer Sanitation Stormwater Total business -type activities expenses Total primary government expenses Program Revenues Governmental activities: Charges for services: General government Public safety Transportation/public works Culture and recreation Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -type activities: Charges for services: Water Sewer Sanitation Stormwater Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Total primary government program revenues 3,427 Fiscal Year 3,737 3,990 2006 2007 2008 2009 $ 3,232 $ 3,297 $ 4,204 $ 4,747 7,109 8,783 10,330 10,775 382 470 514 364 1,322 1,255 1,544 1,164 181 52 48 101 77 130 107 - 1,851 2,441 2,061 2,082 285 226 459 326 14,439 16,654 19,267 19,559 3,427 2,987 3,737 3,990 4,024 3,896 4,521 4,489 1,731 1,816 2,123 2,086 316 427 549 534 9,498 9,126 10,930 11,099 $ 23,937 $ 25,780 $ 30,197 $ 30,658 $ 1,037 $ 1,116 $ 1,582 $ 1,854 1,158 1,105 975 1,203 1,566 882 761 99 523 923 1,047 921 105 2,518 7,330 3,307 4,389 6,544 11,695 7,384 $ 4,839 $ 5,502 $ 5,654 $ 4,909 3,784 4,242 4,422 4,655 2,236 2,402 2,515 2,560 689 729 766 801 11 38 700 - 6,408 3,676 1,480 2,137 17,967 16,589 15,537 15,062 $ 22,356 $ 23,133 $ 27,232 $ 22,446 m 4,316 4,461 Fiscal Year 4,154 4,589 4,823 2010 2011 2012 2013 2014 2015 $ 4,287 $ 3,643 $ 4,211 $ 3,258 $ 3,407 $ 3,848 12,459 12,531 12,168 12,685 14,117 14,326 319 279 248 303 350 453 1,768 1,661 1,719 1,725 2,202 2,094 50 102 116 200 363 567 2,055 1,822 1,045 1,928 3,096 4,018 4,316 4,461 4,052 4,154 4,589 4,823 5,927 6,022 5,752 6,106 6,437 6,571 2,169 2,364 2,567 2,465 2,472 3,133 848 955 939 897 1,016 1,080 13,260 13,802 13,310 13,622 14,514 15,607 $ 34,373 $ 33,996 $ 32,954 $ 33,808 $ 38,285 $ 41,106 $ 1,857 $ 1,695 $ 1,649 $ 2,117 $ 2,429 $ 2,356 665 355 450 1,040 1,366 1,684 872 539 604 1,262 956 1,317 1,162 1,237 1,191 896 939 1,598 134 129 27 112 1,718 498 4,690 3,955 3,921 5,427 7,408 7,453 $ 4,817 $ 5,377 $ 5,099 $ 5,215 $ 5,362 $ 5,726 4,852 5,065 5,154 5,357 5,585 5,809 2,613 2,688 2,721 2,775 2,869 2,917 829 855 855 862 881 905 - - - - - 276 1,544 999 1,752 3,430 2,417 3,219 14,655 14,984 15,581 17,639 17,114 18,852 $ 19,345 $ 18,939 $ 19,502 $ 23,066 $ 24,522 $ 26,305 BE City of Clermont, Florida Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Net (expense)/revenue Governmental activities Business -type activities Total primary government net expense General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes Business taxes Franchise fees Utility taxes Unrestricted intergovernmental revenues Unrestricted investment earnings and miscellaneous revenues Transfers Total governmental activities Business -type activities: Investment earnings Transfers Total business -type activities Total primary government Change in Net Position Fiscal Year 2006 2007 2008 2009 $ (10,050) $ (10,110) $ (7,572) $ (12,175) 8,469 7,463 4,605 3,964 $ (1,581) $(2,647) $ (2,967) $ (8,211) $ 5,665 $ 7,452 $ 7,749 $ 7,601 1,714 1,808 1,911 2,151 1,782 1,881 1,992 2,152 4,953 4,952 4,776 4,458 835 1,216 901 1,050 464 509 496 469 15,413 17,818 17,825 17,881 $ 1,968 $ 2,612 $ 1,853 $ 1,005 (464) (509) (496) (469) 1,504 2,103 1,357 536 $ 16,917 $ 19,921 $ 19,182 $ 18,417 Governmental activities $ 5,363 $ 7,708 $ 10,253 $ 5,706 Business -type activities 9,973 9,566 5,961 4,500 Total primary government $ 15,336 $ 17,274 $ 16,214 $ 10,206 *Business taxes previously reported as General Government Charges for Services **Special item loss on sale of capital assets 100 Fiscal Year 2010 2011 2012 2013 2014 2015 $ (16,422) $ (16,240) $ (15,721) $ (14,759) $ (16,363) $ (18,045) 1,395 1,182 2,271 4,018 2,600 3,245 $ (15,027) _L_( $ (13,450) $ (10,741) $ (13,763) $ (14,800) $ 6,844 $ 5,966 $ 5,535 $ 5,350 $ 6,533 $ 7,193 * 113 111 126 130 2,373 2,285 2,189 2,123 2,379 2,502 2,558 2,568 2,430 2,490 2,887 2,953 4,503 4,664 5,063 5,802 6,110 6,645 525 478 388 378 479 554 443 520 453 479 439 557 17,246 16,481 16,171 16,733 18,953 20,534 $ 360 $ 145 $ 289 $ 167 $ 200 $ (976) (443) (520) (453) (479) (439) (557) (83) (375) (164) (312) (239) (1,533) $ 17,163 $ 16,106 $ 16,007 $ 16,421 $ 18,714 $ 19,001 $ 824 $ 241 $ 450 $ 1,974 $ 2,590 $ 2,489 1,312 807 2,107 3,706 2,361 1,712 $ 2,136 $ 1,048 $ 2,557 $ 5,680 $ 4,951 $ 4,201 101 City of Clermont, Florida Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) General fund Reserved Unreserved Total general fund All other governmental funds Reserved Unreserved, reported in: Special revenue funds Capital projects fund Total all other governmental funds General fund Nonspendable Restricted Assigned Unassigned Total general fund All other governmental funds Nonspendable Restricted Assigned Unassigned Total all other governmental funds Fiscal Year 2006 2007 2008 $ 233 $ 307 $ 209 4,857 9,128 9,572 $ 5,090 $ 9,435 $ 9,781 $ 1,189 $ 1,539 $ 1,912 7,767 10,771 5,314 780 843 4,496 $ 9,736 $ 13,153 $ 11,722 Post GASB 54 2011 2012 2013 $ 335 $ 195 $ 189 175 224 257 912 1,039 765 10,048 9,744 8,878 $ 11,470 $ 11,202 $ 10,089 $ 848 $ 890 $ 939 6,359 7,763 8,295 2,854 668 - (1) $ 10,060 $ 9,321 $ 9,234 102 Fiscal Year 2009 2010 $ 214 $ 246 10,860 11,358 $ 11,074 $ 11,604 $ 2,267 $ 2,758 4,147 4,839 3,271 2,978 $ 9,685 $ 10,575 Post GASB 54 2014 2015 $ 53 $ 1,300 312 247 1,202 304 7,669 7,014 $ 9,236 $ 8,865 $ 1,064 $ 1,466 8,604 7,659 $ 9,668 $ 9,125 103 City of Clermont, Florida Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) Revenues Taxes Franchise Fees Licenses and permits Intergovernmental revenue Charges for services Fines and forfeitures Impact fees/special assessments Investment income Miscellaneous Total revenues Expenditures General government Public Safety Physical environment Transportation Economic environment Human services Culture and recreation Capital outlay Debt service Principal Interest Other charges Total expenditures Excess of revenues over (under) expenditures Other financing sources (uses) Refunding Bonds/Notes Payable Transfers in Transfers out Debt issuance Sale of capital assets Payments to refunded bond escrow agent Total other financing sources (uses) Net change in fund balances Fiscal Year 2006 2007 2008 2009 $ 10,327 $ 11,141 $ 11,652 $ 11,903 456 491 835 674 4,211 8,340 11,977 8,666 407 462 643 1,103 226 175 321 178 2,444 1,717 1,209 903 738 1,101 687 848 505 391 1,683 444 19,314 23,818 29,007 24,719 $ 2,694 $ 3,079 $ 3,640 $ 3,654 6,452 9,141 10,999 10,275 343 461 497 490 967 1,189 2,976 1,129 38 48 48 102 75 129 105 - 1,259 1,556 10,024 1,893 10,235 94 1,909 1,738 868 449 8,176 6,259 244 440 465 375 23,175 16,586 38,839 25,915 $ (3,861) $ 7,232 $ (9,832) $ (1,196) 1,676 1,265 6,468 6,684 (1,212) (756) (5,971) (6,232) 5,250 - 8,250 5,714 509 8,747 452 $ 1,853 $ 7,741 $ (1,085) $(744) Debt service as a percentage of noncapital expenditures 9.3% 7.1% * Note: Franchise Fees previously reported as Taxes. **Note: Increase in % due to refunding of 2002 bonds. Without the refunding the % would be 2.8%. 104 23.4% 28.9% Fiscal Year 2010 2011 2012 2013 2014 2015 $ 11,775 $ 10,819 $ 8,079 $ 7,951 $ 9,546 $ 10,275 * 14,844 2,188 2,123 2,379 2,502 678 528 455 884 941 788 5,733 6,059 6,310 6,729 8,796 8,772 1,036 1,013 1,011 1,085 1,212 1,312 189 186 215 172 589 757 1,131 582 679 1,909 1,401 1,858 379 148 244 108 99 131 522 612 474 622 915 1,047 21,443 19,947 19,655 21,583 25,878 27,442 $ 4,081 $ 3,272 $ 3,080 $ 3,148 $ 3,776 $ 3,600 11,212 11,625 11,352 12,579 13,571 14,844 309 275 247 307 423 744 1,620 1,472 1,340 1,263 1,635 1,635 50 102 641 722 365 564 1,878 1,792 1,769 2,014 2,948 3,725 643 1,923 2,073 2,638 9,381 2,695 493 470 490 3,080 571 884 181 162 143 122 177 198 20,467 21,093 21,135 25,873 32,847 28,889 $ 976 $ (1,146) $ (1,480) $ (4,290) $ (6,969) $ (1,447) $ $ - $ - $ 2,612 $ 6,000 $ - 2,088 3,274 1,118 3,091 9,337 3,857 (1,645) (2,776) (644) (2,612) (8,788) (3,323) 3,091 498 474 443 6,549 534 $ 1,419 $ (648) $ (1,006) $ (1,199) $ (420) $ (913) 3.6% 3.3% 3.5% 14.9% 3.5% 4.5% 105 City of Clermont, Florida Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Fiscal Property Utility Business Franchise 1,795 Year Tax Tax Tax Fees Total 2006 5,488 2,948 1,714 10,150 2007 7,155 3,138 1,808 12,101 2008 7,749 1,992 1,911 11,652 2009 7,601 2,152 2,151 11,904 2010 6,844 2,558 2,373 11,775 2011 5,966 2,568 2,285 10,819 2012 5,535 2,430 113 2,189 10,267 2013 5,350 2,490 111 2,123 10,074 2014 6,533 2,887 126 2,379 11,925 2015 7,193 2,953 130 2,502 12,778 Taxes Included in Unrestricted Intergovernmental Revenues Fiscal Sales Year Tax 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1,157 1,210 1,139 1,033 1,053 1,100 1,296 1,419 1,567 1,820 State Revenue Sharing 368 388 356 302 299 328 383 535 635 749 Local Option Gas Tax Total 286 1,811 325 1,923 300 1,795 289 1.624 322 1,674 306 1,734 296 1,975 280 2,234 290 2,492 378 2,947 * Business Tax Receipts previously reported under Licenses M. City of Clermont, Florida Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Total Estimated Assessed Year Less: Total Taxable Direct Actual Value as a Ended Real* Personal Tax Exempt Assessed Tax Taxable Percentage of Sep 30 Property Property Property Value Rate Value Actual Value 2006 1,771,503 153,086 382,885 1,541,704 3.729 1,924,589 80.11% 2007 2,466,549 171,470 620,750 2,017,269 3.729 2,638,019 76.47% 2008 2,975,139 186,835 676,371 2,485,603 3.142 3,161,974 78.61% 2009 3,022,925 195,808 792,997 2,425,736 3.142 3,218,733 75.36% 2010 2,592,111 211,950 599,821 2,204,240 3.142 2,804,061 78.61% 2011 2,171,815 209,726 598,187 1,783,354 3.142 2,381,541 74.88% 2012 2,124,017 206,870 605,114 1,725,773 3.142 2,330,887 74.04% 2013 2,185,702 205,140 611,063 1,779,779 3.142 2,390,842 74.44% 2014 2,336,882 207,024 630,762 1,913,144 3.729 2,543,906 75.20% 2015 2,574,360 215,752 652,769 2,137,343 3.729 2,790,112 76.60% Source: Lake County Property Appraisers Office * Information on breakdown of residential and commercial property is not available. 107 City of Clermont, Florida Property Tax Rates Direct and Overlapping' Governments Last Ten Fiscal YearS2 (per $1,000 of assessed value) Source: Lake County Property Appraisers Office 1 Overlapping rates are those of local and county governments that apply to property owners within the City of Clermont. z Taxes levied for the fiscal year are based on the prior year taxable value. 108 Direct Rate Overlapping Rates City of Lake South Lake St. Johns Total Clermont Lake County County Lake County River Water Direct & Fiscal Operating Operating Voted Ambulance School Hospital Water Management Overlapping Year Millage Millage Debt Service MSTU District District Authority District Rates 2006 3.7290 5.7970 0.0000 0.5289 7.9810 1.0000 0.3370 0.4620 19.8349 2007 3.7290 5.7470 0.2000 0.5289 7.6480 1.0000 0.2530 0.4620 19.5679 2008 3.1420 4.7410 0.2000 0.4651 7.6980 0.8666 0.2130 0.4158 17.7415 2009 3.1420 4.6511 0.1101 0.4651 7.5170 0.8666 0.2130 0.4158 17.3807 2010 3.1420 4.6511 0.1101 0.4651 7.5320 0.8666 0.2130 0.4158 17.3957 2011 3.1420 4.7309 0.1101 0.3853 7.5230 0.8666 0.2405 0.4158 17.4142 2012 3.1420 4.7309 0.1101 0.3853 7.3940 0.8000 0.2405 0.3313 17.1341 2013 3.1420 4.7309 0.1900 0.3853 7.3200 0.8000 0.2554 0.3313 17.1549 2014 3.7290 4.7309 0.1900 0.3853 7.1700 0.7900 0.2554 0.3283 17.5789 2015 3.7290 5.3856 0.1600 0.4629 7.2460 0.7633 0.2554 0.3164 18.3186 Source: Lake County Property Appraisers Office 1 Overlapping rates are those of local and county governments that apply to property owners within the City of Clermont. z Taxes levied for the fiscal year are based on the prior year taxable value. 108 City of Clermont, Florida Principal Property Taxpayers Current Year and Nine Years Ago (amounts expressed in thousands) 2015 2006 Percentage of Percentage of Taxable Total Taxable Taxable Total Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Adams Family LP $ 26,348 1 1.23% $ 27,391 1 1.78% Citrus Tower FL Phase I LLC 24,627 2 1.38% Centennial Citrus Tower LLC 23,942 3 1.35% South Lake Hospital, Inc. 19,657 4 1.10% Westdale Sundance LTD 18,623 5 1.05% IP9 MF Clermont LLC 17,953 6 1.01% Citrus Tower FL Phase I I LLC 15,326 7 0.86% 20,148 3 1.31% Weingarten 1-4 Clermont Landing 14,400 8 0.81% Taylor Morrison of Florida Inc 13,456 9 0.76% Living Well Lodges Clermont LLC 12,633 10 0.71% Lennar Homes Inc. 27,122 2 1.76% Sundance Clermont LLC 11,890 5 0.77% Target Corporation 9,984 9 0.65% Clermont Center LTD 10,923 6 0.71% Village at East Lake 9,860 10 0.64% Lost Lake Reserve LC 12,231 4 0.79% KB Home Orlando LLC 10,235 8 0.66% Regency Hills by Levitt & Sons LLC 10,384 7 0.67% TOTAL $186,965 10.50% $150,168 9.74% Source: Lake County Property Appraiser 109 City of Clermont, Florida Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Percentage of Levy Collected within the 73.7% Year Total Tax Fiscal Year of the Levy Collections in Ended Levy for 6,541 Percentage Subsequent September Fiscal Year Amount of Levy Years 2006 7,522 5,544 73.7% - 2007 7,518 7,155 95.2% 17 2008 7,810 7,425 95.1% 15 2009 7,622 7,243 95.0% 22 2010 6,814 6,536 95.9% 5 2011 6,001 5,698 95.0% 15 2012 5,603 5,325 95.0% 5 2013 5,422 5,153 95.0% 8 2014 6,635 6,325 95.3% 9 2015 7,133 6,793 95.2% 6 Total Collections to Date Amount Percentage of Levy 5,544 73.7% 7,172 95.4% 7,440 95.3% 7,265 95.3% 6,541 96.0% 5,713 95.2% 5,330 95.1% 5,161 95.2% 6,334 95.5% 6,799 95.3% Note: Property taxes become due and payable on November 1st of each year. A four (4) percent discount is allowed if the taxes are paid in November, with the discount declining by one (1) percent each month thereafter. Accordingly, taxes collected will never be 100 percent of the tax levy. 110 City of Clermont, Florida Ratios of Outstanding Debt by Type Last Ten Fiscal Years (amounts expressed in thousands, except per capita amount) Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. See the Schedule of Demographic and Economic Statistics on page 116 for personal income and population data. * Information is not available. 111 Business -Type Fiscal Governmental Activities Activities Year Water & Sewer Total Percentage Ended Revenue Notes Refunding Primary of Personal Sept Bonds Payable Revenue Bonds Government Income' Per Capita' 2006 5,775 5,392 17,146 28,313 5.55% 1,288 2007 5,360 5,358 16,954 27,672 5.53% 1,209 2008 4,935 5,857 16,603 27,395 3.94% 1,167 2009 4,495 38 16,232 20,765 2.89% 858 2010 4,040 - 16,016 20,056 2.76% 698 2011 3,570 15,512 19,082 2.55% 650 2012 3,080 - 14,963 18,043 2.41% 615 2013 - 2,612 14,979 17,591 2.19% 582 2014 8,041 14,361 22,402 2.74% 706 2015 7,157 13,728 20,885 2.45% 646 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. See the Schedule of Demographic and Economic Statistics on page 116 for personal income and population data. * Information is not available. 111 City of Clermont, Florida Direct and Overlapping Governmental Activities Debt September 30, 2015 (amounts expressed in thousands, except population and per capita amount) Percentage Amount Total Applicable to Applicable to Outstanding City of Clermont (1) City of Clermont Direct: City of Clermont $ 7,157 100% $ 7,157 Total Direct Debt $ 7,157 $ 7,157 Overlapping Lake County 24,255 13% 3,153 School District of Lake County - 13% - Total Overlapping Debt $ 24,255 $ 3,153 Total direct and overlapping debt payable from ad valorem taxes $ 31,412 $ 10,310 Estimated Population 32,348 Total direct and overlappinq debt per capita $ 318.73 (1) Estimates based on ratio of assessed taxable values. Note: The City of Clermont has no legal debt margin. Sources: Lake County Clerk Finance Office Lake County Property Appraiser's Office 112 Public Fiscal Service Year Taxes 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1,781,626 1,881,092 1,992,018 2,151,318 2,558,281 2,568,141 2,430,440 2,490,461 2,887,161 2,952,785 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Public Improvement Revenue Refunding Note, Series 2012 Communications Service Tax 1,163, 971 1,253,425 1,279,653 1,257,344 1,266,696 1,233,789 1,257,217 1,349,929 1,216,076 1,161,566 Half -Cent Sales Tax 1,156, 694 1,209,748 1,139,315 1,033,141 1,053,073 1,100,125 1,295,687 1,418,710 1,567,249 1,819,909 Total Revenue Available for Debt Service 4,102, 291 4,344,265 4,410,986 4,441,803 4,878,050 4,902,055 4,983,344 5,259,100 5,670,486 5,934,260 Debt Service Principal 415,000 415,000 425,000 440,000 455,000 470,000 490,000 3,080,000 570,599 577,959 Interest 222,372 228,338 209,606 195,106 179,159 161,806 143,350 66,550 25,361 19,101 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. * Public Improvement Revenue Note, Series 2002 was refunded in 2012, this includes the payoff of the original bonds. 113 Coverage 6.44 6.75 6.95 6.99 7.69 7.76 7.87 1.67 9.51 9.94 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Public Improvement Revenue Note, Series 2013 Fiscal Year Public Service Taxes 2006 - 2007 - 2008 - 2009 - 2010 - 2011 - 2012 - 2013 - 2014 2,887,161 2015 2,952,785 Communications Total Revenue Service Available for Debt Service Tax Debt Service Principal 1,216,076 1,161,566 4,103, 237 4,114,351 305,772 Interest Coverage - N/A - N/A - N/A - N/A - N/A - N/A - N/A - N/A 82,350 49.83 178,337 8.50 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 114 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements 1 Operating revenue is computed per bond resolution requirements. Investment earnings are included. z Operating expense is computed per bond resolution requirements. Depreciation expense is not included. 3Includes interest paid on the 2000 and 2009 Refunding Bonds 115 Water and Sewer Revenue and Refunding Bonds Water and Water and Sewer Sewer Net Revenue Fiscal Operating Operating Available for Debt Service Year Revenues' Expenses' Debt Service Principal Interest Coverage 2006 9,421,834 5,456,689 3,965,145 150,000 924,353 3.69 2007 12,875,170 8,820,932 4,054,238 230,000 915,802 3.54 2008 10,075,706 7,192,314 2,883,392 390,000 892,688 2.25 2009 10,561,949 6,511,487 4,050,462 410,000 883,206 3.13 3 2010 10,001,836 6,999,096 3,002,740 430,000 744,892 2.56 2011 10,561,295 7,080,592 3,480,703 535,000 660,640 2.91 2012 10,496,535 6,377,695 4,118,840 580,000 643,307 3.37 2013 10,687,908 6,677,774 4,010,134 595,000 604,811 3.34 2014 11,108, 744 7,090,566 4,018,178 615,000 586,461 3.34 2015 11,767,901 7,419,231 4,348,670 630,000 567,636 3.63 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements 1 Operating revenue is computed per bond resolution requirements. Investment earnings are included. z Operating expense is computed per bond resolution requirements. Depreciation expense is not included. 3Includes interest paid on the 2000 and 2009 Refunding Bonds 115 City of Clermont, Florida Demographic and Economic Statistics Last Ten Fiscal Years 116 Personal Education Income Level in (amounts Per Capita Years of Fiscal expressed in Personal Median Formal School Unemploy- Year Population' thousands) Income' Age' Schooling' Enrollment' ment Rate 2006 21,986 509,987 23,196 35.9 13.5 5,640 3.3% 2007 22,882 500,338 21,866 36.8 13.6 5,915 3.8% 2008 23,476 696,040 29,649 39.6 13.2 5,436 7.1% 2009 24,199 717,597 29,654 39.7 13.2 4,900 12.3% 2010 28,742 727,000 25,294 36.8 13.6 5,024 9.8% 2011 29,358 748,482 25,495 40.9 13.6 5,116 9.3% 2012 29,827 784,361 26,297 46.8 13.6 5,158 7.0% 2013 30,201 802,803 26,582 41.5 13.8 5,153 5.8% 2014 31,745 816,926 25,734 41.9 13.7 5,198 5.6% 2015 32,348 854,020 26,401 42.1 13.7 5,172 4.8% Sources: College of Business Administration, University of Florida - Bureau of Economic and Business Research z Metro Orlando Economic Development Commission 3 Lake County School Board 4 U.S. Department of Labor, Bureau of Labor Statistics Note: Unemployment rate information was only available on a countywide basis through 2009. 116 City of Clermont, Florida Principal Employers Current Year and Nine Years Ago Source: Florida Department of Economic Opportunity , Labor Market Statistics Center 117 2015 2006 Percentage of Percentage of Total City Total City Employer Employees Rank Employment Employees Rank Employment Total City Employment 14,362 7,105 South Lake Hospital, Inc. 1,436 1 10.00% 983 1 13.84% Lake County School System 856 2 5.96% 557 2 7.84% Publix Supermarkets 473 3 3.29% 349 4 4.91% Target Corporation 460 4 3.20% 265 5 3.73% Walmart 329 5 2.29% 446 3 6.28% City of Clermont 302 6 2.10% 257 6 3.62% Lowe's 250 7 1.74% Progressive Plumbing Inc. 200 8 1.39% Winn Dixie 193 9 1.34% 130 10 1.83% Home Depot 178 10 1.24% 197 7 2.77% CBS Builders Supply Inc. 142 9 2.00% Westminster Care of Clermont 160 8 2.25% TOTAL 4,677 32.57% 3,486 49.06% Source: Florida Department of Economic Opportunity , Labor Market Statistics Center 117 City of Clermont, Florida Principal Water Customers Current Year and Nine Years Ago The City of Clermont had a total metered water flow of approximately 2,521,397,000 gallons for the 12 -month period ending September 30, 2015 118 2015 2006 Usage Percentage of Usage Percentage of (thousands Total City (thousands Total City Employer of gallons) Rank Metered Flow' of gallons) Rank Metered Flow Kings Ridge 202,260 1 8.02% South Lake Hospital 37,744 2 1.50% 23,512 2 1.11% Lake County Schools 27,349 3 1.08% 25,054 1 1.18% Lennar Homes 24,290 4 0.96% City of Clermont 21,405 5 0.85% Citrus Tower FL Phase I&II LLC 20,544 6 0.81% Heritage Hills of Clermont 17,392 7 0.69% Westminster Comm Care Service 17,171 8 0.68% 15,687 3 0.74% Meritage Homes 16,687 9 0.66% Taylor Morrison of Florida 15,952 10 0.63% Osprey Ridge Apartments 10,484 4 0.49% Grandview Apartments 9,571 5 0.45% Sundance Apartments 9,384 6 0.44% Village at East Lake 8,447 7 0.40% Emerald Lakes of Clermont 7,375 8 0.35% Oakridge Apartments 6,328 9 0.30% Blue Water Express Car Wash 5,744 10 0.27% TOTAL 400,794 15.88% 121,586 5.73% The City of Clermont had a total metered water flow of approximately 2,521,397,000 gallons for the 12 -month period ending September 30, 2015 118 City of Clermont, Florida Principal Sewer Customers Current Year and Nine Years Ago The City of Clermont had a total metered water flow for wastewater billing purposes of approximately 1,105,275,000 gallons for the 12 -month period ending September 30, 2015 119 2015 2006 Usage Percentage of Usage Percentage of (thousands Total City (thousands Total City Employer of gallons) Rank Metered Flow' of gallons) Rank Metered Flow South Lake Hospital 34,998 1 3.17% 22,519 1 3.07% Lake County Schools 22,732 2 2.06% 17,919 2 2.44% Citrus Tower FL Phase I&II LLC 20,544 3 1.86% Westminster Comm Care Service 15,943 4 1.44% 13,843 3 1.89% Living Well Lodges Clermont LLC 15,754 5 1.43% Centennial Citrus Tower LLC 13,156 6 1.19% Sundance Apartments 11,650 7 1.05% 9,384 6 1.28% Village at East Lake 11,535 8 1.04% 8,447 7 1.15% Osprey Ridge Apartments 10,283 9 0.93% 10,484 4 1.43% Mister Car Wash 6,280 10 0.57% Grandview Apartments 9,571 5 1.31% Emerald Lakes of Clermont 7,375 8 1.01% Oakridge Apartments 6,328 9 0.86% Blue Water Express Car Wash 5,744 10 0.78% TOTAL 162,875 14.74% 111,614 15.22% The City of Clermont had a total metered water flow for wastewater billing purposes of approximately 1,105,275,000 gallons for the 12 -month period ending September 30, 2015 119 City of Clermont, Florida Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Full-time Equivalent Employees as of September 30, Function 2006 2007 2008 2009 General Government 27.50 30.50 30.50 31.00 Public Safety: Police Sworn personnel 45.00 51.00 53.00 53.00 Non sworn personnel 16.00 16.00 17.00 17.00 Fire Firefighters 38.00 45.00 49.00 47.85 Other personnel 2.00 2.00 2.00 2.00 Building Services 0.00 0.00 0.00 0.00 Physical Environment 10.00 10.00 10.00 11.65 Transportation 13.70 15.20 15.60 15.60 Human Services 2.00 2.00 2.00 0.00 Culture & Recreation 22.20 26.20 26.60 25.60 Water 25.40 26.90 29.40 29.40 Sewer 26.30 27.80 26.30 26.30 Stormwater 7.20 8.70 8.80 8.80 Sanitation 8.70 14.70 16.80 16.80 Total 244.00 276.00 287.00 285.00 Source: City of Clermont Finance Department. 120 Full-time Equivalent Employees as of September 30, 2010 2011 28.00 27.00 2012 25.85 2013 26.66 2014 2015 31.56 36.00 57.00 57.00 57.00 57.00 61.00 61.00 16.00 5.00 5.00 6.00 6.00 6.00 48.00 48.00 47.80 47.80 56.80 56.80 2.00 2.00 2.00 2.00 2.40 1.90 0.00 0.00 0.00 0.60 8.80 8.30 10.90 5.40 4.60 4.95 4.70 7.45 15.35 13.50 14.80 14.65 12.95 12.85 0.00 0.00 0.00 0.00 0.00 0.00 21.10 22.00 21.20 21.10 27.25 33.35 29.15 29.15 29.45 29.66 30.61 29.35 26.05 25.85 24.50 23.78 23.88 24.15 9.15 9.40 7.95 6.72 6.87 6.65 16.30 16.70 16.85 17.08 17.18 18.20 279.00 261.00 257.00 258.00 290.00 302.00 121 City of Clermont, Florida Operating Indicators by Function Last Ten Fiscal Years Fiscal Year Function 2006 2007 2008 2009 General Government Municipal boundary (square miles) 14.13 14.37 14.42 14.43 Business Tax Receipts issued 1,985 2,141 2,263 1,771 A/P Checks issued 5,664 6,023 6,440 6,042 Commercial construction (units) 38 24 42 19 Commercial construction (value in thousands) 17,534 24,433 18,859 13,223 Residential construction (units) 635 324 301 204 Residential construction (value in thousands) 186,189 136,477 56,578 56,092 Public Safety: Police Auto accidents 625 1,192 1,272 972 Physical arrests 707 933 842 949 911 calls received 7,008 6,317 6,046 6,828 Evidence processed (pieces) 1,610 1,585 1,300 1,652 Parking violations 161 140 145 107 Traffic violations 5,259 5,164 5,103 4,553 Fire Volunteer firefighters 27 9 8 10 Fire inspections completed 625 414 880 979 Emergency calls answered 3,132 3,048 3,177 3,155 Non -emergency calls answered 189 198 234 434 Human Services Animals captured** 495 652 - - Water Residential accounts 15,733 16,394 16,959 17,375 Commercial accounts 993 1,069 1,156 1,201 Annual water usage (thousands of gallons) 2,121,588 2,654,352 2,589,664 2,312,962 Sewer Residential accounts 11,125 11,554 11,913 12,154 Commercial accounts 955 1,031 1,120 1,158 Sources: Various government departments. * Data not available. ** Program was discontinued in FY 07-08 *'* Decrease in accounts due to software conversion combining122ulti-metered services 955 1,121 Fiscal Year 1,402 1,357 1,573 2010 2011 2012 2013 2014 2015 14.76 14.90 14.95 14.95 15.18 16.65 1,833 1,843 2,237 2,483 1,955 1,701 5,722 4,875 2,336 2,288 3,529 2,747 10 3 8 20 15 16 8,357 18,020 15,203 34,268 17,288 8,625 305 151 173 327 572 323 53,202 23,558 25,882 53,055 62,117 55,178 955 1,121 1,259 1,402 1,357 1,573 854 699 644 886 631 652 5,230 5,587 5,911 6,352 6,643 7,618 1,349 1,297 1,413 2,930 2,384 989 137 378 201 252 379 144 4,981 6,312 5,389 7,225 4,623 6,879 6 6 6 2,121 896 662 1,240 3,766 3,813 3,112 3,822 3,320 3,414 4,127 4,202 352 805 934 447 987 523 17,884 18,240 18,619 19,399 19,670 13,242 ** 1,206 1,210 1,207 1,232 1,234 1,211 2,054,236 2,275,936 2,391,485 2,392,022 2,406,183 2,521,397 12,508 12,722 12,936 13,407 13,718 13,578 1,158 1,167 1,166 1,194 1,055 1,074 123 City of Clermont, Florida Capital Asset Statistics by Function Last Ten Fiscal Years Sources: Various government departments * Does not include private systems 124 Fiscal Year Function 2006 2007 2008 2009 General Government Public Safety: Police Police stations 1 1 1 1 Patrol units 45 45 45 45 Fire Fire department facilities 3 3 3 3 Staffed fire stations 2 3 3 3 Fire hydrants 1,630 1,896 2,140 2,140 Fire apparatus 9 9 9 9 Staffed fire apparatus 4 5 5 5 ALS non -transport units 3 3 3 4 Transportation Streets paved (miles) 109.94 122.93 126.16 131.72 Streetlights 1,231 1,256 1,331 1,331 Culture & Recreation Number of parks 22 22 22 22 Parks acreage 349.5 349.5 349.5 349.5 Scenic linear trail (miles) 5.7 5.7 5.7 5.7 Tennis courts 8 8 9 9 Fishing piers 4 4 4 4 Boat ramp 1 1 1 1 Water Miles of water mains 104.52 115.02 115.98 122.83 Sewer Miles of sanitary sewers 49.51 56.98 59.40 65.18 Miles of storm sewers 11.13 18.07 20.88 24.61 Sources: Various government departments * Does not include private systems 124 125 Fiscal Year 2010 2011 2012 2013 2014 2015 1 1 1 1 1 1 45 46 46 55 57 79 4 4 4 4 4 3 3 3 3 3 3 3 2,012 2,016 2,048 2,120 2,146 2,200 8 7 8 8 8 12 5 5 5 5 5 3 4 4 4 4 4 3 133.20 133.20 133.20 173.91 191.52 202.38 1,352 1,352 3,103 3,103 3,127 3,158 22 23 23 23 23 23 349.5 349.5 349.5 349.5 349.5 378.0 5.7 5.7 5.7 5.7 5.7 5.7 9 9 9 9 9 9 4 4 4 5 5 10 1 1 1 1 1 1 124.11 197.40 242.36 243.14 222.75 230.28 66.19 132.02 156.81 160.42 161.25 167.60 26.32 89.80 105.38 109.05 133.70 48.22 125 cLEIRlv(ONT Choice of Champions' 126 Other Rfports cLEIRlv(ONT Choice of Champions' MCDIRMI'I /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and City Council City of Clermont, Florida We have audited, in accordance with auditing standards generally accepted in the United states of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, business -type activities, each major fund, and the aggregate remaining fund information of the City of Clermont, Florida, as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated April 26, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Clermont, Florida's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City of Clermont's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. MCDZRMIT DAVzs & COMPANY, LLC 934 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO a@MCDIRMITDAVIS.COM MEMBERS. PRIVATE COMPANIES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 127 Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Clermont's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The result of our tests disclosed no instances of noncompliance, or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Orlando, FL April 26, 2016 128 MCDIRMI'I /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 Honorable Mayor and City Council City of Clermont, Florida, Florida Compliance We have audited the compliance of City of Clermont, Florida (the City) with types of compliance requirements described in OMB CircularA-133 Compliance Supplementthat could have a direct and material effect on the City's major federal program for the year ended September 30, 2015. The City's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs is the responsibility of the City's management. Auditor's Responsibility Our responsibility is to express an opinion on compliance for the City's major federal program based on our audit of the types of compliance requirements referred to above. 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 the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination of the City's compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended September 30, 2015. MCDIRMIT DAVIS & COMPANY, LLC 934N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO a@MCDIRMITDAVIS.COM 129 MEMBERS'. PRIVATE COMPANIES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC Report on Internal Control over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Orlando, Florida April 26, 2016 130 CITY OF CLERMONT. FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended September 30, 2015 Award type Grantor Pass-through grantor CFDA Agency or Pass-through Grantor program title Number Entity Grant Number Expenditures Federal Grants United States Department of Justice Bulletproof Vest Partnership Program 16.607 2,348 passed through State of Florida, Department of Law Enforcement Edward Byrne Memorial Justice Assistance Grant (JAG) Program 16.738 2015-JAGC-LAKE-4-R1-029 6,435 Edward Byrne Memorial Justice Assistance Grant (JAG) Program 16.738 2015-JAGC-LAKE-8-R3-039 10,198 United States Department of Homeland Security FEMA Staffing for Adequate Fire and Emergency Response (SAFER) * 97.083 EMW-2013-FH-00073 534,564 United States Department of the Interior passed through State of Florida, Department of Environmental Protection Land & Water Conservation Program 15.916 LW585 and LW589 307,804 United States Department of Housing and Urban Development passed through State of Florida, Department of Economic Opportunity Small Cities Community Development Block Grant 14.228 15DB-OH-06-45-02-N44 22,274 Total federal awards $ 883,623 * Denotes a major program See accompanying Notes to Schedule of Expenditures of Federal Awards 131 CITY OF CLERMONT. FLORIDA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended September 30, 2015 Note 1 - Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the City of Clermont, Florida (the City) under programs of the federal government for the year ended September 30, 2015. The information in this Schedule is presented in accordance with the requirements of Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City. Note 2 - Summary of Significant Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Therefore, amounts reported on the Schedule are based on expenditures incurred as of September 30, 2015, even if grant or loan was received subsequent to that date. Federal expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. 132 CITY OF CLERMONT, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - FEDERAL AWARD PROGRAMS Year Ended September 30, 2015 Part A - Summary of Auditor's Results: 1. The auditor's report expresses an unqualified opinion on the financial statements of the City of Clermont, Florida (the City). 2. No significant deficiencies relating to the audit of the financial statements are reported in the Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. 3. No instances of noncompliance material to the financial statements of the City, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 4. No significant deficiencies relating to the audit of the major federal award program are reported in the Independent Auditor's Report on Compliance For Each Major Program and on Internal Control over Compliance Required By OMB Circular A-133. 5. The auditor's report on compliance for the major federal award program for the City expresses an unqualified opinion. 6. Audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133 are reported in this Schedule. 7. The program tested as a major program was the Department of Homeland Security SAFER Grant (CFDA 97.083). 8. The threshold used for distinguishing between Type A and B programs was $300,000. 9. The City did not qualify as a low-risk auditee. Part B - Findings - Financial Statement Audit: None Part C - Findings and Questioned Costs - Major Federal Award Programs: None Part D - Prior Year Audit Findings: None 133 cLEIRlv(ONT Choice of Champions' 134 MCDIRMI'I /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS MANAGEMENT LETTER Honorable Mayor and City Council City of Clermont, Florida Report on the Financial Statements We have audited the financial statements of the City of Clermont, Florida, as of and for the fiscal year ended September 30, 2015, and have issued our report thereon dated April 26, 2016. Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A- 133, Audits of States, Local Governments, and Non -Profit Organizations, and Chapter 10.550, Rules of the Florida Auditor General. Other Reports and Schedule We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; Independent Auditor's Report on Compliance for Each Major Federal Program and Report on Internal Control over Compliance; Schedule of Findings and Questioned Costs; and Independent Auditor's Report on an examination conducted in accordance with ACIPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated April 26, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i.)l., Rules of the Auditor General, require that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no recommendations in the preceding audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information has been disclosed in the notes to the financial statements. MCDZRMIT DAVzs & COMPANY, LLC 934 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO a@MCDIRMITDAVIS.COM MEMBERS. PRIVATE COMPANIES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 135 Financial Condition Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether or not the City of Clermont, Florida has met one or more of the conditions described in Section 218.503(1), Florida Statues, and identification of the specific condition(s) met. In connection with our audit, we determined that the City of Clermont, Florida did not meet any of the conditions described in Section 218.503(1), Florida Statues. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the City of Clermont, Florida's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Annual Financial Report Section 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether the annual financial report for the City of Clermont, Florida for the fiscal year ended September 30, 2015, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statues, is in agreement with the annual financial audit report for the fiscal year ended September 301 2015. In connection with our audit, we determined that these two reports were in agreement. Other Matters Section 10.554(1)(1)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of This Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the council, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. Orlando, Florida April 26, 2016 136 MCDIRMI'I /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS Honorable Mayor and City Council City of Clermont, Florida We have audited the financial statements of City of Clermont as of and for the year ended September 30, 2015, and have issued our report thereon dated April 26, 2016. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated July 14, 2011, our responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of City of Clermont solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence. MCDZRMIT DAVzs & COMPANY, LLC 934 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO a@MCDIRMITDAVIS.COM MEMBERS. PRIVATE COMPANIES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 137 Qualitative Aspects of the Entity's Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by City of Clermont is included in Note 1 to the financial statements. As described in Note 1 to the financial statements, during the year, City of Clermont changed accounting policies related to the adoption of Statement of Governmental Accounting Standards (GASB Statement) No. 68, Accounting and Financial Reporting for Pension Plans and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. Accordingly, the cumulative effect of the accounting change as of the beginning of the year has been reported in the Statement of Activities. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements are: Management's estimate for the allowance for doubtful accounts is based on historical loss levels, and an analysis of the individual accounts. We evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. Management's estimation for the allowance for depreciation is based on the estimated useful lives of the capital assets. We evaluated the reasonableness of the useful lives as well as the depreciation methods in determining that it is reasonable in relation to the financial statements taken as a whole. Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting City of Clermont, Florida's financial statements relate to revenue recognition as described in Note 1. Significant Difficulties Encountered During the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. 138 Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to City of Clermont, Florida's financial statements or the auditor's report. No such disagreements arose during the course of the audit. Representations Requested from Management We have requested certain written representations from management, which are included in the management representation letter dated April 26, 2016. Management's Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with City of Clermont, Florida , we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as City of Clermont, Florida's auditors. This report is intended solely for the use of management, the City Council and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, Orlando, Florida April 26, 2016 139 cLEIRlv(ONT Choice of Champions' 140 MCDIRMIT %/i DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES The Honorable Mayor and City Council City of Clermont, Florida We have examined City of Clermont, Florida's (the City) compliance with the requirements of Section 218.415, Florida Statutes, during the year ended September 30, 2015. Management is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on the City's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City's compliance with specified requirements. In our opinion, City of Clermont, Florida complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2015. �� C6►,�yo� u� Orlando, Florida April 26, 2016 MCDIRMIT DAVIS & COMPANY, LLC 934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO@MCDIRMITDAVIS.COM MEMBERS: PRIVATE COMPANIES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC 141 cLEIRlv(ONT Choice of Champions' 142