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Comprehensive Annual Financial Report - 2020-2021Av7eWOscj i � YL �� k. . � �. fir. l&• y� f� �.. . „ 1. ' �, �` , �•'�f�.9 A A3 S :� � F ,;T �� � lr �ro w +d`� a vy��^+f ; a .� �''+r' Yr%^:t �'C� er 'fir 4�. �'�' � •,,• �,; , a 1 ' i 1� �- CLERWONT Choice of Champion` Downtown Streetscape Phase 1 Downtown Streetscape is the final project in the City of Clermont's Downtown Master Plan that was adopted and rolled out in 2015. • b- The project was designed to enhance the look of Downtown Clermont by replacing the existing asphalt on three streets with brick pavers. The scope of the work was extended to include upgrading underground utilities, increasing lighting, adding event power, enhancing landscape and adjusting parking. The $12-million project was scheduled to be constructed in three phases to minimize inconveniences to businesses, customers and visitors, keep traffic flowing, facilitate parking and maintain fire protection during construction. Phase 1 featured improvements to West Avenue and Osceola Street and brick pavers were installed on Osceola Street between 7th Street and West Avenue. The work was completed in the fall of 2021. •• U. I ♦% CITY OF CLERMONT FLORIDA Annual Comprehensive Financial Report For The Year Ended September 30, 2021 Ne ONT�CLEF _�oice of Champio Prepared by: Finance Department n City of Clermont, Florida Table of Contents Page Introductory Section Letter of Transmittal 3 GFOA Certificate ofAchievementfor Excellence in Financial Reporting 8 Organization Chart 9 List of Elected and Appointed Officials 10 Financial Section Independent Auditor's Report 13 Management's Discussion and Analysis 17 Basic Financial Statements: Government -Wide Financial Statements: Statement of Net Position 29 Statement of Activities 30 Fund -Financial Statements: Balance Sheet- Governmental Funds 31 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds 32 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 33 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 34 Statement of Revenues, Expenditures, and Cahnges in Fund Balance - Budget and Actual - Infrastructure Special Revenue Fund 37 StatementofNetPosition - Proprietary Funds 38 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds 41 Statement of Cash Flows - Proprietary Funds 42 Statementof Fiduciary Net Position - Fiduciary Funds 44 Statementof Changes in Fiduciary Net Position - Fiduciary Funds 45 Notes to the Financial Statements 49 Required Supplementary Information: Schedule of Changes in Net OPEB Liability and Related Ratios 85 Schedule of Changes in Net Pension Liability and Related Ratios - General Employees 86 Schedule of Changes in Net Pension Liability and Related Ratios - Police 87 Schedule of Changes in Net Pension Liability and Related Ratios - Fire 88 Schedule of Contributions and Investment Returns - General Employees 89 Schedule of Contributions and Investment Returns - Police 90 Schedule of Contributions and Investrnent Returns - Fire 91 Combining and Individual Fund Statements and Schedules: Major Governmental Funds Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Capital Projects Fund 96 Nonmajor Governmental Funds Combining Balance Sheet- Other Governmental Funds 98 Combining Statementof Revenues, Expenditures, and Changes in Fund Balance - Other Governmental Funds 100 City of Clermont, Florida Table of Contents Page Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Recreation Impact Fee Special Revenue Fund 102 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Police Impact Fee Special Revenue Fund 103 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Fire Impact Fee Special Revenue Fund 104 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Building Services Special Revenue Fund 105 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Community Redevelopment Special Revenue Fund 106 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Cemetery Special Revenue Fund 107 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - ARPA Special Revenue Fund 108 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Debt Service Fund 109 Fiduciary Funds Combining Statement of Fiduciary Net Position - Fiduciary Funds 111 Combining Statement of Changes in Fiduciary Net Position - Fiduciary Funds 112 Statistical Section Financial Trends: Net Position by Component 116 Changes in Net Position 118 Fund Balance - Governmental Funds 122 Changes in Fund Balances - Governmental Funds 124 Revenue Capacity: Governmental Activities Tax Revenues by Source 126 Assessed Value and Estimated Actual Value of Taxable Property 127 Property Tax Rates - Direct and Overlapping Governments 128 Principal Property Taxpayers 129 Property Tax Levies and Collections 130 Debt Capacity: Ratios of Outstanding Debt by Type 131 Direct and Overlapping Governmental Activities by Debt 132 Pledged -Revenue Coverage 133 Demographic and Economic Information: Demographic and Economic Statistics 138 Principal Employers 139 Principal Water Customers 140 Principal Sewer Customers 141 Operating Information: Full-time Equivalent City Government Employees by Function 142 Operating Indicators by Function 144 Capital Asset Statistics by Function 146 City of Clermont, Florida Table of Contents Page Other Reports Independent Auditor's Reporton 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 151 Independent Auditor's Reporton Compliance for Each Major Federal Proram and Reporton Internal Control Over Compliance in Accordance with the Uniform Guidance 153 Schedule of Expenditures of Federal Awards 155 Notes to Schedule of Expenditures of Federal Awards 156 Schedule of Findings and Questioned Costs 157 Management Letter 158 Independent Auditor's Report on Compliance with the Requirements of Section 218.415, Florida Statutes 160 n INTRODUCTORY SECTION Page11 n Page 12 f ALE Choice of Champions - April 21, 2023 Honorable Mayor Tim Murry, Council Members and Citizens of the City of Clermont, Florida BRIAN M. BULTHUIS CITY MANAGER 352-241-7358 BBulthuis@Clermontfl.org Dear Mayor Murry, Council Members and the Citizens of the City of Clermont, Florida: We are pleased to present the Annual Comprehensive Financial Report (ACFR) of the City of Clermont, Florida, for the fiscal year ended September 30, 2021. State law requires that every general-purpose local government publish 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, 2021. 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 Generally Accepted Accounting Principles in the United States of America (GAAP). Because the cost of internal controls should not exceed anticipated benefits, the City of Clermont's comprehensive framework of internal controls 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, 2021 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, 2021 are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. Management Discussion and Analysis (MD&A) immediately follows the independent auditor's report and provides narrative introduction, overview and analysis of the basic financial statements. The MD&A provides "financial highlights" and interprets the financial reports by analyzing trends and by explaining changes, fluctuations and variances in the financial data. In addition, the MD&A is intended to disclose 685 W. Montrose Street • Clermont, FL 34711 . www.ClermontFL.gov Page13 any known significant events or decisions that affect the financial condition of the City. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. Profile of the City of Clermont The City was founded in 1884 and incorporated in 1916. The City currently has a land area of 19.2 square miles and a population of approximately 44,687. 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, which 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 that flows north. The lakes offer residents the opportunity for excellent fishing, boating, swimming and other water sports, including competitive rowing, skiing and wakeboarding offered by world -class instructional schools. The City of Clermont is known for its scenic beauty, relaxed lifestyle, recreational facilities and temperate climate. Residents have a wide variety of housing and property -ownership opportunities, including lakefront and lake -access property, golf -course communities, homes in existing neighborhoods, residential retirement communities and new subdivisions. The City of Clermont provides a full range of services as directed by its charter. These include police and fire protection, street 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 Manager. The City Manager is responsible for carrying out the policies and ordinances of the governing body, overseeing the day-to-day operations of the government and hiring the directors of the various departments. The annual budget serves as the foundation for the City of Clermont's financial planning and control. All departments of the City of Clermont are required to submit requests for appropriations to the City Manager. The City Manager then uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the Council for review. The City Council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than September 30, the close of the City of Clermont's fiscal year. The appropriated budget is prepared by fund (e.g. general fund), and department (e.g. police 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 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 Page14 Local Economy The City of Clermont is essentially residential in character and its economy is centered in retail, real estate, personal services and healthcare. During the last 5 years, Clermont's population has increased by 8,880 residents or 24.80%. Clermont's economic factors for FY 2021 indicated recovery of impacts from the pandemic in both unemployment and per capita personal income levels, both of these areas have moved in a favorable direction. The per capita personal income levels have increased $1,113 or 3.7% over the last 5 years. The City's unemployment rate also has increased from 3.1 % to 3.7% over the last 5 years, this rate continues to be below the county, state and national averages. Educational institutions in Clermont, such as Lake -Sumter State College, St. Leo University and the University of Central Florida, assist in supplying a skilled labor force. One of the highlighted areas of change has been the increase in property values; this year had a 9.98% increase in taxable property values. Primarily due to this increase in property values, Clermont's property tax-millage rate of 4.2061 continues to be among the lowest of other comparable cities in the Central Florida region. The cost of living for the region is below the national average. There is no personal income tax, either locally or statewide. Sales tax, currently at 7%, is not charged on food or medicine. One cent of the sales tax charged within the county is limited to $50 per transaction (1 % of $5,000). As discussed in the MD&A, this additional penny sales tax must be used for infrastructure including roads, buildings, land, land improvements and certain equipment. Long-term Financial Planning The City uses an extensive water and sewer master plan to manage growth in the water and sewer utility systems. The plan outlines water and sewer line size requirements for planned development with rough cost estimates. The plan also has benchmarks for plant expansions and additional well requirements. The Clermont City Council and management, through careful short- and long-range planning and sound management practices, are committed to budgeting and managing all resources in the most cost- effective manner. The City adopts a Five -Year Capital Plan as part of the annual budget process. The Capital Plan is a multi -year prioritized schedule that identifies future capital outlay by the year it is intended to be purchased or commenced, the amount to be spent per year, and the funding source. Relevant Financial Policies The City regularly reviews revenues and expenditures throughout the fiscal year. Quarterly budget reports are prepared and presented to the City Council. The reports show budget -to -actual for the city's top 10 revenues, total fund revenues, total fund expenditures, departmental expenditures and various department performance indicators. Through this process, if actual revenues are expected to fall short of the budgeted amount, expenditures are reduced to ensure that a shortage of funds or a significant use of fund balance does not occur. 685 W. Montrose Street • Clermont, FL 34711 * www.ClermontFL.gov Page15 Major Initiatives The completion of several capital projects included in the award -winning Downtown Waterfront Master Plan continues to be the major emphasis of the City. The Master Plan offers an exciting view of the future of Clermont and how to protect the very charms that have drawn hundreds of thousands to this internationally recognized city that is one of the nation's top places to live, as well as a training ground for the world's elite athletes. The following capital projects are included in the Master Plan and are expected to be completed within the next two years. The listed projects below are being funded primarily from several grants and a loan. It is important to note that no General Fund reserves are being used to fund the construction of these projects. The Downtown Waterfront District area includes Montrose Street, Minneola Street and Osceola Street between 7th and 8th streets. The proposed improvements consist of streetscapes, landscaping, bathrooms, lighting, upgrades for event lighting and music, banners and beautification. A focal point will be created at City Hall Park to anchor downtown visitors, creating a destination and meeting point in the heart of downtown Clermont. In addition, the city plans to demarcate the halfway point of the Coast -to -Coast Trail. Phase one of the project was completed in 2021. Phase two of the project is under construction with expected completion in 2022. Phase three design is underway with construction starting in 2022. The total project is anticipated to cost approximately $17 million. • The Public Services Facility Relocation project involves the expansion and relocation of the existing antiquated facility. The new facility is proposed to be relocated to the Hancock Road corridor, an area that will allow for a larger, more centralized Public Services Facility. The land acquisition has been completed and is currently in the final design phase with bidding and construction to follow. The project is anticipated to cost approximately $12 million. In addition to the Master Plan projects there is a major Utility Projects underway. The Wastewater Treatment Facility Expansion project is required in order to meet the increased demand generated within the service area. The project is currently in the design phase to take the facility from the existing permitted capacity of 4 MGD to 6.5 MGD with the design portion anticipated to be complete in late 2022 followed by construction starting during the spring of 2023. This project will not only allow the facility to maintain regulatory compliance, it will also allow the City to continue the history of responsibly utilizing water resources by expanding the volume of effluent that can be produced for public access reuse. This project has an estimated cost of $50 million. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Clermont for its comprehensive annual financial report for the fiscal year ended September 30, 2020. This was the 33rd consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. 685 W. Montrose Street • Clermont, FL 34711 www.ClermontFL.gov Page16 A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Credit must be given to the Mayor and the City Council for their support in maintaining the highest standards of professionalism in the management of the City of Clermont's finances. The preparation of this report would not have been possible without the efficient and dedicated services of the staff in the City Manager's Office and Finance Department. We would like to express our appreciation to all members of these departments who assisted and contributed to the preparation of this report. Respectfully submitted, Brian M. Bulthuis Pamela M. Brosonski City Manager Finance Director 685 W. Montrose Street . Clermont, FL 34711 www.ClermontFL.gov Page17 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Clermont Florida For its Annual Comprehensive Financial Report For the Fiscal Year Ended September 30, 2020 Executive Director/CEO Page18 Citizens of Clermont City Council City Attorney City Manager Economic Development Building cl Finance re Human esourcE Committees Public Information Parks and Recreation Planning and Development Police Public Service Information Technology Procuremen k Services City of Clermont, Florida List of Elected and Appointed Officials For the Fiscal Year Ended September 30, 2021 Elected Officials Tim Murray Mayor Timothy Bates Mayor Pro- Tem Ebo Entsuah Council Member Appointed Officials Scott Davidoff Acting City Manager Vacant Assistant City Manager Dan Mantzaris City Attorney Tracy Ackroyd Howe City Clerk Vacant Communications Director Lisa Widican Building Services Director Curt Henschel Planning & Development Services Director Pam Brosonski Finance Director Jim Purvis Council Member Michele Pines Council Member David Ezell Fire Chief Nadine Ohlinger Human Resources Director Wayne Fountain Interim Information Technology Director Chris Dudeck Interim Parks and Recreation Director Charles Broadway Police Chief Stoney Brunson Public Works Director Freddy Suarez Purchasing Director Page110 FINANCIAL SECTION Page111 n Page112 I 1 McDirmit Davis I MJ INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Clermont, Florida 934 North Magnolia Avenue, Suite 100 Orlando, Florida 32803 407-843-5406 www.mcdirmitdavis.com Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, 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, 2021, 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, 2021, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund, and Infrastructure Special Revenue Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. the trusted partner Page113 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the pension and other postemployment benefits disclosures on page 17 through 26 and 85 through 91 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 ClermonYs basic financial statements. The introductory section, combining and individual fund financial statements and schedules, statistical section and the Schedule of Expenditures of Federal Awards (the Schedule) as required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), 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 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. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated April 21, 2023 on our consideration of City of ClermonYs internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Clermont's internal control over financial reporting and compliance. Orlando, FL April 21, 2023 Page114 MANAGEMENT'S DISCUSSION AND ANALYSIS Page 115 n Page116 City of Clermont, Florida 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, 2021. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3 through 7 of this report. Financial Highlights • The City of Clermont's assets and deferred outflows of resources exceeded its liabilities and deferred inflows at September 30, 2021 by $230,847,935 (net position). Of this amount, $50,402,090 (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 $29,216,110 (or 14%) during fiscal year 2021 primarily due to an increase in total revenues. The most significant revenue factor is within "Capital Grants and Contributions" for business -type activities, which increased from $6.61VI in FY20 to $22.1 M in FY21. This is largely due to the dedication of infrastructure to the City by developers. • At September 30, 2021, the City of Clermont's governmental funds reported combined ending fund balances of $39,586,254 an increase of $188,843 from the previous fiscal year. Of this amount $11,616,852 (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 $11,616,852, which represents 33.9% 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 29 and 30 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 environment, and culture and recreation. The business -type activities of the City of Clermont include water, sewer, sanitation, and stormwater utilities. The government -wide financial statements include only the City of Clermont itself (known as the primary government) and one blended component unit (The City of Clermont Community Redevelopment Trust Fund). Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Clermont, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of Clermont can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Page117 City of Clermont, Florida Management's Discussion and Analysis Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near - term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Clermont maintains eleven individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Capital Projects Fund, and Infrastructure Fund, which are considered to be major funds. Data from the other eight governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City of Clermont adopts an annual appropriated budget for all of its governmental funds. Budgetary comparison statements have been provided for the General Fund (pages 34 - 35), and the Infrastructure Fund (page 37) to demonstrate compliance with budgets. Other major and nonmajor funds comparisons can be found beginning on page 96. The basic governmental fund financial statements can be found on pages 31 - 37 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 38 - 43 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, sanitation, and stormwater which are all considered to be major funds. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City of Clermont's own programs. The accounting used for fiduciary funds is much like that used for the proprietary funds. The basic fiduciary fund financial statements can be found on pages 44 - 45 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 49 - 81 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 96 - 112 of this report. Page118 City of Clermont, Florida Management's Discussion and Analysis 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. Net Position Governmental Activities Business -type Activities 2020.21 2019-20 2020.21 2019-20 Assets: Current and other assets $55,105,444 $48,259,851 $ 61,898,408 $ 59,233,295 Capital assets 79,192,866 73,844,788 100,421,095 82,418,678 Total assets 134,298,310 122,104,639 162,319,503 141,651,973 Deferred Outflows of Resources: Deferred outflow of pension and OPEB earnings 5,199,860 5,838,788 445,423 544,970 Deferred charge of refunding - - 726,167 806,851 Total deferred outflows of resources 5,199,860 5,838,788 1,171,590 1,351,821 Liabilities: Long-term liabilities outstanding 39,344,826 40,889,219 Other liabilities 4,439,101 3,469,782 Total liabilities 43,783,927 44,359,001 Deferred Inflow of Resources: Deferred inflow of pension and OPEB earnings 7,361,151 3,185,495 Net investment in capital assets 51,595,557 44,045,257 Restricted 14,910,765 12,479,307 Unrestricted 21,846,770 23,874,367 Total net position $ 88,353,092 $ 80,398,931 18,748,695 19,750,335 2,175,846 1,927,617 20,924,541 21,677,952 Total 2020.21 2019.20 $117,003,852 $107,493,146 179,613, 961 156, 263,466 296,617,813 263,756,612 5,645,283 6,383,758 726,167 806,851 6,371,450 7,190,609 58,093,521 60,639,554 6,614,947 5,397,399 64,708,468 66,036,953 71,709 92,948 7,432,860 3,278,443 88,519,639 68,309,917 25,419,884 24,194,900 28,555,320 28,728,077 $142,494,843 $121,232,894 140,115,196 112,355,174 40,330,649 36,674,207 50,402,090 52,602,444 $ 230,847,935 $ 201,631,825 The City's total net position at September 30, 2021 was $230,847,935.Of the City's total net position $140,115,196 (60.7%) 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, $40,330,649 (17.5%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of the City's total net position, $50,402,090 (21.8%) 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 $29,216,110 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 2020-21, including revenues and expenses, with a comparison to the prior year. For more detail see the Statement of Activities. Page119 City of Clermont, Florida Management's Discussion and Analysis Changes in Net Position Governmental Activities Business -type Activities Total 2020-21 2019-20 2020-21 2019-20 2020.21 2019-20 Revenues: Program revenues - Chargesforservices $ 8,346,718 $ 7,319,562 $ 22,107,572 $ 20,461,143 $ 30,454,290 $ 27,780,705 Operating grants and contributions 2,025,523 3,307,146 - 583 2,025,523 3,307,729 Capital grants and contributions 2,205,531 625,000 22,093,775 6,574,550 24,299,306 7,199,550 General revenues - Property Taxes 14,353,854 13,089,628 - - 14,353,854 13,089,628 Business Taxes 143,984 161,849 143,984 161,849 Franchise Fees 3,360,139 3,202,523 3,360,139 3,202,523 Utility Taxes 4,466,642 4,201,714 4,466,642 4,201,714 Intergovernmental 9,969,074 8,403,161 - - 9,969,074 8,403,161 Investment income and miscellaneous 791,253 1,255,270 106,161 953,526 897,414 2,208,796 Gain on sale of capital assets - - 40,066 28,679 40,066 28,679 Total revenues 45,662,718 41,565,853 44,347,574 28,018,481 90,010,292 69,584,334 Expenses: General government 5,918,171 5,677,795 - - 5,918,171 5,677,795 Public safety 23,712,850 22,732,773 23,712,850 22,732,773 Physical environment 2,763,287 2,470,157 2,763,287 2,470,157 Transportation 2,264,129 1,843,193 2,264,129 1,843,193 Economic environment 665,094 846,818 665,094 846,818 Culture and recreation 4,044,169 3,722,518 4,044,169 3,722,518 Interest on long-term debt 686,929 752,672 686,929 752,672 Water - - 7,109,563 6,424,688 7,109,563 6,424,688 Sewer 8,172,055 7,741,759 8,172,055 7,741,759 Sanitation 3,467,370 3,293,726 3,467,370 3,293,726 Stormwater - - 1,990,565 1,900,908 1,990,565 1,900,908 Total expenses 40,054,629 38,045,926 20,739,553 19,361,081 60,794,182 57,407,007 Increase (Decrease) in Net Position Before Transfers 5,608,089 3,519,927 23,608,021 8,657,400 29,216,110 12,177,327 Transfers 2,346,072 2,177,240 (2,346,072) (2,177,240) - - Increase in Net Position 7,954,161 5,697,167 21,261,949 6,480,160 29,216,110 12,177,327 NetPosition- Beginning 80,398,931 74,701,764 121,232,894 114,752,734 201,631,825 189,454,498 NetPosition- Ending $88,353,092 $80,398,931 $142,494,843 $121,232,894 $230,847,935 $201,631,825 Governmental Activities Governmental activities increased the City of Clermont's net position by $7,954,161. The increase in governmental activity net position is due to the growth of revenues exceeding growth in expenses. While revenues increased 9.9% to $45.6 million, expenses increased at a 5.3% rate to $40.1 million. Revenues growth is primarily due to additional residents, increasing property valuations, and higher retail activity as opposed to rate increases. For instance, the Total Taxable Assessed Value of property increased 9.9% or $311 million in FY21, while the city's millage rate remained the same. This led to an increase in receipts of nearly $1.3 million. In another example, intergovernmental revenues - such as sales tax and state revenue sharing - increased by $1.5 million. Page 120 City of Clermont, Florida Management's Discussion and Analysis The intergovernmental revenues category was also partially impacted by increases in some state revenues, as FY2020 had lower amounts due to the COVID pandemic. Similarly, a portion of the increase in "Charges for Services" within governmental activities can be attributed to the return of revenue from recreation rental and performing arts show revenues post-COVID, as the facilities were closed during a part of FY2020, 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. $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Expenses and Program Revenues - Governmental Activities generaInteres l government Public Safety Transportation/public woirkse & recreation Physical environment and oth on bng_term debt er The following pie chart illustrates the composition of governmental activities revenue and its percent in relation to total governmental activities revenues. Revenues by Source - Governmental Activities ■ Intergovernmental ■ Charges for services Operating grants and contributions ■ Investment income and miscellaneous ■ Other taxes Capital grants and contributions Property taxes Property taxes, 31.z Capital grants and contributions, 4.8% Other taxes, 17 v Nciaung gianw aiiu miscellaneous, 1.7% contributions, 4.4% Intergovernmental, 21.8% -ges for services, 18.3 Page 121 City of Clermont, Florida Management's Discussion and Analysis Business -Type Activities Business -type activities increased the City of Clermont's net position by $21,261,949. This change is primarily due to increased revenue from services, and capital contributions. 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. $20,000,000 $18, 000,000 $16, 000,000 $14,000,000 $12,000,000 $10, 000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Expenses and Program Revenues - Business Type Activities Water Sewer Sanitation Stormwater The following pie chart illustrates the composition of business -type activities revenue and its percent in relation to total business -type activities revenues. Revenues by Source - Business Activities ■ Investment income and miscellaneous ■ Operating grants and contributions ❑ Charges for Services ■ Capital Grants and Contributions Capital Grants and Contributions, 49.8% L Charges for Services, 49.9% Investment income and miscellaneous , 0.3% Operating grants and contributions, 0.0% Page 122 City of Clermont, Florida Management's Discussion and Analysis 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, 2021, the City of Clermont's governmental funds reported combined ending fund balances of $39,586,254 an increase of $188,843 in comparison with the prior year. This increase is primarily due to impact fee collections tied to new development in the City. Of the governmental funds combined ending fund balances, $11,616,852 (29%) represents unassigned fund balance, which is available for spending at the City's discretion. An additional $12,605,324 (assigned fund balance) has been set aside for planned master plan project expenditures. Restricted fund balances totaling over $14.9 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 ($466,608) to indicate that it is not available for spending because it has already been committed for prepaids and inventories. The General Fund is the chief operating fund of the City of Clermont. As of September 30, 2021, the fund balance in the General Fund was $13,908,158 an increase of $2,106,698 primarily from an increase in revenues; property taxes, franchise fees, licenses and permits, and charges for services all surpassed the 2020 amounts. The change in fund balance was more than the anticipated amount of the original budget by $3,986,837 and $5,170,243 more than the revised budget. Revenues were more than budgeted by $3,697,400, due to increases in intergovernmental, this was due to lower state projection on sales and gas taxes based on the declines from COVID-19 in the prior year. Departmental expenditures came in less than anticipated resulting in no use of reserves in 2021. Of the total fund balance in the General Fund, $11,616,852 (83.5%) 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 33.9% 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 fund balance in this fund decreased by $4,260,323 in fiscal year 2021, primarily due to spending of proceeds from the Master Plan Capital Projects Revenue Note. The most significant project was the spending of $4.4 million on a streetscape project in the downtown corridor. 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 $762,024 in fiscal year 2021 primarily due to increases in sales tax collections over the expectations and reduced expenditures of equipment and vehicle purchases due to delays on the delivery of these items. The remainder of the change of $1,580,444 to the governmental fund balance was from the non -major governmental funds. Recreation, Police and Fire Impact Fee fund balances combined for an increase of $1,269,322 in fiscal year 2021 primarily due to the collection of impact fees on new development within the City. The Building Services fund balance increased $161,106 due to revenues exceeding expenditures. The fund balances in the remaining nonmajor funds increased a total of $80,131 due to an increase in both the cemetery and debt service funds. Proprietary Funds Proprietary funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The City's major proprietary funds are water, sewer, sanitation and stormwater. Page 123 City of Clermont, Florida Management's Discussion and Analysis 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, 2021, the City of Clermont's Water Fund reported total net position of $50,697,127, an increase of $6,229,388 in comparison with the prior year. This increase in net position was due to revenues exceeding expenses as well as the capital contributions of water impact fees on new development in the City. 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, 2021, the City of Clermont's Sewer Fund reported total net position of $73,341,938, an increase of $10,213,480 in comparison with the prior year. This increase in net position was primarily due to the capital contributions of sewer impact fees on new development in the City. 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, 2021, the City of Clermont's Sanitation Fund reported total net position of $6,698,903, an increase of $395,768 in comparison with the prior year. This increase in net position is due to net operating income. The Stormwater Fund accounts for the management of the City's stormwater drainage system. All activities necessary to the provision of these services are accounted for in this fund. As of September 30, 2021, the City of Clermont's Stormwater Fund reported total net position of $11,993,886, an increase of $4,611,728 in comparison with the prior year. The decrease in net position is primarily due to increased costs for personnel and other operating expenditures. General Fund Budgetary Highlights During the year, there was a $2,350,287 increase in appropriations between the original and final amended budget. Significant components of the increase are as follows: • $74,400 Carryover of unexpended FY20 funds for HVAC replacements. • $194,217 for Lake Hiawatha pier replacement project. • $53,000 for Fire Department fitness and air fill station equipment. • $911,060 for Inter -local Agreement for disbursement of CARES Act Funds. • $353,500 for Land and Professional Services related to Trapp land purchase. • $150,425 for Land and Professional Services related to Campbell land purchase. • $140,452 for Fire Station #1 roof replacement. In addition, General Fund budgeted revenues increased by $1,166,851 between the original and final budget. Significant components of the increase are as follows: • $194,217 Addition of Federal Grant for Lake Hiawatha pier replacement project. • $80,000 for Fire Department fitness and air fill station equipment & related FEMA assistance. • $150,425 Inter -Fund Transfer for the Campbell land purchase. • $205,814 to account for Water & Sewer Fund transfers based on actual sales. • $139,452 Florida Municipal Insurance Trust reimbursement of Fire Station #1 roof replacement. Considering the above noted increases in General Fund budgeted appropriations, actual expenditures were less than budgeted by $1,954,507. Page 124 City of Clermont, Florida Management's Discussion and Analysis Capital Assets The following is a summary of the City of Clermont's capital assets, net of depreciation for governmental and business -type activities for the current year with a comparison to the prior year. Additional information on the City of Clermont's capital assets can be found in Note 6 of this report. Capital Assets (net of depreciation) Governmental Activities Business -type Activities Total 2020-21 2019-20 2020-21 2019-20 2020-21 2019-20 Land $ 25,851,030 $ 25,345,300 $ 1,511,807 $ 1,511,807 $ 27,362,837 $ 26,857,107 Buildings 18,353,736 19,052,904 835,845 873,451 19,189,581 19,926,355 Infrastructure 24,062,230 17,444,678 82,856,729 67,425,101 106,918,959 84,869,779 Machinery and Equipment 6,750,161 6,340,602 5,333,990 5,166,510 12,084,151 11,507,112 Intangibles 70,369 92,403 193,901 188,435 264,270 280,838 Construction in Progress 4,105,340 5,568,901 9,688,823 7,253,374 13,794,163 12,822,275 Total $ 79,192,866 $ 73,844,788 $100,421,095 $ 82,418,678 $179,613,961 $156,263,466 The City of Clermont's investment in capital assets for its governmental and business -type activities as of September 30, 2021, amounts to $179,613,961 (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 $23,350,495. Following are the significant capital asset events that occurred during the current fiscal year: • Completion of Phase 1 of the Streetscape Project, $1,347,772 was added and prior year's Construction in Progress in the amount of $3,977,603 was moved to Infrastructure for a total project cost of $5,325,375. • Completion of the Artwalk Project, $26,048 was added and prior year's Construction in Progress of $341,678 was added to Infrastructure for a total project cost of $367, 726. • Completion of the CDBG-WTR SYS, $1,023,756 was added and prior year's Construction in Progress in the amount of $107,421 was moved to Infrastructure for a total project cost of $1,131,177. • Addition of Crestview Roadway Phase 1 & 2 for $1,955,531. • Two property (land) additions totaling $503,881. • Purchase of a Street Sweeper $249,632. • Purchase of 8 police vehicles for a total of $425,956. • Purchase of 60 Bodywork Camera and Holsters for the Police Department $220,250. • Purchase of 60 Self Contained Breathing Apparatus Packs & Accessories $368,778. • Purchase of a Vacuum Truck for $418,645. • Addition of sanitary, reclaimed, and storm water lines in Crestview totaling $2,576,570. • Addition of sanitary, reclaimed, and storm water lines in Highland Ranch totaling $1,776,741. • Addition of sanitary, reclaimed, and storm water lines in Hartwood Landing totaling $2,798,832. • Lift station additions totaling $1,428,771. • Additions to storm sewer and reclaimed lines in Lakeview totaling $2,691,540. • Construction in progress as of September 30, 2021 includes ARC Storage Building, Fire Station #2 Expansion, Streetscape PH 1 & PH2, Meet us in the Middle, Montrose St Improvements, Lake Hiawatha Pier Replacement, PW Hancock Facility, John's Lake Water Main Replacement, West Side Water Loop PH2, Sunburst WTP Barrier Wall, Asset Mgt Software, VT SCADA Conversion, John's Lake Rd Reuse, East WW Plant, Lower Floridian Aquifer Exploratory, Cap Out -Water System, WWTF Expansion, Clermont Eastern Water Reclamation Facility Expansion, Wellness Way, SW Master Plan — Lake Minnehaha, Lake Winona Basin Drainage, PW Facility. Page 125 City of Clermont, Florida Management's Discussion and Analysis 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 of this report. Outstanding Debt Governmental Activities Business -type Activities Total 2020-21 2019-20 2020-21 2019-20 2020-21 2019-20 Revenue bonds payable $ - $ - $ 9,779,000 $ 10,634,000 $ 9,779,000 $ 10,634,000 Notes payable 26,931,061 29,045,267 5,252,560 5,620,934 32,183,621 34,666,201 Capital leases 666,248 754,264 - - 666,248 754,264 Total $ 27,597,309 $ 29,799,531 $ 15,031,560 $ 16,254,934 $ 42,628,869 $ 46,054,465 As of September 30, 2021, total outstanding debt was $42,628,869, which includes both revenue bonds payable and notes payable. The outstanding debt amount decreased $3,425,596 over the previous year. Next Year's Budgets and Rates The fiscal year 2022 budget was approved and required the use of $42,414 in reserves to balance the General Fund budget while maintaining the same property tax millage for the seventh consecutive year. Clermont's 4.2601 millage continues to be one of the lowest of comparable cities in the region. Property values continued to increase in fiscal year 2022 in the amount of 8.44%. Pursuant to a utility rate study performed by a private consulting firm, the Clermont City Council adopted a resolution in December 2017 that provided for an increase to stormwater rates in January 2018. This resolution also provided for inflation based increases to the water, sewer, stormwater, and sanitation rates every October 1st, starting October 1, 2018. The increase is based on the Florida Public Service Commission Annual Deflator Index and are necessary, primarily to provide funding for the future planned capital projects. The 2022 budget includes these rate increases in the Proprietary Funds. 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. Page 126 BASIC FINANCIAL STATEMENTS Page 127 n Page 128 City of Clermont, Florida Statement of Net Position September 30, 2021 Assets: Cash and cash equivalents Investments Receivables, net Inventories Due from other governments Internal balances Prepaid costs Restricted assets: Cash and cash equivalents Investments Interest receivable Net pension asset Capital assets not being depreciated Capital assets being depreciated, net of accumulated depreciation Total assets Deferred Outflows of Resources: Deferred outflow of pension earnings Deferred outflow related to OPEB Deferred charge on refunding Total deferred outflows of resources Liabilities: Accounts payable and accrued expenses Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Total liabilities Deferred Inflows of Resources: Deferred inflow of pension earnings Deferred inflow related to OPEB Total deferred inflows of resources Net Position: Net investment in capital assets Restricted for: Capital Improvements Community redevelopment Public safety Culture and recreation Infrastructure Debt service Building services Transportation Cemetery Unrestricted Total net position Primary Government Governmental Business -type Activities Activities Total $ 14,338,221 $ 22,626,405 $ 36,964,626 16,946,557 18,949,659 35,896,216 1,014,984 1,298,407 2,313,391 17,621 17,002 34,623 1,056,201 416,990 1,473,191 (50,116) 50,116 - 453,588 206,258 659,846 - 1,879,511 1,879,511 10,770,200 16,419,877 27,190,077 16,896 34,183 51,079 10,541,292 - 10,541,292 29,956,370 11,200,630 41,157,000 49,236,496 89,220,465 138,456,961 134,298,310 162,319,503 296,617,813 3,733,029 - 3,733,029 1,466,831 445,423 1,912,254 - 726,167 726,167 5,199,860 1,171,590 6,371,450 4,246,462 2,175,846 6,422,308 192,639 - 192,639 2,254,703 1,303,394 3,558,097 37,090,123 17,445,301 54,535,424 43,783,927 20,924,541 64,708,468 7,132,013 - 7,132,013 229,138 71,709 300,847 7,361,151 71,709 7,432,860 51,595,557 88,519,639 140,115,196 - 25,419,884 25,419,884 507,206 - 507,206 2,883,972 2,883,972 3,451,833 3,451,833 2,684,980 2,684,980 1,833,697 1,833,697 1,992,908 1,992,908 24,742 24,742 1,531,427 - 1,531,427 21,846,770 28,555,320 50,402,090 $ 88,353,092 $ 142,494,843 $ 230,847,935 The accompanying Notes to Financial Statements are an integral part of this statement. Page 129 City of Clermont, Florida Statement of Activities Year Ended September 30, 2021 Functions/Proarams: 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 Net (Expense) Revenue and Changes in Net Position Program Revenue Primary Government Charges for Operating Grants Capital Grants and Governmental Business -type Expenses Services and Contributions Contributions Activities Activities Total $ 5,918,171 $ 4,249,762 $ 3,922 $ $ (1,664,487) $ $ (1,664,487) 23,712,850 1,778,204 1,119,536 (20,815,110) (20,815,110) 2,763,287 - 281,641 2,155,531 (326,115) (326,115) 2,264,129 536,584 - (1,727,545) (1,727,545) 665,094 - 40,397 - (624,697) (624,697) 4,044,169 2,318,752 43,443 50,000 (1,631,974) (1,631,974) 686,929 - - - (686,929) (686,929) 40,054,629 8,346,718 2,025,523 2,205,531 (27,476,857) (27,476,857) 7,109,563 8,465,551 - 5,914,646 7,270,634 7,270,634 8,172,055 8,074,497 11,407,831 11,310,273 11,310,273 3,467,370 3,784,598 - 317,228 317,228 1,990,565 1,782,926 4,771,298 4,563,659 4,563,659 20,739,553 22,107,572 - 22,093,775 23,461,794 23,461,794 $ 60,794,182 $ 30,454,290 $ 2,025,523 $ 24,299,306 (27,476,857) 23,461,794 (4,015,063) General Revenues: Property taxes 14,353,854 - 14,353,854 Business taxes 143,984 143,984 Franchise fees 3,360,139 3,360,139 Utility taxes 4,466,642 4,466,642 Intergovernmental - unrestricted 9,969,074 - 9,969,074 Unrestricted investment earnings 70,396 106,161 176,557 Miscellaneous 720,857 - 720,857 Gain on sale of capital assets - 40,066 40,066 Transfers 2,346,072 (2,346,072) - Total general revenues and transfers 35,431,018 (2,199,845) 33,231,173 Change in net position 7,954,161 21,261,949 29,216,110 Net Position - beginning 80,398,931 121,232,894 201,631,825 Net Position - ending $ 88,353,092 $ 142,494,843 $ 230,847,935 The accompanying Notes to Financial Statements are an integral part of this statement. Page 130 City of Clermont, Florida Balance Sheet Governmental Funds September 30, 2021 Infrastructure Other Total Capital Special Governmental Governmental General Projects Revenue Funds Funds Assets: Cash and cash equivalents $ 4,484,444 $ 875,376 $ 1,908,306 $ 6,906,066 $ 14,174,192 Investments 10,505,343 74,135 674,656 5,084,467 16,338,601 Receivables, net 1,023,914 - 685 3,995 1,028,594 Inventories, at cost 17,621 - - - 17,621 Due from other governments 503,439 200,000 348,840 3,922 1,056,201 Due from other funds 3,922 - - - 3,922 Prepaid costs 435,692 - 13,295 448,987 Restricted Investments - 10,770,200 - 10,770,200 Total assets $ 16,974,375 $ 11,919,711 $ 2,932,487 $ 12,011,745 $ 43,838,318 Liabilities: Accounts payable $ 1,172,132 $ 704,479 $ 247,507 $ 160,175 $ 2,284,293 Due to other funds 287,127 - - 3,922 291,049 Accrued liabilities 1,318,285 69,764 1,388,049 Unearned revenue 190,484 - 190,484 Total liabilities 2,968,028 704,479 247,507 233,861 4,153,875 Deferred Inflows of Resources: Unavailable revenue - liens, forfeitures and rents 98,189 98,189 Total deferred inflows of resources 98,189 - 98,189 Fund Balances: Nonspendable 453,313 - 13,295 466,608 Restricted 447,901 - 2,684,980 11,764,589 14,897,470 Assigned 1,390,092 11,215,232 - - 12,605,324 Unassigned 11,616,852 - - - 11,616,852 Total fund balances 13,908,158 11,215,232 2,684,980 11,777,884 39,586,254 Total liabilities, deferred inflows of resources, and fund balances $ 16,974,375 $ 11,919,711 $ 2,932,487 $ 12,011,745 Amounts reported for governmental activities in the Statement of Net Position are different Capital assets used in governmental activities are not financial resources and are not reported in the funds. 79,192,866 Accrued interest payable is not due in the current period and therefore is not reported in the funds. (235,678) Other long-term assets are not available to pay for current period expenditures and, therefore are deferred in the funds. 98,189 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. (2,161,291) Net pension assets are not current financial resources and therefore are not reported in the funds 10,551,155 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. 676,286 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. (39,354,689) Net Position of Governmental Activities in the Statement of Net Position. $ 88,353,092 The accompanying Notes to Financial Statements are an integral part of this statement. Page 131 City of Clermont, Florida Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended September 30, 2021 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: Physical environment Economic environment Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Transfers in Transfers out Sale of general capital assets Total other financing sources (uses) Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Infrastructure Other Total Capital Special Governmental Governmental General Projects Revenue Funds Funds $ 18,513,069 $ $ $ 451,411 $ 18,964,480 3,360,139 - 3,360,139 461,931 1,796,871 2,258,802 7,693,536 200,000 4,306,742 44,319 12,244,597 2,586,994 - - 237,980 2,824,974 176,011 - 176,011 - - - 2,457,101 2,457,101 41,026 13,874 2,000 12,135 69,035 1,320,956 43,437 - 5,335 1,369,728 34,153,662 257,311 4,308,742 5,005,152 43,724,867 5,692,584 695 52,452 3,922 5,749,653 21,375,719 - 816,582 2,099,169 24,291,470 2,636,835 18,580 92,096 2,747,511 1,416,803 655,076 - 2,071,879 150,489 - 457,531 608,020 2,943,370 7,515 76,315 3,027,200 - 88,016 2,114,206 2,202,222 2,978 - 14,753 693,685 711,416 - 55,839 - - 55,839 - 4,461,100 - - 4,461,100 34,218,778 4,517,634 1,652,974 5,536,924 45,926,310 (65,116) (4,260,323) 2,346,072 (218,472) 44,214 2,171,814 - 2,106,698 (4,260,323) 11,801,460 15,475,555 $ 13,908,158 $ 11,215,232 $ 2,655,768 (531,772) (2,201,443) 2,833,008 5,179,080 (1,893,744) (720,792) (2,833,008) - 44,214 (1,893,744) 2,112,216 2,390,286 762,024 1,580,444 188,843 1,922,956 10,197,440 39,397,411 2,684,980 $ 11,777,884 $ 39,586,254 The accompanying Notes to Financial Statements are an integral part of this statement. Page 132 City of Clermont, Florida Reconcliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended September 30, 2021 Net Change in Fund Balances - total governmental funds: $ 188,843 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. 3,531,431 The net effect of various miscellaneous transactions involving capital assets (i.e. sales, trade- ins and disposals) is to decrease net position. (138,884) Contributions of capital assets are not reported as revenues in the governmental funds 1,955,531 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. (19,041) Cash pension contributions reported in the funds were more than the calculated pension expense on the statement of activities, and therefore increased net position. 1,636,658 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 reoavments exceeded proceeds. 2,202,222 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. (929,454) 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. (473,145) Change in Net Position of Governmental Activities $ 7,954,161 The accompanying Notes to Financial Statements are an integral part of this statement. Page 133 City of Clermont, Florida Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund Year ended September 30, 2021 Variance with Final Budget - Actual Amounts, Positive Budgeted Amounts Budgetary Basis (Negative) Original Final Revenues: Taxes $ 18,089,201 $ 18,089,201 $ 18,513,069 $ 423,868 Franchise fees 3,250,000 3,250,000 3,360,139 110,139 Licenses and permits 250,300 250,300 461,931 211,631 Intergovernmental revenues 5,125,295 5,442,955 7,693,536 2,250,581 Charges for services 2,298,801 2,298,801 2,586,994 288,193 Fines and forfeitures 114,200 114,200 176,011 61,811 Investment earnings 95,000 95,000 41,026 (53,974) Miscellaneous 776,353 915,805 1,320,956 405,151 Total revenues 29,999,150 30,456,262 34,153,662 3,697,400 Expenditures: Current: General government: City council 41,829 72,170 71,761 409 City clerk 366,151 458,991 439,324 19,667 City manager 832,747 1,129,654 1,051,819 77,835 Finance 999,776 1,039,519 960,973 78,546 Legal services 105,000 147,086 143,087 3,999 Planning & zoning 608,117 615,735 649,711 (33,976) Information technology 904,584 981,808 931,082 50,726 Human resources 588,733 598,540 403,925 194,615 Purchasing 289,665 317,810 314,802 3,008 Other general government 222,386 728,000 726,100 1,900 4,958,988 6,089,313 5,692,584 396,729 Public safety: Law enforcement 10,704,513 10,808,174 10,523,641 284,533 Fire control 10,958,353 11,291,474 10,852,078 439,396 21,662,866 22,099,648 21,375,719 723,929 Physical environment 2,349,237 2,826,775 2,636,835 189,940 Transportation 1,535,994 1,535,185 1,416,803 118,382 Economic environment 159,782 159,782 150,489 9,293 Culture and recreation 3,156,166 3,412,785 2,943,370 469,415 Interest and fiscal charges - - 2,978 (2,978) Total expenditures 33,823,033 36,123,488 34,218,778 1,904,710 Excess (deficiency) of revenues over expenditures (3,823,883) (5,667,226) (65,116) 5,602,110 The accompanying Notes to Financial Statements are an integral part of this statement. Page 134 City of Clermont, Florida Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund Year ended September 30, 2021 Other Financing Sources (Uses): Transfers In 2,147,211 2,856,950 2,346,072 (510,878) Transfers Out (218,467) (268,269) (218,472) 49,797 Sale of General Capital Assets 15,000 15,000 44,214 29,214 Total other financing sources (uses) 1,943,744 2,603,681 2,171,814 (431,867) Net Change in Fund Balance (1,880,139) (3,063,545) 2,106,698 5,170,243 Fund Balance - beginning 11,801,460 11,801,460 11,801,460 - Fund Balance - ending $ 9,921,321 $ 8,737,915 $ 13,908,158 $ 5,170,243 The accompanying Notes to Financial Statements are an integral part of this statement. Page 135 n Page 136 City of Clermont, Florida Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Infrastructure Special Revenue Fund Year ended September 30, 2021 Revenues: Intergovernmental revenues Investment earnings Total revenues Expenditures: Current: General government Public safety: Police Fire control Physical Environment Transportation Culture and recreation Debt Service: Principal Interest 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 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 2,666,687 $ 2,788,468 $ 4,306,742 $ 1,518,274 4,200 4,200 2,000 (2,200) 2,670,887 2,792,668 4,308,742 1,516,074 20,463 279,814 52,452 227,362 275,600 420,725 200,363 220,362 375,000 757,413 616,219 141,194 650,600 1,178,138 816,582 361,556 - 321,452 18,580 302,872 880,522 655,076 225,446 - 7,517 7,515 2 85,734 85,734 88,016 (2,282) 20,352 20,352 14,753 5,599 106,086 106,086 102,769 3,317 777,149 2,773,529 1,652,974 1,120,555 1,893,738 19,139 2,655,768 2,636,629 (1,893,738) (1,893,738) (1,893,744) (6) (1,893,738) (1,893,738) (1,893,744) (6) - (1,874,599) 762,024 2,636,623 1,922,956 1,922,956 1,922,956 - $ 1,922,956 $ 48,357 $ 2,684,980 $ 2,636,623 The accompanying Notes to Financial Statements are an integral part of this statement. Page 137 City of Clermont, Florida Statement of Net Position Proprietary Funds September 30, 2021 Assets: Current assets: Cash and cash equivalents Investments Restricted cash and cash equivalents Accounts receivable, net Due from other governments Inventories Prepaid expenses Total current assets Noncurrent assets: Restricted investments Advances to other funds Interest receivable Capital assets: Land, buildings and equipment Construction in progress Less accumulated depreciation Total capital assets (net of accumulated depreciation) Total noncurrent assets Total assets Deferred Outflows of Resources: Deferred charge on refunding Deferred outflows related to OPEB Total deferred outflows of resources Governmental Business -type Activities -Enterprise Funds Activities - Internal Service Water Sewer Sanitation Stormwater Total Fund $ 7,962,607 $ 12,311,120 $ 1,938,192 $ 414,486 $ 22,626,405 $ 164,029 9,937,148 6,783,980 2,228,531 - 18,949,659 607,956 845,214 729,382 71,374 233,541 1,879,511 - 468,636 512,923 197,940 118,908 1,298,407 2,930 300,233 - - 116,757 416,990 - 17,002 - - - 17,002 - 97,827 68,734 22,306 17,391 206,258 4,601 19,628,667 20,406,139 4,458,343 901,083 45,394,232 779,516 2,448,657 11,800,824 2,170,396 - 16,419,877 - - 275,000 287,127 562,127 - 12,780 19,116 2,287 - 34,183 356 49,690,925 79,685,323 5,237,128 21,542,462 156,155,838 - 3,091,592 6,209,801 195,785 191,645 9,688,823 (18,493,122) (37,711,873) (3,437,546) (5,781,025) (65,423,566) 34,289,395 48,183,251 1,995,367 15,953,082 100,421,095 - 36,750,832 60,278,191 4,455,177 15,953,082 117,437,282 356 56,379,499 80,684,330 8,913,520 16,854,165 162,831,514 779,872 259,180 466,987 - - 726,167 - 156,336 120,877 119,562 48,648 445,423 - 415,516 587,864 119,562 48,648 1,171,590 The accompanying Notes to Financial Statements are an integral part of this statement. Page 138 Liabilities: Current liabilities: Accounts payable 676,294 339,309 124,466 167,556 1,307,625 334,618 Salaries payable 97,441 100,236 74,462 34,124 306,263 3,824 Accrued interest payable 27,929 49,651 10,847 35,205 123,632 - Due to other funds - - - 275,000 275,000 Compensated absences 16,258 19,948 8,150 2,170 46,526 Customer deposits payable 434,942 - - - 434,942 - Unearned revenue - 3,384 - - 3,384 2,155 Revenue bonds and notes payable -current 316,440 562,560 88,971 288,897 1,256,868 - Total current liabilities 1,569,304 1,075,088 306,896 802,952 3,754,240 340,597 Noncurrent liabilities: Compensated absences 146,321 179,533 73,349 19,533 418,736 - Other post employment benefits 1,151,070 962,299 786,295 352,209 3,251,873 Notes payable - - 1,147,739 3,726,953 4,874,692 Revenue bonds payable 3,204,000 5,696,000 - - 8,900,000 Total noncurrent liabilities 4,501,391 6,837,832 2,007,383 4,098,695 17,445,301 - Totalliabilities 6,070,695 7,912,920 2,314,279 4,901,647 21,199,541 340,597 Deferred Inflows of Resources: Deferred inflows related to OPEB 27,193 17,336 19,900 7,280 71,709 Total deferred inflows of resources 27,193 17,336 19,900 7,280 71,709 - Net Position: Net investment in capital assets 31,028,135 42,391,678 2,929,053 12,170,773 88,519,639 Restricted for capital improvements 6,313,333 19,106,551 - - 25,419,884 - Unrestricted 13,355,659 11,843,709 3,769,850 (176,887) 28,792,331 439,275 Total net position $ 50,697,127 $ 73,341,938 $ 6,698,903 $ 11,993,886 142,731,854 $ 439,275 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. (237,011) Total Net Position per Government -Wide Financial Statements $ 142,494,843 The accompanying Notes to Financial Statements are an integral part of this statement. Page 139 n Page140 City of Clermont, Florida Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds Year Ended September 30, 2021 Governmental Business -type Activities -Enterprise Funds Activities - Internal Service Water Sewer Sanitation Stormwater Total Fund Operating Revenues: Charges for services $ 7,997,519 $ 8,071,532 $ 3,784,598 $ 1,782,926 $ 21,636,575 $ 5,391,074 Miscellaneous 468,032 2,965 - - 470,997 35,290 Total operating revenues 8,465,551 8,074,497 3,784,598 1,782,926 22,107,572 5,426,364 Operating Expenses: Personnel services 1,990,414 2,093,753 1,455,806 744,020 6,283,993 68,556 Utilities 574,275 911,380 2,237 11,111 1,499,003 - Dump fees 18,144 294,482 601,342 16,670 930,638 Administrative services 466,671 453,853 233,241 148,757 1,302,522 Repairs and maintenance 1,213,980 279,295 200,185 44,981 1,738,441 Depreciation and amortization 1,769,189 3,119,667 460,939 728,619 6,078,414 - Professional services 254,230 142,303 43,636 17,947 458,116 58,165 Insurance claims and expenses 141,780 178,869 72,413 43,159 436,221 5,962,564 Other supplies and expenses 511,785 433,734 338,609 83,074 1,367,202 - Total operating expenses 6,940,468 7,907,336 3,408,408 1,838,338 20,094,550 6,089,285 Operating income (loss) 1,525,083 167,161 376,190 (55,412) 2,013,022 (662,921) Nonoperating Revenues (Expenses): Investment income 37,315 52,230 13,925 2,691 106,161 1,361 Interest expense (113,805) (203,012) (32,922) (106,849) (456,588) - Gain (loss) on disposal of capital assets 1,491 38,575 40,066 - Total nonoperating revenue (expenses) (74,999) (150,782) 19,578 (104,158) (310,361) 1,361 Income (loss) before contributions and transfers 1,450,084 16,379 395,768 (159,570) 1,702,661 (661,560) Capital contributions 5,914,646 11,407,831 - 4,771,298 22,093,775 Transfers out (1,135,342) (1,210,730) - - (2,346,072) Change in net position 6,229,388 10,213,480 395,768 4,611,728 21,450,364 (661,560) Total Net Position - Beginning 44,467,739 63,128,458 6,303,135 7,382,158 1,100,835 Total Net Position - Ending $ 50,697,127 $ 73,341,938 $ 6,698,903 $ 11,993,886 $ 439,275 Change in Net Position, per above 21,450,364 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. (188,415) Change in Business -Type Activities in Net Position per Government -Wide Financial Statements $ 21,261,949 The accompanying Notes to Financial Statements are an integral part of this statement. Page 141 City of Clermont, Florida Statement of Cash Flows Proprietary Funds Year Ended September 30, 2021 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 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 Governmental Activities - Business -Type Activities -Enterprise Funds Internal Service Water Sewer Sanitation Stormwater Total Fund $ 8,334,079 $ 7,981,194 $ 3,753,196 $ 1,755,304 $ 21,823,773 $ - - - - - - 5,428,542 (2,846,931) (2,992,977) (1,480,487) (231,219) (7,551,614) (5,892,126) (1,925,877) (1,966,009) (1,365,589) (700,995) (5,958,470) (67,703) 3,561,271 3,022,208 907,120 823,090 8,313,689 (531,287) - - 110,000 - 110,000 (1,135,342) (1,210,730) - (2,346,072) (1,135,342) (1,210,730) 110,000 (2,236,072) (3,304,292) (2,795,500) (19,363) (651,198) (6,770,353) 1,491 38,575 40,066 (87,450) (155,466) (33,683) (109,317) (385,916) (307,800) (547,200) (86,736) (281,638) (1,223,374) - - 93,243 93,243 1,614,146 2,658,918 - 4,273,064 (2,083,905) (839,248) (101,207) (948,910) (3,973,270) The accompanying Notes to Financial Statements are an integral part of these statements. Page142 Cash Flows from Investing Activities: Sale (purchase) of investments 221,254 454,758 (1,030,678) (354,666) 351,196 Investment income 173,947 256,596 (7,632) 2,691 425,602 1,587 Net cash provided by investing activities 395,201 711,354 (1,038,310) 2,691 70,936 352,783 Net Increase (Decrease) in Cash and Cash Equivalents 737,225 1,683,584 (122,397) (123,129) 2,175,283 (178,504) Cash and Cash Equivalents - beginning 8,070,596 11,356,918 2,131,963 771,156 22,330,633 342,533 Cash and Cash Equivalents - end $ 8,807,821 $ 13,040,502 $ 2,009,566 $ 648,027 $ 24,505,916 $ 164,029 Classified As: Cash and cash equivalents $ 7,962,607 $ 12,311,120 $ 1,938,192 $ 414,486 $ 22,626,405 $ 164,029 Restricted cash and cash equivalents 845,214 729,382 71,374 233,541 1,879,511 - Total $ 8,807,821 $ 13,040,502 $ 2,009,566 $ 648,027 $ 24,505,916 $ 164,029 Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating income (loss) $ 1,525,083 $ 167,161 $ 376,190 $ (55,412) $ 2,013,022 $ (662,921) Adjustments Not Affecting Cash: Depreciation and amortization 1,769,189 3,119,667 460,939 728,619 6,078,414 - Change in Assets and Liabilities: Decrease (Increase) in accounts receivable (145,910) (96,687) (31,402) (27,622) (301,621) 2,208 Increase in unearned revenue - 3,384 3,384 (30) Increase in customer deposits 14,438 - - 14,438 - Decrease in prepaid costs (18,352) (8,140) 3,650 (2,453) (25,295) 2 Decrease (Increase) in inventory (9,114) - - (9,114) - Increase (Decrease) in accounts payable 361,400 (290,921) 7,526 136,933 214,938 128,601 Increase in OPEB 83,726 93,435 68,681 39,436 285,278 - Increase in accrued liabilities (19,189) 34,309 21,536 3,589 40,245 853 Total adjustments 2,036,188 2,855,047 530,930 878,502 6,300,667 131,634 Net Cash Provided (Used) by Operating Activities $ 3,561,271 $ 3,022,208 $ 907,120 $ 823,090 $ 8,313,689 $ (531,287) Noncash Investing, Capital, and Financing Activities: Contributed assets $ 4,000,267 $ 8,748,913 $ - $ 4,561,298 $ 17,310,478 $ Increase (Decrease) in Fair Value of Investments $ (128,541) $ (192,265) $ 23,005 $ - $ (297,801) $ The accompanying Notes to Financial Statements are an integral part of these statements. Page143 City of Clermont, Florida Statement of Fiduciary Net Position Fiduciary Funds September 30, 2021 Assets: Cash and cash equivalents Investments at fair value: U.S. Government & other debt securities Equities Total investments Total assets Liabilities: Refunds payable and other Pending trades payable Total liabilities Net Position Restricted for Pensions Total Employee Pension Funds 1,810,813 20,652,235 39,669,273 60,321,508 62,132, 321 10,369 615,517 625,886 61,506,435 The accompanying Notes to Financial Statements are an integral part of this statement. Page144 City of Clermont, Florida Statement of Changes in Fiduciary Net Position Fiduciary Funds Year Ended September 30, 2021 Total Employee Pension Funds Additions: Contributions: Employer $ 2,212,560 Plan members 584,841 State 600,906 Total contributions 3,398,307 Investment earnings Net increase (decrease) in fair value of investments 9,114,343 Interest and dividends 1,389,378 Less: Investment expense (44,000) Total net investment earnings 10,459,721 Total additions 13,858,028 Deductions: Benefits/distributions 1,021,198 Refund of contributions 35,960 Administrative 148,889 Total deductions 1,206,047 Change in Net Position 12,651,981 Net Position - beginning 58,569,161 Prior period adjustment (9,714,707) Net Position - ending $ 61,506,435 The accompanying Notes to Financial Statements are an integral part of this statement. Page145 n Page146 NOTES TO FINANCIAL STATEMENTS Page147 n Page148 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The City of Clermont, Florida (the City) is a political subdivision of the State of Florida located in Lake County. The City of Clermont was incorporated under State law in December 1916 and operates under the council-manager form of government under its charter adopted pursuant to H.B. 2223, Ch.67-1217 Special Acts, of the State of Florida. The legislative branch of the City is composed of a Mayor and four (4) members elected Council. The City Council is responsible for the establishment and adoption of policy. The execution of such policy is the responsibility of the Council appointed City Manager. In evaluating how to define the government, for financial reporting purposes, the City has considered all potential component units. The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body, and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects or activities of, or the level of services performed or provided by, the organization. A financial benefit or burden relationship exists if the primary government (a) is entitled to the organizations' resources; (b) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the organization. In applying the above criteria, the City has one blended component unit as follows: The City of Clermont Community Redevelopment Fund., The City of Clermont created the Downtown Redevelopment Agency in May of 1997. This is a dependent taxing district established in accordance with Chapter 163, Part III, Florida Statutes. Notification to affected taxing agency was done in compliance with Chapter 163.346, Part III, Florida Statutes. The incremental annual increase in tax over the base years will be used to fund projects designed to enhance and improve the described area. The City Council, being the duly elected governmental body for the designated area, passed Resolution 97-950, which established the City of Clermont as the Redevelopment Agency for the purpose of carrying out the community redevelopment programs and plans within the area. Through Ordinance 359-M the City established the Community Redevelopment Trust Fund to account for all transactions generated by this special revenue fund. The City of Clermont Community Redevelopment Fund is presented as a blended component unit. The CRA is governed by a board of seven- the five members of the Clermont City Council and two individuals appointed by the City Council. On December 8, 2015, Ordinance No. 2015-77 passed and modification of the Community Redevelopment Plan was approved. Because the governing body of the CRA is substantively the same as the City and the City has operational responsibility for the CRA, the CRA is presented as a blended component unit of the City. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the 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. Page149 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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. Nonmajor Governmental Fund Types Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes other than debt service or capital projects. The Debt Service Fund was established to account for the accumulation of resources and payment of bond principal and interest from governmental resources. 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. 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. Page 150 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Nonmajor Proprietary Funds Internal Service Fund is used to account for the costs of group insurance which are charged to other departments on a cost reimbursement basis. Fiduciary Funds Pension Trust Funds account for activities of police officers, firefighters and general employees retirement plans which accumulate resources for pension benefit payments to qualified employees. As a general rule the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are other charges between the City's water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 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. Assets, Liabilities, Deferred Outflowsllnf lows and Net Position/Fund Balance: Deposits and Investments The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Investments of the City are reported at fair value and are categorized within the fair value hierarchy established in accordance with GASB Statement No. 72, Fair Value Measurement and Application. The City's investments consist of investments authorized per their investment policy adopted in accordance with Section 218.415, Florida Statutes. 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." 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. Page 151 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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. 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. Capital Assets Capital assets, which include property, plant, equipment, intangible and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $1,000 or more and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. Capital assets of the City are depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings 10-50 Improvements 15-50 Infrastructure 30-50 Equipment& Machinery 3-15 Intangible Assets 3-15 Page 152 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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. For governmental activities, compensated absences, net pension obligations, and net other postemployment benefit obligations are generally liquidated by the general fund. 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 three items that qualify for reporting in this category. The deferred charge on refunding, deferred outflows of pension earnings and deferred outflow related to OPEB 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 and OPEB reported in the government -wide statement of net position. 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. 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. Page 153 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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. New GASB Statements Implemented In fiscal year 2021, the City implemented GASB Statement No. 84, Fiduciary Activities, which establishes criteria for identifying and reporting fiduciary activities of all state and local governments. The focus of the criteria is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Governments with activities meeting this criteria should present a statement of fiduciary net position and a statement of changes in fiduciary net position. The City does not consider the general employees' defined contribution pension plan to meet the criteria for reporting as fiduciary activities due to the City's administrative involvement with those funds. As such, the general employees' defined contribution pension fund is no longer presented in the fiduciary statements, and the beginning fund balance of the fiduciary funds decreased by $9,714,707. Prior Period Adjustments As stated above in the new accounting standards, the general employees' defined contribution pension fund is excluded from the City's Fiduciary Statements but was previously included in the prior years, affecting the comparability of financial statements for those years. As a result of this change, beginning fiduciary net position has been adjusted by $9,714,707. NOTE 2 RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government -Wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances - total governmental funds and changes in net position of governmental activities as reported in the government -wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this difference are as follows: Capital Outlay Depreciation Expense 7,725,072 (4,193, 641) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 3,531,431 Page 154 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 2 RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS (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 difference are as follows: Principal Repayment $ 2,202,222 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 2,202,222 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 $ (25,784) Other Post Employment Benefits (928,157) Accrued Interest Payable 24,487 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (929,4541 NOTE 3 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Budgetary Information The City follows these procedures in establishing the budgetary data reflected in the financial statements: • Prior to the end of the fiscal year, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. • Budget workshops are scheduled as needed. • The general summary of the budget and notice of public hearing is published in the local newspaper. • Public hearings are conducted to obtain taxpayer comments. • Prior to October 1, the budgets are legally enacted through passage of a resolution. • The City Manager is authorized to transfer budgeted amounts within departments; however, any revisions that alter the total appropriations of any department must be approved by the City Council. • The level of classification detail at which expenditures may not legally exceed appropriations is the department level. • Appropriations lapse at the close of the fiscal year to the extent they have not been expended. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders and contracts) outstanding at year end are reported as assigned fund balances and do not constitute expenditures or liabilities because the commitments will be re -appropriated and honored during the subsequent year. • Budgets are adopted for the general fund, 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. • 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. Page 155 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 3 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (CONTINUED) 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. Expenditures in Excess of Appropriations Expenditures exceeded appropriations in various departments of the General Fund, and Debt Service Fund. These excess expenditures were funded by greater than anticipated revenues and available fund balance. NOTE 4 CASH AND INVESTMENTS Deposits All bank deposits were fully covered by federal depository insurance or by collateral held in banks that are members of the State of Florida's Collateral Pool as specified under Florida law. Florida Statutes provide for collateral pooling by banks and savings and loans. This limits local government deposits to "authorized depositories". Investments Investments in all fund types are stated at fair value, which is the amount for which an investment could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. Fair value is based on quoted market prices. Changes in the fair value of investments are recognized as revenue and included in investment income. The City's investment policies are governed by state statute and city ordinance. Authorized investments are: • The Local Government Surplus Funds Trust (SBA). • SEC registered money market funds. • Interest -bearing time deposits or savings accounts in qualified public depositories. • Direct obligations of the U.S. Treasury. • Federal agencies and instrumentalities. • Securities of, or other interests in, any open-end or closed -end management -type investment company or investment trust registered under the Investment Company Act of 1940. • Repurchase Agreements. • Other investments authorized by ordinance. The assets of the City's 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. Page 156 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 4 CASH AND INVESTMENTS (CONTINUED) Investments made by the City of Clermont at September 30, 2021 are summarized below. Defined benefit pension plan investments, other than $49,383,980 in mutual funds, investing in equity securities, are included below. In accordance with GASB 31, investments are reported at fair value. Weighted Average Investment Type Fair Value Credit Rating Maturity Federal Agency Bond $ 4,271,392 AA+ 1.77 years Federal Agency Mortgage -Backed Securities 600,876 AA+ 9.56 years Federal Agency Commercial Mortgage -Backed Securities 1,276,258 AA+ 1.92 years Federal Agency Colataralized Mortgage Obligation 113,678 AA+ 6.73 years US Treasury Notes 7,124,529 AA+ 2.26 years Supra -National Agency Bond/Note 1,767,586 AAA 2.29 years Corporate Note 4,384,595 BBB+/AA 2.27 years Asset Backed Security 3,594,063 AAA/NR 3.1 years Municipal Bonds 1,125,758 AAA 1.92 years FL Palm 25,886,962 AAAm 80 days Pension Fixed Income Securities 20,652,235 various 2 - 8 years $ 70,797,932 Credit Risk: 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, 2021, all of the city's bank deposits were in qualified public depositories. For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2021, 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. Page 157 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 4 CASH AND INVESTMENTS (CONTINUED) Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The City uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets liabilities, or groups of assets and liabilities. Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable, and uses significant unobservable inputs that uses the best information available under the circumstances, which includes the City's own data in measuring unobservable inputs. The City has the following recurring fair value measurements as of September 30, 2021: Investments Valued by Fair Value Level Federal Agency Bond $ Federal Agency Colataralized Mortgage Obligation Federal Agency Commercial Mortgage -Backed Securiti( Federal Agency Mortgage -Backed Securities US Treasury Notes Supra -National Agency Bond/Note Corporate Note Asset Backed Security Municipal Bonds Pension Fixed Income Securities Pension Equity Securities Quoted Prices in Active Markets for Identical Assets (Level 1) 4,271,392 $ 113,678 1,276,258 600,876 7,124, 529 1,767,586 4,384,595 3,594,063 1,125,758 20,652,235 39,837,474 84,748,444 $ 7,124,529 20,652,235 39,837,474 Significant Other Observable Inputs (Level 2) $ 4,271,392 113,678 1,276,258 600,876 1,767,586 4,384,595 3,594,063 1,125,758 67,614,238 $ 17,134,206 Page 158 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 5 RECEIVABLES Receivables as of year end for the City's individual major funds and nonmajor funds, including the applicable allowances for uncollectible accounts, are as follows: Less Allowance for Uncollectible Accounts Taxes Other Accounts Total General Fund $ 3,082,150 $109,360 $ 852,029 $ (3,019,625) $1,023,914 Infrastructure Special Revenue Fund - - 685 685 Water Fund 467,127 59,244 (44,955) 481,416 Sewer Fund 661,864 19,116 (148,941) 532,039 Sanitation Fund 250,118 2,555 (52,446) 200,227 Stormwater Fund 144,292 178 (25,562) 118,908 Nonmajor Governmental Funds - 3,995 3,995 Internal Service Fund - 3,286 3,286 $ 4,605,551 $109,360 $ 941,088 $ (3,291,529) $ 2,364,470 NOTE 6 CAPITAL ASSETS Capital asset activity for the year ended September 30, 2021 was as follows: Beginning Balance Increases Decreases Ending Balance Governmental Activities: Capital Assets, not being depreciated: Land $ 25,345,300 $ 505,730 $ - $ 25,851,030 Construction in progress 5,568,901 5,315,815 (6,779,376) 4,105,340 Total capital assets, not being depreciated 30,914,201 5,821,545 (6,779,376) 29,956,370 Capital Assets, being depreciated: Buildings Improvements/infrastructure Machinery and equipment Intangibles Total capital assets being depreciated Less Accumulated Depreciation for: Buildings Improvements/infrastructure Machinery and equipment Intangibles Total accumulated depreciation Total capital assets being depreciated, net Governmental activities capital assets, net 31,304,222 321,148 31,625,370 31,126,101 8,065,447 39,191, 548 16,692,541 2,151,645 (478,136) 18,366,050 554,945 6,500 (39,377) 522,068 79,677,809 10,544,740 (517,513) 89,705,036 (12,251,318) (1,020,316) (13,271,634) (13,681,423) (1,447,895) - (15,129,318) (10,351,939) (1,696,896) 432,946 (11,615,889) (462,542) (28,534) 39,377 (451,699) (36,747,222) (4,193,641) 472,323 (40,468,540) 42,930,587 6,351,099 (45,190) 49,236,496 $ 73,844,788 $12,172,644 $(6,824,566) $ 79,192,866 Page 159 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 6 CAPITAL ASSETS (CONTINUED) Beginning Balance Increases Decreases Ending Balance Business -type Activities: Capital Assets, not being depreciated: Land $ 1,511,807 $ - $ - $ 1,511,807 Construction in progress 7,253,374 5,015,045 (2,579,596) 9,688,823 Total capital assets, not being depreciated 8,765,181 5,015,045 (2,579,596) 11,200,630 Capital Assets, being depreciated: Buildings Improvements/infrastructure Machinery and equipment Intangibles Total capital assets being depreciated Less Accumulated Depreciation for: Buildings Improvements/infrastructure Machinery and equipment Intangibles Total accumulated depreciation Total capital assets being depreciated, net Business -type activities capital assets, net 989,780 - 989,780 120,956,716 20,390,503 141,347,219 11,086,360 1,201,866 (384,460) 11,903,766 426,242 53,013 (75,989) 403,266 133,459,098 21,645,382 (460,449) 154,644,031 (116,329) (37,606) (153,935) (53,531,615) (4,958,875) - (58,490,490) (5,919,850) (1,034,386) 384,460 (6,569,776) (237,807) (47,547) 75,989 (209,365) (59,805,601) (6,078,414) 460,449 (65,423,566) 73,653,497 15,566,968 - 89,220,465 $82,418,678 $20,582,013 $(2,579,596) $ 100,421,095 Depreciation expense was charged to functions/programs as follows: Governmental Activities: General government $ 716,750 Public safety 1,658,471 Physical env ironment/transportation 240,025 Economic environment 590,701 Culture and recreation 987,694 Total Depreciation Expense - governmental activities $ 4,193,641 Business -type Activities Water $ 1,769,189 Sewer 3,119,667 Sanitation 460,939 Stormwater 728,619 Total Depreciation Expense - business -type activities $ 6,078,414 Page 160 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 7 CAPITAL LEASES The City has entered into lease agreements for financing the acquisition of communications equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases are as follows: Machinery & equipment Less: accumulated depreciation Total Governmental Activities 919,125 (285,535) 633,590 Amortization of equipment leased and capital leases is included in depreciation expense. The future minimum lease obligations and the net present value of these minimum payments as of September 30, 2021 were as follows: Year Ending September 30 Governmental Activities 2022 $ 102,769 2023 102,769 2024 102,769 2025 102,769 2026 102,769 Thereafter 205,538 Total minimum lease payments 719,383 Less: amount representing interest (53,135) $ 666,248 NOTE 8 LONG-TERM DEBT Bonds Payable- Public Offering The City issues bonds to provide funds for the acquisition and construction of major capital assets. In the event of default, bondholders may take any remedies legally appropriate, and declare all principal and accrued interest is due and payable immediately. Bonds have been issued for business -type activities. In a prior year, the City issued Water and Sewer Revenue and Refunding Bonds, Series 2017 in the amount of $10,817,000 with interest of 2.38% to partially refund the Water and Sewer Revenue and Refunding Bond Series 2009. This bond is secured by the net revenue of the water and sewer system. The total principal and interest remaining to be paid on this series is $10,987,172. For the fiscal year, principal and interest paid on this series was $1,097,915 and total pledged revenue was $6,670,645. Page 161 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 8 LONG-TERM DEBT (CONTINUED) The original amount of revenue bonds issued in prior years is described below. Revenue bonds outstanding at year end are as follows: Balance Interest Rates Original September 30, Business -Type Activities and Dates Maturity Amount 2021 Water and Sewer Revenue 2.38% 12/1/2018 Refunding Bonds, to Series2017 (6/1 &12/1) 12/1/2030 $ 10,817,000 $ 9,779,000 $ 9,779,000 Annual debt service requirements to maturity for revenue bonds are as follows: Year Ending September 30, 2022 2023 2024 2025 2026 2027-2031 Total Business - Type Activities Principal Interest 879,000 $ 222,280 900,000 201,110 920,000 179,452 943,000 157,283 965,000 134,578 5,172,000 313,469 9,779,000 $ 1,208,172 Notes Payable- Direct Borrowing The City issued Public Improvement Refunding Revenue Note, Series 2016 in the amount of $5,331,196 with interest of 2.03% to refund the Public Improvement Revenue Note, Series 2013. This note is secured by public services taxes and communications service tax. Total principal and interest remaining to be paid on this series is $3,811,393. For the fiscal year, principal and interest paid on this series was $476,815 and total pledged revenue was $5,793,731. In the event of default, the lender may seek enforcement of all remedies available under the law. Any amounts due on the note that remain unpaid shall bear interest at the default rate until all amounts then due are paid in full. The City issued Infrastructure Sales Surtax Revenue Note, Series 2016 in the amount of $5,300,000 with interest of 2.12% to finance the costs of the acquisition and construction of a new municipal police station. This note is secured by the infrastructure sales surtax. Total principal and interest remaining to be paid on this series is $4,182,726. For the fiscal year, principal and interest paid on this series was $418,724 and total pledged revenue was $4,258,795. In the event of default, the lender may seek enforcement of all remedies available under the law. Any amounts due on the note that remain unpaid shall bear interest at the default rate until all amounts then due are paid in full. The City issued Master Plan Capital Projects Revenue Note, Series 2017 in the amount of $30,000,000 with interest of 2.63% to fund master plan projects, Victory Pointe, Boat Ramp Relocation, Downtown Waterfront District Revitalization, Legacy Loop Trail Spur, Public Wi-Fi Network, Public Works Complex, and City Limits Entryway Signs. This note is secured by a covenant to budget and appropriate. Total principal and interest remaining to be paid on this series is $29,026,799. For the fiscal year, principal and interest paid on this series was $2,423,725. In the event of default, the lender may seek enforcement of all remedies available under the law. Any amounts in the project fund shall be applied to repayment of principal and interest. Page 162 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 8 LONG-TERM DEBT (CONTINUED) Revenue notes outstanding at year end are as follows: Balance Interest Rates Original September 30, Governmental Activities and Dates Maturity Amount 2021 Public Improvement Refunding 2.03% 12/1/2016 Revenue Note, Series 2016 (6/1 & 12/1) to 12/1/2028 $ 5,331,196 3,518,185 Infrastructure Sales Surtax 2.12% 12/1/2016 Revenue Note, Series 2016 (6/1 & 12/1) to 12/1/2030 $ 5,300,000 3,769,436 Master Plan Capital Projects 2.63% 12/1/2018 Revenue Note, Series 2017 (6/1 & 12/1) to 12/1/2032 $ 23,670,559 19,643,440 $ 26,931,061 Business -Type Activities Master Plan Capital Projects 2.63% 12/1/2018 Revenue Note, Series 2017 (6/1 & 12/1) to 12/1/2032 $ 6,329,441 $ 5,252,561 Annual debt service requirements to maturity for revenue notes are as follows: Governmental Activities Business -Type Activities Year Ending September 30, Principal Interest Principal Interest 2022 $ 2,164,966 $ 641,584 $ 377,868 $ 133,174 2023 2,218,409 588,188 387,995 123,103 2024 2,272,175 533,472 398,122 112,765 2025 2,327,849 477,405 408,671 102,156 2026 2,383,858 419,962 419,220 91,269 2027-2031 11,850,649 1,206,958 2,267,839 282,769 2032-2033 3,713,155 98,297 992,846 26,284 Total $ 26,931,061 $ 3,965,866 $ 5,252,561 $ 871,520 Page 163 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 8 LONG-TERM DEBT (CONTINUED) Changes in Long -Term Liabilities Long-term liability activity for the year ended September 30, 2021 was as follows: Beginning Ending Due Within Balance Additions Deductions Balance One Year Governmental Activities Public improvement revenue notes $ 3,919,507 $ $ (401,322) $ 3,518,185 $ 409,469 Infrastructure revenue notes 4,104,694 (335,258) 3,769,436 342,365 Capital Projects revenue notes 21,021,066 (1,377,626) 19,643,440 1,413,132 Capital Leases 754,264 (88,016) 666,248 89,737 Other post employment benefits 9,508,353 673,383 - 10,181,736 - Net pension liability 31,475 (31,475) - - Compensated absences 1,549,860 180,770 (154,986) 1,575,644 157,564 Governmental activity long-term liabilities $ 40,889,219 $ 854,153 $ (2,388,683) $39,354,689 $ 2,412,267 Business -type Activities Bonds payable - Revenue bonds $ 10,634,000 $ - $ (855,000) $ 9,779,000 $ 879,000 Capital Projects revenue notes 5,620,934 - (368,374) 5,252,560 377,868 Other post employment benefits 3,044,903 206,970 3,251,873 - Compensated absences 450,498 59,815 (45,051) 465,262 46,526 Business -type activity long-term liabilities $ 19,750,335 $ 266,785 $ (1,268,425) $18,748,695 $ 1,303,394 For governmental activities, compensated absences, net pension obligations, and net other postemployment benefit obligations are generally liquidated by the general fund. NOTE 9 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS Interfund transfers for the year ended September 30, 2021 consisted of the following: Transfers Out: General Fund General Fund $ Infrastructure Fund - Water Fund 1,135,342 Sewer Fund 1,210,730 Nonmajor Governmental - $ 2,346,072 Transfers In Nonmajor Govt Total $ 218,472 $ 218,472 1,893,744 1,893,744 - 1,135,342 - 1,210,730 720,792 720,792 $ 2,833,008 $ 5,179,080 The majority of the transfers were to fund other capital projects and debt service payments. Transfers from the Water Fund and Sewer Fund to the General Fund were based on a percentage of water and sewer sales. Page 164 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 9 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (CONTINUED) The composition of interfund advances as of September 30, 2021 is as follows: Receivable Fund Pavable Fund Amount Sewer Fund Stormwater Fund $ 275,000 Sanitation Fund General Fund 287,127 562,127 The balance due to the Sanitation fund from the General Fund is a result of an interfund loan for the purchase of a fire truck to be repaid over ten years. The balance due to the Sewer fund from the Stormwater fund is for the upfront construction costs on the Victory Pointe project that will be funded from various grants upon the completion of the project. 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 general employees defined benefit plan is the Florida Municipal Pension Trust Fund, an agent of the multiple -employer Public Employee Retirement System. The assets and benefits of the general employees defined contribution plan are administered by the Florida League of Cities. The plan administration for the police and firefighters pension plans is the Pension Resource Center. With recent adoption by the Florida Legislation of Chapter 2015-39, Laws of Florida, a separate Defined Contribution component of the Police and Fire Retirement Plans was established on October 1, 2015 and will provide special benefits in the form of a supplemental retirement, termination, death and disability benefits to be funded solely and entirely by premium tax monies. The Share Plan benefits are additional to the benefits currently provided by the defined benefit component currently provided. Funds will be allocated to eligible members on each valuation date. 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. The general employee's plan 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. This plan is 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. The Police and Firefighters' Pension Plans are administered by a Pension Resource Center. These plans do not issue stand alone audit reports. 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. General Employees Contributions The City's actuarially determined contribution rate per the October 1, 2020 actuarial valuations is $5,582 for general employees. Administrative costs are deducted from the net position of the plan. Summary of Significant Accounting Policies Plan Description - The general employees defined benefit pension plan is for general employees hired prior to September 30, 1985. Plan Administration - The General Employees' Pension is administered by a Board of Trustees. Page 165 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (CONTINUED) Plan Membership - At September 30, 2021 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 4 Inactive Plan Members Entitled to but Not Yet Receiving Benefits Active Plan Members 4 Net Pension Liability of the City The City's net pension liability was measured as of September 30, 2021, 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, 2021 were as follows: Total Pension Liability $ 276,692 Plan Fiduciary Net Position (286,555) Sponsor's Net Pension Liability (Asset) $ (9,863) Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) 103.56% Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of October 1, 2020, updated September 30, 2021 using the following actuarial assumptions: Inflation 2.77% Salary Increases 0.00% Investment Rate of Return 7.00% Mortality rates were based on the sex -distinct rates set forth in the PUB-2010 Mortality Table with full generational improvements in mortality using Scale MP-2018. 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, 2021 are summarized in the following table: Long Term Expected Real Rate Asset Class Target Allocation of Return Core Bonds 15% 1.60% Core Plus 15% 2.10% U.S. Large Cap Equity 34% 4.60% U.S. Small Cap Equity 11% 5.50% Non-U.S. Equity 15% 6.70% Core real estate 10% 5.00% Total 100% Page 166 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (CONTINUED) Discount rate The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in Net Pension Liability Increase (Decrease) Total Pension Plan Fiduciary Net Liability Position Net Pension Liability (a) (b) (a) - (b) Balance at September 30, 2020 $ 305,055 $ 273,580 $ 31,475 Changes Due to: Service Cost - - - Expected interest growth 21,619 19,304 2,315 Unexpected investment income - 31,729 (31,729) Demographic experience - - Employer contributions - 5,582 (5,582) Benefit payments and refunds (49,982) (38,315) (11,667) Administrative expenses - (5,325) 5,325 Assumption changes - - - Balance at September 30, 2021 $ 276,692 $ 286,555 $ (9,863) Sensitivity of the Net Pension Liability to changes in the Discount Rate General Pension Plan Net Pension Liability Current Discount 1 % Decrease Rate 6.00% 7.00% $ 46,044 $ (9,863) $ 1% Increase 8.00% 18,195 Deferred outflows and inflows of resources For the year ended September 30, 2021 the City will recognize a pension expense of ($38,509). On September 30, 2021 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 Net Difference Between Projected and actual Earnings on Pension Plan Invesments Deferred Outflows of Deferred Inflows of Resources Resources 4,035 $ 4,035 $ Page 167 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (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: 2022 $ 1,499 2023 1,940 2024 596 2025 2026 Thereafter 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, 2021 actuarial valuation was 20.19%. Employees must contribute 5% 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 $379,293 in 2021 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. Plan Membership At September 30, 2021 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 24 Inactive Plan Members Entitled to but Not Yet Receiving Benefits 28 Active Plan Members 78 130 Page 168 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (CONTINUED) Net Pension Liability of the City The City's net pension liability was measured as of September 30, 2021, 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, 2021 were as follows: Total Pension Liability $ 23,763,682 Plan Fiduciary Net Position (28,938,693) Sponsor's Net Pension Liability (Asset) $ (5,175,011) Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) 121.78% * does not include Share Plan balances or excess chapter 175/185 contributions Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of October 1, 2018, updated September 30, 2021 using the following actuarial assumptions: Inflation 2.50% Salary Increases 5.50% Investment Rate of Return 7.00% Mortality rates were based on the sex -distinct rates set forth in the PUB-2010 Headcount -Weighted Employee Mortality Table, with full generational improvements in mortality using Scale MP-2018. 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, 2021 are summarized in the following table: Long Term Expected Real Rate Asset Class Target Allocation of Return Core Bonds 15% 1.60% Core Plus 15% 2.10% U.S. Large Cap Equity 34% 4.60% U.S. Small Cap Equity 11% 5.50% Non-U.S. Equity 15% 6.70% Core real estate 10% 5.00% Total 100% Page 169 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (CONTINUED) Discount rate The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in Net Pension Liability Balance at September 30, 2019 Changes Due to: Service Cost Expected interest growth Unexpected investment income Demographic experience Employer contributions Employee contributions Benefit payments and refunds Administrative expenses Assumption changes Balance at September 30, 2020 Increase (Decrease) Total Pension Plan Fiduciary Net Liability Position Net Pension Liability (a) (b) (a) - (b) $ 20,888,384 $ 23,337,027 $ (2,448,643) 1,335,386 - 1,335,386 1,535,299 1,652,130 (116,831) - 3,307,309 (3,307,309) 260,114 - 260,114 - 1,084,478 (1,084,478) - 268,568 (268,568) (550,996) (550,996) - - (59,823) 59,823 295,495 - 295,495 $ 23,763,682 $ 29,038,693 $ (5,275,011) Sensitivity of the Net Pension Liability to changes in the Discount Rate Current Discount 1 % Decrease Rate 1 % Increase 6.00% 7.00% 8.00% Police Pension Net Pension Liability (Asset) $ (1,690,656) $ (5,175,011) $ (7,997,379) Deferred outflows and inflows of resources For the year ended September 30, 2021 the City will recognize a pension expense of $327,328. On September 30, 2021 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred OuMows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 223,427 $ 544,974 Changes of assumptions 1,318,695 - Net difference between projected and actual earnings on pension plan investments - 3,216,032 $ 1,542,122 $ 3,761,006 Page 170 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (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: 2022 $ (503,110) 2023 (492,608) 2024 (711,442) 2025 (669,463) 2026 72,320 Thereafter 85,419 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, 2021 is $174,468. Firefighters' Retirement The firefighters' defined benefit pension plan is a local law, single employer, defined benefit pension plans as defined under Florida Statutes, Chapters 175 and 185, which covers all full time and volunteer firefighters employed by the City. Employees are eligible to participate in the plan immediately upon employment with the City, and they are vested in the plan after ten years of service. The plan is administered by a board of Trustees. Contributions The City's actuarially determined contribution rate per the October 1, 2020 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 $221,613 in 2021 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. Page 171 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (CONTINUED) Plan Membership At September 30, 2021 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits Inactive Plan Members Entitled to but Not Yet Receiving Benefits Active Plan Members 68 78 153 Net Pension Liability of the City The City's net pension liability was measured as of September 30, 2021, 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, 2021 were as follows: Total Pension Liability $ 23,825,081 Plan Fiduciary Net Position (29,191,362) Sponsor's Net Pension Liability (Asset) $ (5,366,281) Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) 122.52% * does not include Share Plan balances or excess chapter 175/185 contributions Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of October 1, 2018, updated September 30, 2021 using the following actuarial assumptions: Inflation 2.50% Salary Increases 5.50% Investment Rate of Return 7.00% Mortality rates were based on the sex -distinct rates set forth in the PUB-2010 Headcount -Weighted Employee Mortality Table, with full generational improvements in mortality using Scale MP-2018. 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. Page 172 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (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, 2021 are summarized in the following table: Long Term Expected Real Rate Asset Class Target Allocation of Return Core Bonds 15% 1.60% Core Plus 15% 2.10% U.S. Large Cap Equity 34% 4.60% U.S. Small Cap Equity 11% 5.50% Non-U.S. Equity 15% 6.70% Core real estate 10% 5.00% Total 100% Discount rate The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in Net Pension Liability Increase (Decrease) Total Pension Plan Fiduciary Net Liability Position Net Pension Liability (a) (b) (a) - (b) Balance at September 30, 2019 $ 20,734,056 $ 22,771,575 $ (2,037,519) Changes Due to: Service Cost 1,555,175 - 1,555,175 Expected interest growth 1,542,677 1,647,540 (104,863) Unexpected investment income - 3,216,507 (3,216,507) Demographic experience (18,454) - (18,454) Employer contributions - 1,606,558 (1,606,558) Employee contributions - 316,273 (316,273) Benefit payments and refunds (283,350) (283,350) - Administrative expenses - (83,741) 83,741 Assumption changes 294,977 - 294,977 Balance at September 30, 2020 $ 23,825,081 $ 29,191,362 $ (5,366,281) Page 173 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (CONTINUED) Sensitivity of the Net Pension Liability to changes in the Discount Rate Current Discount 1 % Decrease Rate 1 % Increase 6.00% 7.00% 8.00% Fire Pension Net Pension Liability (Asset) $ (1,786,536) $ (5,366,281) $ (8,256,630) Deferred outflows and inflows of resources For the year ended September 30, 2021 the City will recognize a pension expense of $771,141. On September 30, 2021 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 189,768 $ 232,062 Changes of assumptions 1,997,104 - Net difference between projected and actual earnings on pension plan investments - 3,138,945 $ 2,186,872 $ 3,371,007 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: 2022 $ (288,379) 2023 (276,583) 2024 (382,671) 2025 (361,853) 2026 89,986 Thereafter 35,365 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, 2021 is $0. 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 46, Article I, 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 2021 was $9,449,802; the City's total payroll for City employees was $21,116,986. Page 174 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (CONTINUED) 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 2021 was $969,748. Aggregate Amounts of All Pension Plans The aggregate amounts for all of the City's defined benefit pension plans at September 30, 2021 are as follows: Net Pension Asset (Liability) General Employees Pension Plan $ 9,863 Police Pension Plan 5,175,011 Firefighters Pension Plan 5,366,281 $ 10,551,155 Governmental Activities Deferred Inflows Deferred Outflows Expense $ - $ 4,305 $ (38,509) (3,761,006) 1,542,122 327,328 (3,371,007) 2,186,872 771,141 $ (7,132,013) $ 3,733,299 $ 1,059,960 Individual Fiduciary Fund Statements Individual statements of net position for the four plans included in the City of Clermont fiduciary funds are as follows: City of Clermont, Florida Individual Statements of Fiduciary Net Position September 30, 2021 Assets: Cash and cash equivalents Investments: U.S. Government& other debt securities Equities Total Investments Total assets General Police Employees Officers Firefighters Total Defined Pension Pension Employee Benefit Trust Trust Pension Funds $ 2,006 $ 643,785 $ 1,165,022 $ 1,810,813 89,692 10,138,005 10,424,538 20,652,235 194,857 19,962,465 19,511,951 39,669,273 284,549 30,100,470 29,936,489 60,321,508 286,555 30,744,255 31,101,511 62,132,321 Liabilities: Refunds payable and other Pending trades payable Total liabilities - Net Position Restricted for Pensions $ 286,555 1,441 8,928 10,369 7,860 607,657 615,517 9,301 616,585 625,886 $ 30,734,954 $ 30,484,926 $ 61,506,435 Page 175 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 10 RETIREMENT PLANS (CONTINUED) Individual statements of the changes in fiduciary net position are as follows: City of Clermont, Florida Individual Statements of Changes in Fiduciary Net Position Year Ended September 30, 2021 General Police Employees Officers Firefighters Total Defined Pension Pension Employee Benefit Trust Trust Pension Funds Additions: Contributions: Employer $ 5,582 $ 787,031 $ 1,419,947 $ 2,212,560 Plan members - 268,568 316,273 584,841 State - 379,293 221,613 600,906 Total contributions 5,582 1,434,892 1,957,833 3,398,307 Investment earnings: Net increase (decrease) in fair value of investments 51,033 4,627,009 4,436,301 9,114,343 Interestand dividends - 707,141 682,237 1,389,378 Investment expense - (23,400) (20,600) (44,000) Total net investment earnings 51,033 5,310,750 5,097,938 10,459,721 Total additions 56,615 6,745,642 7,055,771 13,858,028 Deductions: Benefits/distributions 38,315 709,190 273,693 1,021,198 Refund of contributions - 20,526 15,434 35,960 Administrative expenses 5,325 59,823 83,741 148,889 Total deductions 43,640 789,539 372,868 1,206,047 Change in Net Position 12,975 5,956,103 6,682,903 12,651,981 Net Position Restricted for Pensions Beginning of Year 273,580 24,778,851 23,802,023 48,854,454 End of Year $ 286,555 $ 30,734,954 $ 30,484,926 $ 61,506,435 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. This plan does not issue stand-alone financial statements. Page 176 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 11 OTHER POST EMPLOYMENT BENEFITS (CONTINUED) As of October 1, 2018, the valuation date, there were 346 active employees and 11 inactive employees currently receiving benefits. The OPEB liability of $13,433,609 was measured as of September 30, 2021 and was determined by the actuarial valuation. The covered payroll was $19,075,627, and the ratio of Net OPEB liability as a percentage of covered payroll was 70.42%. 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 Other Postemployment Benefits Liability and Related Ratios Schedule, immediately following the notes to the financial statements as required supplementary information, presents multi -year trend information about whether the actuarial value of the plan assets is increasing or decreasing over time. The schedule includes one year. 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. The Total liability was determined using the following actuarial assumptions and other inputs, applied to all periods include in the measurement unless otherwise specified: Initial Health Care Cost Trend Rate Ultimate Health Care Cost Trend Rate Fiscal Year the Ultimate Rate is Reached Additional Information Valuation Date Actuarial Cost Method Discount Rate* Inflation Rate Salary Rate Increase Funded Ratio (Fiduciary Net Position as a percentage of Total OPEB Liability) Covered Payroll Net OPEB Liability as a Percentage of Covered Payroll 8.50% 5.00% Fiscal year 2029 October 1, 2018 Entry Age Normal 2.66% 0.00% 2% NA 19,075,627 70.42% * The discount rate was based on the index provided by Bond Buyer 20-Bond General Obligation Index based on the 20 year AA municipal bond rate as of September 30, 2019. Page 177 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 11 OTHER POST EMPLOYMENT BENEFITS (CONTINUED) Below are the details regarding the Total OPEB liability for the measurement period from October 1, 2020, to September 30, 2021. Total OPEB Liability Balance as of 9/30/2020 $ 12,553,256 Changes for the year: Service Cost 760,368 Interest 333,917 Difference Between Expected & Actual Experience - Changes of Assumptions and Other Inputs Benefit Payments(') (213,932) Other Changes - Net Changes $ 880,353 Balance as of 9/30/2020 $ 13,433,609 (1) Includes the Implicit Rate Subsidy. The following table presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage higher than the current discount rate: Decrease Discount Rate Increase 1.66% 2.66% 3.66% Total OPEB Liability $ 14,895,654 $ 13,433,609 $ 10,677,100 The following presents the total OPEB liability of the city, as well as what the City's OPEB liability would be if it were calculated using healthcare trend rates that are 1 percentage point lower and 1 percentage point higher than the current healthcare cost trend rates: Decrease Health Care Increase 1% Trend 1% Total OPEB Liability $ 10,393,549 $ 13,433,609 $ 15,275,896 For the fiscal year ended September 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Difference between expected and actual experience Changes of assumptions Total Deferred Outflows of Deferred Inflows of Resources Resources $ 584,808 $ - 1,327,447 300,847 $ 1,912,255 $ 300,847 Page 178 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 11 OTHER POST EMPLOYMENT BENEFITS (CONTINUED) Amounts reported as deferred outflows or resources and deferred inflows of resources related to OPEB will be recognized in OPEB expenses as follows: Fiscal Year Ending September 30, 2022 $ 333,081 2023 333,081 2024 333,081 2025 333,081 2026 279,084 Thereafter - Postemployment benefits (OPEB's) The City provides optional postemployment healthcare and dental insurance coverage to eligible individuals. Eligible individuals - Employees of the City who are eligible for retirement or disability retirement under the City's retirement plans may elect to participate in the City -sponsored insurance plans (healthcare and dental) at their cost. Retiree monthly premiums for postemployment insurance coverage - retirees must pay monthly contributions in accordance with City Resolution #2013-06 based upon plan costs as determined by the City in conjunction with insurance carriers. Failure to pay insurance premiums will result in termination of insurance coverage without the ability to reinstate such coverage. 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 $181,500 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 $4,895,468. 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 $334,618 represents claims processed through October 2021 which were applicable to the current fiscal year and any additional claims are deemed immaterial. Changes to the current claims liability are as follows: 2021 2020 Claims Liabilities, beginning of year $ 206,017 $ 251,597 Incurred Claims 5,962,564 5,615,898 Payments on Claims (5,833,963) (5,661,478) Claims Liabilities, end of year $ 334,618 $ 206,017 Page 179 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 13 COMMITMENTS AND CONTINGENCIES Litigation The City is engaged in various liability claims incidental to the conduct of its general government operations at September 30, 2021. While the ultimate outcome of the litigation cannot be determined at this time, management believes that any amounts not covered by insurance, if any, resulting from these lawsuits would not materially affect the financial position of the City. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the City carries commercial insurance. The City has obtained excess insurance coverage with varying retentions and limits to further limit exposure to large losses. There have been no significant reductions in insurance coverage from the prior year and settlements have not exceeded insurance coverage during the past three years. NOTE 14 FUND BALANCES The City classifies the components of fund balance based on the classifications described below: Nonspendable 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. Page 180 City of Clermont, Florida Notes to Financial Statements Year Ended September 30, 2021 NOTE 14 FUND BALANCES (CONTINUED) 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. At September 30, 2021, the City's governmental fund balances were as follows: Infrastructure Other Capital Special Governmental General Fund Projects Revenue Fund Funds Total Fund Balances Nonspendable Inventory/prepaids $ 453,313 $ $ $ 13,295 $ 466,608 Spendable Restricted for: Police 100,643 - 838,149 938,792 Fire - 1,945,180 1,945,180 Transportaton 24,742 24,742 Tree replacement 322,516 322,516 Building Services - 1,983,207 1,983,207 Culture and recreaton 3,129,317 3,129,317 Community redevelopment 503,881 503,881 Infrastructure 2,684,980 - 2,684,980 Debt service - 1,833,697 1,833,697 Cemetery 1,531,158 1,531,158 Assigned for: Capital projects - 11,215,232 - 11,215,232 Police/fire donations 4,287 4,287 Subsequent year expenditures 1,385,805 - 1,385,805 Unassigned 11,616,852 - - 11,616,852 $ 13,908,158 $11,215,232 $ 2,684,980 $ 11,777,884 $39,586,254 Page 181 n Page 182 REQUIRED SUPPLEMENTAL INFORMATION Page 183 n Page 184 City of Clermont, Florida Schedule of Changes in Net OPEB Liability and Related Ratios Last 10 Fiscal Years 9/30/2021 9/30/2020 9/30/2019 9/30/2018 Total OPEB Liability Service cost $ 760,368 $ 740,666 $ 721,475 $ 496,316 Interest 333,917 309,219 288,724 312,754 Differences between expected and actual experience - - 181,592 - Changes ofassumptions 2,106,772 (662,223) Benefit Payments (2) (213,932) (242,837) (236,545) (109,600) Other changes - - - - Net change in total OPEB liability 880,353 807,048 3,062,018 37,247 Total OPEB liability, beginning (1) 12,553,256 11,746,208 8,684,190 8,646,943 Total OPEB liability, ending $ 13,433,609 $ 12,553,256 $ 11,746,208 $ 8,684,190 Plan fiduciary net position as a percentage of total OPEB liability 0.00% 0.00% 0.00% 0.00% Covered payroll $ 19,075,627 $ 19,075,627 $ 18,701,595 $ 14,293,247 Net OPEB liability as a percentage of covered payroll 70.42% 65.81 % 62.81 % 60.76% Notes to Schedule: (1) Fiscal Year 2016 results calculated one year later using a 3.35% Discount Rate index as of 9/30/2017. (2) Includes the Implicit Rate Subsidy. Prior year information not available, will be updated when information is available Page 185 City of Clermont, Florida Schedule of Changes in Net Pension Liability and Related Ratios - General Employees Year Ended September 30, 2021 Total Pension Liability Service Cost Interest 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 Payroll Net Pension Liability as a Percentage of Covered Payroll 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 21,619 21,619 21,414 23,435 22,569 22,224 29,060 28,229 - - 33,131 - 17,118 12,118 40,676 - - 28,462 31,161 (10,549) (49,982) (49,982) (53,410) (51,013) (57,338) (61,435) (63,484) (56,412) (28,363) (28,363) 1,135 (27,578) 10,811 4,068 (4,297) (28,183) 305,055 333,418 332,283 359,861 349,050 344,982 349,279 377,462 $ 276,692 $ 305,055 $ 333,418 $ 332,283 $ 359,861 $ 349,050 $ 344,982 $ 349,279 5,582 11,018 11,018 8,767 8,767 - - - 51,033 16,320 14,396 24,889 44,469 29,829 2,613 40,560 (38,315) (42,156) (53,410) (57,338) (57,338) (61,435) (63,484) (66,212) (5,235) (5,271) (1,597) (1,681) (5,457) (1,757) (6,508) (3,136) 13,065 (20,089) (29,593) (25,363) (9,559) (33,363) (67,379) (28,788) 273,580 293,669 323,262 348,625 358,184 391,547 458,926 487,714 $ 286,645 $ 273,580 $ 293,669 $ 323,262 $ 348,625 $ 358,184 $ 391,547 $ 458,926 $ (9,953) $ 31,475 $ 39,749 $ 9,021 $ 11,236 $ (9,134) $ (46,565) $ (109,647) 103.60% 89.68% 88.08% 97.29% 96.88% 102.62% 113.50% 131.39% N/A N/A N/A N/A N/A N/A N/A N/A Page 186 City of Clermont, Florida Schedule of Changes in Net Pension Liability and Related Ratios - Police Year Ended September 30, 2021 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Total Pension Liability Service Cost $ 1,335,386 $ 1,048,755 $ 1,048,755 $ 941,659 $ 941,659 $ 836,661 $ 560,680 $ 524,531 Interest 1,535,299 1,300,909 1,290,431 1,170,292 1,049,633 749,652 860,884 723,246 Changes in Excess State Money - - - - - - - - Differences Between Expected and Actual Experience 260,114 (610,614) (108,041) (204,387) (211,987) (162,697) Changes of Assumptions - 576,133 3,155,202 Benefit Payments, including refunds of employee contributions (550,996) (446,562) (403,441) (381,207) (640,378) (342,697) (298,559) (532,943) Assumption changes 295,495 - 1,209 - - - - - Net Change in Total Pension Liability 2,875,298 1,903,102 1,326,340 1,622,703 1,722,660 4,186,831 960,308 714,834 Total Pension Liability -beginning 20,888,384 18,985,282 17,658,942 16,036,239 14,313,579 10,126,748 9,166,440 8,451,606 Total Pension Liability -ending (a) $ 23,763,682 $ 20,888,384 $ 18,985,282 $ 17,658,942 $ 16,036,239 $ 14,313,579 $ 10,126,748 $ 9,166,440 Plan Fiduciary Net Position Contributions -employer 1,084,478 943,063 891,380 944,540 756,302 632,411 281,722 411,953 Contributions -state - - - - - - 240,486 217,653 Contributions -employee 268,568 238,416 175,526 120,269 116,332 108,806 99,188 95,733 Net Investment Income 4,959,439 2,346,071 1,330,033 1,245,288 1,908,188 1,115,432 (14,779) 1,043,670 Benefit Payments, including refunds of employee contributions (550,996) (446,562) (403,441) (381,207) (640,378) (342,697) (298,559) (334,599) Administrative Expense (59,823) (61,414) (102,202) (51,400) (49,645) (30,651) (54,494) (31,851) Other - - - - - - - - Net Change in Plan Fiduciary Net Position 5,701,666 3,019,574 1,891,296 1,877,490 2,090,799 1,483,301 253,564 1,402,559 Plan Fiduciary Net Position - beginning 23,237,027 20,217,453 18,326,157 16,448,667 14,357,868 12,874,567 12,621,003 11,218,444 Plan Fiduciary Net Position - ending (b) $ 28,938,693 $ 23,237,027 $ 20,217,453 $ 18,326,157 $ 16,448,667 $ 14,357,868 $ 12,874,567 $ 12,621,003 Net Pension Liability - ending (a) - (b) $ (5,175,011) $ (2,348,643) $ (1,232,171) $ (667,215) $ (412,428) $ (44,289) $ (2,747,819) $ (3,454,563) Plan Fiduciary Net Position as a Percentage of Total Pension Liability 121.78% 111.24% 106.49% 103.78% 102.57% 100.31 % 127.13% 137.69% Covered Payroll $ 4,730,329 $ 3,813,876 $ 3,813,876 $ 3,366,613 $ 3,366,613 $ 3,366,613 $ 3,108,552 $ 2,424,191 Net Pension Liability as a Percentage of Covered Payroll -109.40% -61.58% -32.31%-19.82%-12.25% -1.32%-88.40%-142.50% Page 187 City of Clermont, Florida Schedule of Changes in Net Pension Liability and Related Ratios - Fire Year Ended September 30, 2021 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Total Pension Liability Service Cost $ 1,555,175 $ 1,313,842 $ 1,313,842 $ 1,025,516 $ 1,025,516 $ 784,710 $ 524,325 $ 596,543 Interest 1,542,677 1,272,336 1,141,847 996,576 782,004 515,458 553,753 530,089 Changes in Excess State Money - - - - - - - - Differences Between Expected and Actual Experience (18,454) (158,435) (121,553) 633,143 (208,729) (67,286) Changes of Assumptions 294,977 - 1,079,623 634,356 2,505,255 - BenefitPayments,including refunds of employee (283,350) (288,092) (99,705) (25,120) (4,513) (1,324) (945) (81,466) Net Change in Total Pension Liability 3,091,025 2,298,086 3,277,172 1,875,419 3,070,506 3,595,370 1,009,847 1,045,166 Total Pension Liability -beginning 20,734,056 18,435,970 15,158,798 13,283,379 10,212,873 6,617,503 5,607,656 4,562,490 Total Pension Liability -ending (a) $23,825,081 $20,734,056 $18,435,970 $15,158,798 $13,283,379 $10,212,873 $ 6,617,503 $ 5,607,656 Plan Fiduciary Net Position Contributions -employer 1,606,558 1,649,080 1,585,514 1,278,757 797,699 491,818 646,065 438,902 Contributions -state - - - - - - 181,292 175,931 Contributions -employee 316,273 220,098 231,935 200,118 238,785 279,064 141,632 86,520 Net Investment Income 4,864,047 2,267,101 1,240,965 1,063,078 1,599,687 858,136 (32,699) 704,467 Benefit Payments, including refunds of employee (283,350) (288,092) (99,705) (25,120) (4,513) (1,324) (945) (756) Administrative Expense (83,741) (65,477) (98,170) (35,839) (49,761) (28,346) (40,885) (24,109) Other - - - - - - - - Net Change in Plan Fiduciary Net Position 6,419,787 3,782,710 2,860,539 2,480,994 2,581,897 1,599,348 894,460 1,380,955 Plan Fiduciary Net Position - beginning 22,771,575 18,988,865 16,128,326 13,647,332 11,065,435 9,466,087 8,571,627 7,190,672 Plan Fiduciary Net Position - ending (b) $29,191,362 $22,771,575 $18,988,865 $16,128,326 $13,647,332 $11,065,435 $ 9,466,087 $ 8,571,627 Net Pension Liability - ending (a) - (b) $ (5,366,281) $ (2,037,519) $ (552,895) $ (969,528) $ (363,953) $ (852,562) $ (2,848,584) $ (2,963,971) Plan Fiduciary Net Position as a Percentage of Total 122.52% 109.83% 103.00% 106.40% 102.74% 108.35% 143.05% 152.86% Covered Payroll $ 5,089,447 $ 4,438,530 $ 4,438,530 $ 3,602,745 $ 3,602,745 $ 2,798,049 $ 2,798,049 $ 2,798,049 Net Pension Liability as a Percentage of Covered Payroll-105.44%-45.91%-12.46%-26.91%-10.10%-30.47%-101.81%-105.93% Page 188 City of Clermont, Florida Schedule of Contributions and Investment Returns — General Employees Year Ended September 30, 2021 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Actuarially Determined Contribution $ 5,582 $ 11,018 $ 11,018 $ 8,767 $ 8,767 $ - $ - $ - Contributions in Relation to the Actuarially Determined Contribution 5,582 11,018 11,018 8,767 8,767 Contribution Deficiency (Excess) $ - $ - $ - $ - $ - $ Covered Payroll - Contributions as a Percentage of Covered Payroll N/A N/A N/A N/A N/A Notes to Schedule Valuation Date 10/1/2018 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 N/A N/A N/A Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, open Remaining Amortization Period 30 years Asset Valuation Method Market Value Inflation 2.77% Salary Increases N/A Interest Rate 7% per year, compounded annually, net of investment expenses Schedule of Investment Returns 9/30/2021 9/30/2020 9/30/2019 913012018 9/30/2017 9/30/2016 9/30/2015 9130/2014 Annual money -weighted rate of return, net of investment expenses 5.92% 4.23% 4.23% 7.00% 4.08% 4.08% 5.48% 8.55% Page 189 City of Clermont, Florida Schedule of Contributions and Investment Returns — Police Year Ended September 30, 2021 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Actuarially Determined Contribution $ 1,084,478 $ 985,611 $ 936,834 $ 905,229 $ 875,593 $ 640,139 $ 583,559 $ 629,606 Contributions in Relation to the Actuarially Determined Contribution 1,084,478 943,063 891,380 944,540 756,302 632,411 522,208 670,126 Contribution Deficiency (Excess) $ - $ 42,548 $ 45,454 $ (39,311) $ 119,291 $ 7,728 $ 61,351 $ (40,520) Covered Payroll $ 4,730,329 $ 3,813,876 $ 3,813,876 $ 3,366,613 $ 3,366,613 $ 3,366,613 $ 3,108,552 $ 3,108,552 Contributions as a Percentage of Covered Payroll 22.93% 24.73% 23.37% 28.06% 22.46% 18.78% 16.80% 21.56% Notes to Schedule Valuation Date 10/1/2020 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, open Remaining Amortization Period 30 Years Asset Valuation Method Market Value Salary Increases 5.50% per annum Interest Rate 7% per annum (2.5% 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% atage 20 to 0.18% atage 50; 75% of disabilities are assumed to be service -connected Mortality Sex -distinct rates setforth in the PUB-2010 Mortality Table, with full generational improvements in mortality using Scale MP-2018 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 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Annual money -weighted rate of return, net of investment expenses 21.40% 4.23% 4.23% 7.00% 4.08% 4.08% 5.48% 8.55% Page 190 City of Clermont, Florida Schedule of Contributions and Investment Returns — Fire Year Ended September 30, 2021 9/30/2020 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Actuarially Determined Contribution $ 1,547,766 $ 1,648,674 $ 1,585,514 $ 1,284,255 $ 1,113,095 $ 647,476 $ 603,000 $ 614,833 Contributions in Relation to the Actuarially Determined Contribution 1,606,558 1,649,080 1,585,514 1,278,757 797,699 491,818 827,357 668,800 Contribution Deficiency (Excess) $ (58,792) $ (406) $ - $ 5,498 $ 315,396 $ 155,658 $ (224,357) $ (53,967) Covered Payroll 5,089,447 4,438,530 4,438,530 3,602,745 3,602,745 2,798,049 2,798,049 2,798,049 Contributions as a Percentage of Covered Payroll 31.57% 37.15% 35.72% 35.49% 22.14% 17.58% 29.57% 23.90% Notes to Schedule Valuation Date 10/1/2020 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported Methods and assumptions used to determine contribution rates: Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, Open Remaining Amortization Period 30 Years Asset Valuation Method Market Value Salary Increases 5.50% per annum Interest Rate 7% per annum (2.5% 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% atage 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 setforth in the PUB-2010 Mortality Table, with full generational improvements in mortality using Scale MP-2018 Non -investment Expenses Liabilities have been loaded by 1.75% to account for non-investnentexpenses Future Contributions Contributions from the employer and employees are assumed to be made as legally required. Schedule of Investment Returns 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Annual money -weighted rate of return, net of investment expenses 20.90% 4.23% 4.23% 7.00% 4.08% 4.08% 5.48% 8.55% Page 191 n Page 192 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Page 193 n Page 194 City of Clermont, Florida Major Governmental Funds Year Ended September 30, 2021 Capital Projects Funds Capital projects funds are used to account for financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Capital Projects Fund This fund was established to account for financial resources segregated for the acquisition or construction of major capital projects. Page 195 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Capital Projects Fund Year ended September 30, 2021 Revenues: Intergovernmental revenues Investment earnings Miscellaneous Total revenues Expenditures: Current: General government Capital Outlay: Physical environment Economic environment Total expenditures Excess (deficiency) of revenues over expenditures Net Change in Fund Balance Fund Balances - beginning Fund Balances - ending Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final 700,000 $ 700,000 $ 200,000 $ (500,000) 175,000 175,000 13,874 (161,126) - - 43,437 43,437 875,000 875,000 257,311 (617,689) 1,009 1,009 695 314 7,093,045 7,353,396 55,839 7,297,557 3,099,300 5,741,596 4,461,100 1,280,496 10,193,354 13,096,001 4,517,634 8,578,367 (9,318,354) (12,221,001) (4,260,323) 7,960,678 (9,318,354) (12,221,001) (4,260,323) 7,960,678 15,475,555 15,475,555 15,475,555 - 6,157,201 $ 3,254,554 $ 11,215,232 $ 7,960,678 Page 196 City of Clermont, Florida Other Governmental Funds Year Ended September 30, 2021 Special Revenue Funds Special revenue funds are used to account for specific revenue sources that are restricted, committed, or assigned to expenditures for particular purposes. Recreation Impact Fees Fund Police Impact Fees Fund Fire Impact Fee Fund Building Services Fund Fire Inspection Fund Community Redevelopment Fund Cemetery Fund This fund was established to account for recreation impact fees collected from new developments constructed in the City. This fund was established to account for police impact fees collected from new developments constructed in the City. This fund was established to account for fire impact fees collected from new developments constructed in the City. This fund was established to account for the operations of the City's building services department which are restricted for use in providing building permitting and inspection services. This fund was established to account for the operations of the City's fire prevention and inspection services. Fund closed in FY2020. This 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. This fund was established to account for the operations and maintenance of the City's cemetery. Debt Service Fund Debt service funds are used to account for financial resources that are restricted, committed, or assigned to expenditures for principal and interest. Debt Service Fund This fund was established to account for the accumulation of resources and payment of bond principal and interest from governmental resources. Page 197 City of Clermont, Florida Combining Balance Sheet Nonmajor Governmental Funds September 30, 2021 Assets: Cash and cash equivalents Investments Other receivables Due from other governments Prepaid costs Total assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Due to other funds Total liabilities Fund balances: Nonspendable Restricted Total fund balances Total liabilities and fund balances Recreation Impact Fees $ 1,770,904 $ 1,370,707 851 $ 3,142,462 $ Special Revenue Police Impact Fire Impact Building Fees Fees Services 467,958 $ 1,163,415 $ 936,987 408,958 782,659 1,145,267 487 566 810 - - 9,701 877,403 $ 1,946,640 $ 2,092,765 $ 13,145 $ 39,254 $ 1,460 $ 42,794 - - - 57,063 13,145 39,254 1,460 99,857 - - - 9,701 3,129,317 838,149 1,945,180 1,983,207 3,129,317 838,149 1,945,180 1,992,908 $ 3,142,462 $ 877,403 $ 1,946,640 $ 2,092,765 Page 198 Special Revenue Community Redevelopment Special Revenue Cemetery $ 262,364 $ 569,499 $ 304,921 971,376 364 917 3,325 269 $ 570,974 $ 1,542,061 $ Total Nonmajor ARPA Special Total Special Governmental Revenue Revenue Funds Debt Service Funds 1,821 $ 5,172,948 $ 1,733,118 $ 6,906,066 - 4,983,888 100,579 5,084,467 - 3,995 - 3,995 3,922 3,922 3,922 - 13,295 - 13,295 5,743 $ 10,178,048 $ 1,833,697 $ 12,011,745 $ 57,224 $ 6,298 $ - $ 160,175 $ $ 160,175 6,544 4,336 1,821 69,764 69,764 - - 3,922 3,922 3,922 63,768 10,634 5,743 233,861 233,861 3,325 269 - 13,295 13,295 503,881 1,531,158 9,930,892 1,833,697 11,764,589 507,206 1,531,427 - 9,944,187 1,833,697 11,777,884 $ 570,974 $ 1,542,061 $ 5,743 $ 10,178,048 $ 1,833,697 $ 12,011,745 Page 199 City of Clermont, Florida Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Year Ended September 30, 2021 Revenues: Taxes Licenses and permits Intergovernmental revenues Charges for services Impact fees/special assessments Investment earnings Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Economic environment 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 Special Revenue Recreation Police Impact Fire Impact Building Impact Fees Fees Fees Services 1,796,871 - - - 53,280 1,661,798 359,313 435,990 - 2,827 1,181 1,919 2,435 1,664,625 360,494 437,909 1,852,586 344,599 52,000 1,702,570 76,315 76,315 344,599 52,000 1,702,570 1,588,310 15,895 385,909 150,016 (569,544) (151,248) (569,544) (151,248) - - 1,018,766 (135,353) 385,909 150,016 2,110,551 973,502 1,559,271 1,842,892 $ 3,129,317 $ 838,149 $ 1,945,180 $ 1,992,908 Page1100 Community Total Nonmajor Redevelopment ARPA Special Total Special Governmental Special Revenue Cemetery Revenue Revenue Funds Debt Service Funds $ 451,411 $ $ $ 451,411 $ $ 451,411 - 1,796,871 1,796,871 40,397 3,922 44,319 44,319 - 184,700 - 237,980 237,980 - - 2,457,101 2,457,101 928 2,243 11,533 602 12,135 105 5,230 - 5,335 - 5,335 492,841 192,173 3,922 5,004,550 602 5,005,152 - - 3,922 3,922 - 3,922 - - 2,099,169 2,099,169 - 92,096 92,096 92,096 457,531 - 457,531 457,531 - 76,315 - 76,315 - 2,114,206 2,114,206 - - - - 693,685 693,685 457,531 92,096 3,922 2,729,033 2,807,891 5,536,924 35,310 100,077 - 2,275,517 (2,807,289) (531,772) - - - 2,833,008 2,833,008 (720,792) - (720,792) - - (720,792) 2,833,008 2,112,216 35,310 100,077 1,554,725 25,719 1,580,444 471,896 1,431,350 8,389,462 1,807,978 10,197,440 $ 507,206 $ 1,531,427 $ $ 9,944,187 $ 1,833,697 $ 11,777,884 Page1101 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Recreation Impact Fees Year ended September 30, 2021 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Impact fees/special assessments $ 1,000,000 $ 1,000,000 $ 1,661,798 $ 661,798 Investment earnings 7,200 7,200 2,827 (4,373) Total revenues 1,007,200 1,007,200 1,664,625 657,425 Expenditures: Current: Culture and recreation 97,414 251,665 76,315 175,350 Total expenditures 97,414 251,665 76,315 175,350 Excess (deficiency) of revenues over expenditures 909,786 755,535 1,588,310 832,775 Other Financing Uses Transfers out (569,540) (569,540) (569,544) (4) Total other financing uses (569,540) (569,540) (569,544) (4) Net Change in Fund Balances 340,246 185,995 1,018,766 832,771 Fund Balances - beginning 2,110,551 2,110,551 2,110,551 - Fund Balances - ending $ 2,450,797 $ 2,296,546 $ 3,129,317 $ 832,771 Page1102 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Police Impact Fees Year ended September 30, 2021 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Impact fees/special assessments $ 300,000 $ 300,000 $ 359,313 $ 59,313 Investment earnings 3,600 3,600 1,181 (2,419) Total revenues 303,600 303,600 360,494 56,894 Expenditures: Current: Public Safety: Law enforcement 74,329 640,394 344,599 295,795 Total expenditures 74,329 640,394 344,599 295,795 Excess (deficiency) of revenues over expenditures 229,271 (336,794) 15,895 352,689 Other Financing Sources (Uses) Transfers out (151,248) (151,248) (151,248) - Total other financing sources (uses) (151,248) (151,248) (151,248) - Net Change in Fund Balances 78,023 (488,042) (135,353) 352,689 Fund Balances - beginning 973,502 973,502 973,502 - Fund Balances - ending $ 1,051,525 $ 485,460 $ 838,149 $ 352,689 Page1103 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Fire Impact Fees Year ended September 30, 2021 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Impact fees/special assessments $ 390,000 $ 390,000 $ 435,990 $ 45,990 Investment earnings 6,000 6,000 1,919 (4,081) Total revenues 396,000 396,000 437,909 41,909 Expenditures: Current: Public safety: Fire control 382 202,286 52,000 150,286 Total expenditures 382 202,286 52,000 150,286 Excess (deficiency) of revenues over expenditures 395,618 193,714 385,909 192,195 Net Change in Fund Balances 395,618 193,714 385,909 192,195 Fund Balances - beginning 1,559,271 1,559,271 1,559,271 - Fund Balances - ending $ 1,954,889 $ 1,752,985 $ 1,945,180 $ 192,195 Page1104 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Building Services Year ended September 30, 2021 Revenues: Licenses and permits Charges for services Investment earnings Total revenues Expenditures: Current: Public safety Total expenditures Excess (deficiency) of revenues over expenditures Other Financing Uses: Transfers in Total other financing sources Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Budgeted Amounts Actual Amounts Original Final 1,120,000 $ 1,120,000 $ 1,796,871 $ 43,500 43,500 53,280 7,200 7,200 2,435 1,170,700 1,170,700 1,852,586 1,707,017 1,707,017 (536,317) (536,317) 1,842,892 1,306,575 $ 1,730,827 1,702,570 1,730,827 1,702,570 (560,127) 150,016 17,498 17,498 (542,629) 1,842,892 1,300,263 $ 150,016 1,842,892 1,992,908 $ Variance with Final Budget - Positive (Negative) 676,871 9,780 (4,765) 681,886 28,257 28,257 710,143 (17,498) (17,498) 692,645 692,645 Page1105 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Redevelopment Special Revenue Year ended September 30, 2021 Revenues: Taxes Intergovernmental revenues Investment earnings Miscellaneous Total revenues Expenditures: Current: Economic development Total expenditures Excess (deficiency) of revenues over expenditures Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Budgeted Amounts Actual Amounts Original Final 453,229 $ 453,229 $ 451,411 $ - 29,210 40,397 4,000 4,000 928 - - 105 457,229 486,439 492,841 410,758 410,758 46,471 46,471 471,896 $ 518,367 $ 961,588 961,588 (475,149) (475,149) 471,896 (3,253) $ Variance with Final Budget - Positive (Negative) (1,818) 11,187 (3,072) 105 6,402 457,531 504,057 457,531 504,057 35,310 510,459 35,310 510,459 471,896 - 507,206 $ 510,459 Page1106 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Cemetery Year ended September 30, 2021 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Charges for services $ 110,000 $ 110,000 $ 184,700 $ 74,700 Investment earnings 7,200 7,200 2,243 (4,957) Miscellaneous 2,000 2,000 5,230 3,230 Total revenues 119,200 119,200 192,173 72,973 Expenditures: Current: Physical environment 115,288 115,800 92,096 23,704 Total expenditures 115,288 115,800 92,096 23,704 Excess (deficiency) of revenues over expenditures 3,912 3,400 100,077 96,677 Net Change in Fund Balances 3,912 3,400 100,077 96,677 Fund Balances - beginning 1,431,350 1,431,350 1,431,350 - Fund Balances - ending $ 1,435,262 $ 1,434,750 $ 1,531,427 $ 96,677 Page1107 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ARPA Special Revenue Year ended September 30, 2021 Revenues: Intergovernmental Total revenues Expenditures: Current: General government 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 Budgeted Amounts Actual Amounts Original Final Variance with Final Budget - Positive (Negative) $ $ $ 3,922 $ 3,922 3,922 3,922 15,000 3,922 11,078 15,000 3,922 11,078 (15,000) - 15,000 15,000 (15,000) 15,000 (15,000) Page1108 City of Clermont, Florida Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Year ended September 30, 2021 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Investment earnings $ 2,400 $ 2,400 $ 602 $ (1,798) Total revenues 2,400 2,400 602 (1,798) Expenditures: Debt Service: Principal 2,114,174 2,114,174 2,114,206 (32) Interest and fiscal charges 693,681 693,681 693,685 (4) Total expenditures 2,807,855 2,807,855 2,807,891 (36) Excess (deficiency) of revenues over expenditures (2,805,455) (2,805,455) (2,807,289) (1,834) Other Financing Sources: Transfers in 2,832,993 2,832,993 2,833,008 15 Total other financing sources 2,832,993 2,832,993 2,833,008 15 Net Change in Fund Balances 27,538 27,538 25,719 (1,819) Fund Balances - beginning 1,807,978 1,807,978 1,807,978 Fund Balances - ending $ 1,835,516 $ 1,835,516 $ 1,833,697 $ (1,819) Page1109 City of Clermont, Florida Fiduciary Funds Year Ended September 30, 2021 Agency funds are used to account for short-term custodial collections on resources on behalf of another individual, entity, or government. Pension Trust Funds General Employees' Pension Trust Fund To account for the accumulation of resources to be used for retirement annuity payments at the appropriate amounts and times in the future. Resources are contributed at rates in accordance with an actuarial study. Police Officers' Pension Trust Fund To account for the accumulation of resources to be used for the retirement annuities of all police officers. The state contributes money based upon the insurance premiums and the City contributes an amount determined by an actuarial study. Firefighters' Pension Trust Fund To account for the accumulation of resources to be used for the retirement annuities of all firefighters. The state contributes money based upon the fire insurance premiums and the City contributes an amount determined by an actuarial study. Page1110 City of Clermont, Florida Combining Statement of Fiduciary Net Position Fiduciary Funds September 30, 2021 General Police Employees Officers Firefighters Total Defined Pension Pension Employee Benefit Trust Trust Pension Funds Assets: Cash and cash equivalents $ 2,006 $ 643,785 $ 1,165,022 $ 1,810,813 Investments at fair value: U.S. Government & other debt securities 89,692 10,138,005 10,424,538 20,652,235 Equities 194,857 19,962,465 19,511,951 39,669,273 Total Investments 284,549 30,100,470 29,936,489 60,321,508 Total assets 286,555 30,744,255 31,101,511 62,132,321 Liabilities: Refunds payable and other - 1,441 8,928 10,369 Pending trade payables 7,860 607,657 615,517 Total liabilities - 9,301 616,585 625,886 Net Position Restricted for Pensions $ 286,555 $ 30,734,954 $ 30,484,926 $ 61,506,435 Page1111 City of Clermont, Florida Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds Year Ended September 30, 2021 Additions: Contributions: Employer Plan members State Total contributions Investment earnings: Net increase (decrease) in fair value of investments Interest and dividends Less: Investment expense Total net investment earnings Total additions Deductions: Benefits/distributions Refund of contributions Administrative expenses Total deductions Change in Net Position Net Position Restricted for Pensions General Police Employees Officers Firefighters Total Defined Pension Pension Employee Benefit Trust Trust Pension Funds $ 5,582 $ 787,031 $ 1,419,947 $ 2,212,560 - 268,568 316,273 584,841 - 379,293 221,613 600,906 5,582 1,434,892 1,957,833 3,398,307 51,033 4,627,009 4,436,301 9,114,343 - 707,141 682,237 1,389,378 - (23,400) (20,600) (44,000) 51,033 5,310,750 5,097,938 10,459,721 56,615 6,745,642 7,055,771 13,858,028 38,315 709,190 273,693 1,021,198 - 20,526 15,434 35,960 5,325 59,823 83,741 148,889 43,640 789,539 372,868 1,206,047 12,975 5,956,103 6,682,903 12,651,981 Beginning of Year * 273,580 24,778,851 23,802,023 48,854,454 End of Year $ 286,555 $ 30,734,954 $ 30,484,926 $ 61,506,435 * Balance doesn't include $9,714,707 from the general employee defined contribution plan, excluded per Note 1 Page1112 STATISTICAL SECTION Page1113 n Page1114 City of Clermont, Florida Statistical Section Year Ended September 30, 2021 This part of the City of Clermont's comprehensive annual financial report presents detailed information as a context for understanding what the information says about the government's overall financial health. Contents Page Financial Trends 116 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 126 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 131 These schedules present information to help the reader assess the affordability of the government's current level of outstanding debt and the government's ability to issue additional debt in the future. Note: there are no limitations placed upon the amount of debt the City of Clermont may issue either by the City Charter of the City's Code of Ordinances or by Florida Statutes. Note: The City of Clermont has no general obligation bonds outstanding. Demographic and Economic Information 138 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 142 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules are derived from the comprehensive annual reports for the relevant year. Page1115 City of Clermont, Florida Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Fiscal Year 2012 2013 2014 2015 2016 Governmental activities Net investment in capital assets $ 36,612 $ 39,950 $ 44,116 $ 47,718 $ 52,064 Restricted 8,876 9,490 9,918 9,400 6,402 Unrestricted 9,701 7,723 5,719 11,649 11,182 Total governmental activities net position $ 55,189 $ 57,163 $ 59,753 $ 68,767 $ 69,648 Business -type activities Net investment in capital assets 57,241 57,863 56,680 56,586 60,150 Restricted 9,477 9,536 10,217 12,135 13,959 Unrestricted 20,436 24,191 27,054 26,943 26,050 Total business -type activities net position $ 87,154 $ 91,590 $ 93,951 $ 95,664 $ 100,159 Primary government Net investment in capital assets 93,853 97,813 100,796 104,304 112,214 Restricted 18,353 19,026 20,135 21,535 20,361 Unrestricted 30,137 31,914 32,773 38,592 37,232 Total primary government net position $ 142,343 $ 148,753 $ 153,704 $ 164,431 $ 169,807 Page1116 Fiscal Year 2017 2018 2019 2020 2021 $ 31,918 $ 35,262 $ 40,318 $ 44,045 $ 51,596 7,815 8,547 9,589 12,479 14,910 30,117 27,925 24,795 23,874 21,847 $ 69,850 $ 71,734 $ 74,702 $ 80,398 $ 88,353 63,131 69,322 66,104 68,310 88,520 17,127 16,904 20,362 24,195 25,420 26,667 23,959 28,286 28,728 28,555 $ 106,925 $ 110,185 $ 114,752 $ 121,233 $ 142,495 95,049 104,584 106,422 112,355 140,116 24,942 25,451 29,951 36,674 40,330 56,784 51,884 53,081 52,602 50,402 $ 176,775 $ 181,919 $ 189,454 $ 201,631 $ 230,848 Page1117 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 Fiscal Year 2012 2013 2014 2015 2016 $ 4,211 $ 3,258 $ 3,407 $ 3,848 $ 4,157 12,168 12,685 14,117 14,326 17,381 248 303 350 453 788 1,719 1,725 2,202 2,094 2,185 116 200 363 567 209 1,045 1,928 3,096 4,018 5,460 137 87 236 193 355 19,644 20,186 23,771 25,499 30,535 4,052 4,154 4,589 4,823 4,719 5,752 6,106 6,437 6,571 6,866 2,567 2,465 2,472 3,133 2,925 939 897 1,016 1,080 1,142 13,310 13,622 14,514 15,607 15,652 $ 32,954 $ 33,808 $ 38,285 $ 41,106 $ 46,187 $ 1,649 $ 2,117 $ 2,429 $ 2,356 $ 2,914 450 1,040 1,366 1,684 1,574 604 1,262 956 1,317 1,552 1,191 896 939 1,598 1,822 27 112 1,718 498 163 3,921 5,427 7,408 7,453 8,025 5,099 5,215 5,362 5,726 6,162 5,154 5,357 5,585 5,809 6,183 2,721 2,775 2,869 2,917 2,984 855 862 881 905 955 - - - 276 24 1,752 3,430 2,417 3,219 4,026 15,581 17,639 17,114 18,852 20,334 $ 19,502 $ 23,066 $ 24,522 $ 26,305 $ 28,359 Page1118 Fiscal Year 2017 2018 2019 2020 2021 $ 4,240 $ 2,870 $ 5,023 $ 5,678 $ 5,918 20,297 20,306 22,104 22,733 23,713 805 2,104 863 2,470 2,763 2,009 2,255 2,387 1,843 2,264 1,197 385 532 847 665 4,491 5,752 5,954 3,722 4,044 434 839 836 753 687 33,473 34,511 37,699 38,046 40,054 5,199 5,634 6,215 6,425 7,110 6,909 6,849 7,373 7,742 8,172 2,869 3,073 3,027 3,294 3,467 1,190 1,360 1,614 1,901 1,991 16,167 16,916 18,229 19,362 20,740 $ 49,640 $ 51,427 $ 55,928 $ 57,408 $ 60,794 $ 3,180 $ 3,874 $ 3,590 $ 3,377 $ 4,250 1,506 1,344 1,593 1,854 1,778 2,003 1,697 1,801 2,088 2,319 1,456 2,233 2,061 3,307 2,026 309 428 625 625 2,206 8,454 9,576 9,670 11,251 12,579 6,516 6,461 6,868 7,631 8,466 6,507 6,625 6,989 7,573 8,074 3,089 3,178 3,264 3,562 3,785 1,004 1,378 1,598 1,695 1,783 - - 2,109 1 - 6,906 4,535 5,316 6,575 22,094 24,022 22,177 26,144 27,037 44,202 $ 32,476 $ 31,753 $ 35,814 $ 38,288 $ 56,781 Page1119 City of Clermont, Florida Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Fiscal Year 2012 2013 2014 2015 2016 Net (Expense)/Revenue Governmental activities $ (15,721) $ (14,759) $ (16,363) $ (18,045) $ (22,510) Business -type activities 2,271 4,018 2,600 3,245 4,683 Total primary government net expense $ (13,450) $ (10,741) $ (13,763) $ (14,800) $ (17,827) General Revenues and Other Changes in Net Position Governmental Activities: Taxes: Property taxes $ 5,535 $ 5,350 $ 6,533 $ 7,193 $ 8,998 Business taxes 113 111 126 130 140 Franchise taxes 2,189 2,123 2,379 2,502 2,712 Utility taxes 2,430 2,490 2,887 2,953 3,406 Intergovernmental -unrestricted 5,063 5,802 6,110 6,645 6,923 Unrestricted investment earnings 245 114 104 135 134 Gain (loss) on sale of capital assets - - - - 122 Miscellaneous 143 265 374 420 387 Transfers in/out 453 479 439 557 568 Special item - - - - - Total governmental activities 16,171 16,734 18,952 20,535 23,390 Business -type Activities: Unrestricted investment earnings 289 149 198 272 260 Gain (loss) on sale of capital assets - 18 2 (1,248) 120 Miscellaneous - - - - - Transfers in/out (453) (479) (439) (557) (568) Total business -type activities (164) (312) (239) (1,533) (188) Total primary government $ 16,007 $ 16,422 $ 18,713 $ 19,002 $ 23,202 Change in Net Position Governmental activities $ 450 $ 1,975 $ 2,589 $ 2,490 $ 880 Business -type activities 2,107 3,706 2,361 1,712 4,495 Total primary government $ 2,557 $ 5,681 $ 4,950 $ 4,202 $ 5,375 "Business taxes previously reported as General Government Charges for Services Page1120 Fiscal Year 2017 2018 2019 2020 2021 $ (25,019) $ (24,935) $ (28,029) $ (26,795) $ (27,477) 7,855 5,260 5,230 7,675 23,462 $ (17,164) $ (19,675) $ (22,799) $ (19,120) $ (4,015) $ 9,748 $ 10,747 $ 11,945 $ 13,090 $ 14,354 133 160 157 162 144 2,619 2,817 3,142 3,203 3,360 3,328 3,446 3,873 4,202 4,467 7,257 7,864 8,139 8,403 9,969 197 458 1,089 632 70 86 289 193 - - 486 342 352 623 721 1,367 2,013 2,106 2,177 2,346 25,221 28,136 30,996 32,492 35,431 255 379 1,295 953 106 24 31 150 29 40 (1,367) (2,013) (2,106) (2,177) (2,346) (1,088) (1,603) (661) (1,195) (2,200) $ 24,133 $ 26,533 $ 30,335 $ 31,297 $ 33,231 $ 202 $ 3,202 $ 2,968 $ 5,697 $ 7,954 6,767 3,657 4,568 6,480 21,262 $ 6,969 $ 6,859 $ 7,536 $ 12,177 $ 29,216 Page1121 City of Clermont, Florida Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) Fiscal Year 2012 2013 2014 2015 2016 General Fund Reserved $ - $ - $ $ - $ Unreserved - - - Nonspendable 195 189 53 1,300 548 Restricted 224 257 312 247 259 Assigned 1,039 765 1,202 304 - Unassigned 9,744 8,878 7,669 7,014 7,886 Total general fund $ 11,202 $ 10,089 $ 9,236 $ 8,865 $ 8,693 All other governmental funds Reserved $ - $ - $ - $ - $ - Unreserved, reported in: Special revenue funds - - - Capital projects fund - - - - - Nonspendable 890 939 1,064 1,466 1,922 Restricted 7,763 8,295 8,604 7,659 4,310 Assigned 668 - - - 1,226 Unassigned - - - - - Total all other governmental funds $ 9,321 $ 9,234 $ 9,668 $ 9,125 $ 7,458 Page1122 Fiscal Year 2017 2018 2019 2020 2021 578 641 283 356 453 266 228 205 359 448 3 3 18 3,227 1,390 7,137 7,104 8,182 7,859 11,617 $ 7,984 $ 7,976 $ 8,688 $ 11,801 $ 13,908 1,683 4 7 9 13 5,885 8,361 9,376 12,111 14,450 22,621 21,720 18,700 15,476 11,215 $ 30,189 $ 30,085 $ 28,083 $ 27,596 $ 25,678 Page1123 City of Clermont, Florida Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) Fiscal Year 2012 2013 2014 2015 2016 Revenues Taxes $ 8,079 $ 7,951 $ 9,546 $ 10,275 $ 12,544 Franchise fees 2,188 2,123 2,379 2,502 2,712 Licenses and permits 455 884 941 788 1,298 Intergovernmental 6,310 6,729 8,796 8,772 8,790 Charges for services 1,011 1,085 1,212 1,312 1,652 Fines and forfeitures 215 172 589 757 703 Impact fees/special assessments 679 1,909 1,401 1,858 1,702 Investment Earnings 244 108 99 131 131 Miscellaneous 474 622 915 1,047 1,007 Total revenues 19,655 21,583 25,878 27,442 30,539 Expenditures Current: General government 3,080 3,148 3,776 3,600 4,070 Public safety 11,352 12,579 13,571 14,844 17,520 Physical environment 247 307 423 744 777 Transportation 1,340 1,263 1,635 1,635 1,878 Economic environment 641 722 365 564 482 Human services - - - - - Culture and recreation 1,769 2,014 2,948 3,725 5,038 Capital outlay 2,073 2,638 9,381 2,695 8,514 Debt service: Principal 490 3,080 571 884 6,280 Interest 143 122 177 198 342 Total expenditures 21,135 25,873 32,847 28,889 44,901 Excess (deficiency) of revenues over expenditures (1,480) (4,290) (6,969) (1,447) (14,362) Other financing sources (uses) Transfers in 1,118 3,091 9,337 3,857 11,897 Transfers out (644) (2,612) (8,788) (3,323) (11,329) Refunding and new bonds issued - 2,612 6,000 - 10,631 Capital Leases - - - - - Sale of capital assets - - - - 1,321 Total other financing sources (uses) 474 3,091 6,549 534 12,520 Net change in fund balances $ (1,006) $ (1,199) $ (420) $ (913) $ (1,842) Debt service as a percentage of noncapital expenditures 3.5% 14.9% 3.5% 4.5% 20.2% Note: Franchise Fees previously reported as Taxes. **Note: Increase in % due to refunding of 2002 bonds. Without the refunding the % would be 3.4 % in 2013 ***Note: Increase in % due to refunding of 2013 bonds. Without the refunding the % would be 4.9% in 2016 Page1124 Fiscal Year 2017 2018 2019 2020 2021 $ 13,208 $ 14,353 $ 15,974 $ 17,453 $ 18,964 2,619 2,817 3,142 3,202 3,360 1,594 2,249 1,927 1,691 2,259 9,054 10,559 10,860 12,342 12,245 1,746 2,103 2,188 2,483 2,825 358 204 230 241 176 2,341 1,738 1,959 2,530 2,457 192 446 1,065 615 69 1,122 971 965 978 1,370 32,234 35,440 38,310 41,535 43,725 3,911 3,948 4,609 4,892 5,750 18,488 19,750 21,618 21,452 24,291 869 881 982 2,550 2,748 1,687 1,927 2,165 1,546 2,072 324 343 372 786 608 5,996 5,199 6,302 2,901 3,027 2,112 4,085 3,846 4,070 4,517 1,077 979 2,096 2,147 2,202 272 805 829 772 711 34,736 37,917 42,819 41,116 45,926 (2,502) (2,477) (4,509) 419 26,725 7,697 4,937 5,152 (25,957) (6,332) (2,834) (2,974) 23,670 - - - - - 919 - 86 1,000 198 29 24,524 2,365 3,220 2,207 $ 22,022 $ (112) $ (1,289) $ 2,626 4.6% 5.7% 8.3% 8.2% (2,201) 5,179 (2,833) 44 2,390 $ 189 7.2% Page1125 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 Year Tax Tax Tax Fees 2012 5,535 2,430 113 2,189 2013 5,350 2,490 ill 2,123 2014 6,533 2,887 126 2,379 2015 7,013 2,953 130 2,502 2016 8,795 3,406 140 2,712 2017 9,538 3,328 133 2,619 2018 10,549 3,446 160 2,817 2019 11,747 3,872 157 3,142 2020 12,880 4,202 162 3,203 2021 14,354 4,467 144 3,360 Taxes Included in Unrestricted Intergovernmental Revenues Fiscal Sales State Revenue Local Option Year Tax Sharing Gas Tax Total 2012 1,296 383 296 1,975 2013 1,419 535 280 2,234 2014 1,567 635 290 2,492 2015 1,820 749 378 2,947 2016 1,848 819 482 3,149 2017 1,945 911 520 3,376 2018 2,172 1,013 548 3,733 2019 2,236 1,116 551 3,903 2020 2,345 1,053 522 3,920 2021 2,806 1,386 537 4,729 * Business Tax Receipts previously reported under Licenses Total 10,267 10,074 11,925 12,598 15,053 15,618 16,972 18,918 20,447 22,325 Page1126 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 2012 2,171,815 209,726 598,187 1,783,354 3.1420 2,381,541 74.88% 2013 2,124,017 206,870 605,114 1,725,773 3.1420 2,330,887 74.04% 2014 2,185,702 205,140 611,063 1,779,779 3.7290 2,390,842 74.44% 2015 2,336,882 207,024 630,762 1,913,144 3.7290 2,543,906 75.20% 2016 2,574,360 215,752 652,769 2,137,343 4.2061 2,790,112 76.60% 2017 2,791,963 215,772 689,683 2,318,052 4.2061 3,007,735 77.07% 2018 3,057,114 233,448 724,930 2,565,632 4.2061 3,290,562 77.97% 2019 3,406,874 238,430 789,497 2,855,807 4.2061 3,645,304 78.34% 2020 3,723,782 247,430 848,948 3,122,264 4.2061 3,971,212 78.62% 2021 4,070,776 262,371 899,129 3,434,018 4.2061 4,333,147 79.25% Source: Lake County Property Appraisers Office * Information on breakdown of residential and commercial property is not available. Page1127 City of Clermont, Florida Property Tax Rates Direct and Overlapping' Governments Last Ten Fiscal YearS2 (per $1,000 of assessed value) 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 3 Authority District Rates 2012 3.1420 4.7309 0.1101 0.3853 7.3940 0.8000 0.2405 0.3313 17.1341 2013 3.1420 4.7309 0.1900 0.3853 7.3200 0.8000 0.2554 0.3313 17.1549 2014 3.7290 4.7309 0.1900 0.3853 7.1700 0.7900 0.2554 0.3283 17.5789 2015 3.7290 5.3856 0.1600 0.4629 7.2460 0.7633 0.2554 0.3164 18.3186 2016 4.2061 5.3051 0.1600 0.4629 7.1970 0.7633 0.2554 0.3023 18.6521 2017 4.2061 5.1180 0.1524 0.4629 6.8750 0.7332 0.2554 0.2885 18.0915 2018 4.2061 5.1180 0.1524 0.4629 6.6030 0.6898 0.2554 0.2724 17.7600 2019 4.2061 5.1180 0.1324 0.4629 6.3550 0.6432 0.4900 0.2562 17.6638 2020 4.2061 5.0734 0.1100 0.4629 6.8830 0.5886 0.3557 0.2414 17.9211 2021 4.2061 5.0327 0.1100 0.4629 6.6990 - 0.3368 0.2287 17.0762 Source: Lake County Property Appraisers Office Overlapping rates are those of local and county governments that apply to property owners within the City of Clermont. 2 Taxes levied for the fiscal year are based on the prior year taxable value. Operating millage is the only component of the City's direct rate 3 South Lake Hospital Tax District dissolved, effective Fiscal Year 2021. Page1128 City of Clermont, Florida Principal Property Taxpayers Current Year and Nine Years Ago (amounts expressed in thousands) 2021 2012 Percentage of Percentage of Taxable Total Taxable Taxable Total Taxable Assessed Assessed Assessed Assessed Taxpaver Value Rank Value Value Rank Value Vista at Lost Lake TIC I LLC 66,957 1 1.95% BR Citrus Tower LLC 48,966 2 1.43% Advenir at Castle Hill LLC 44,887 3 1.31 % John P. Adams & Ann D. Adams Family LP 39,940 4 1.16% 26,014 1 1.46% South Lake Hospital, Inc. 39,692 5 1.16% 12,012 6 0.67% US 27-Clermont LLC 36,788 6 1.07% Westdale Sundance LTD 29,495 7 0.86% 16,387 3 0.92% Clermont Landing LLC 23,655 8 0.69% Weingarten 1-4 Clermont Landing 20,580 9 0.60% 12,293 5 0.69% Senninger Irrigation, Inc. 17,819 10 0.52% Fountains at Clermont LLC 17,332 2 0.97% Citrus Tower Development 14,386 4 0.81 % Village at East Lake 11,655 7 0.65% Progress Energy Florida, Inc 10,730 8 0.60% Wal-Mart Stores East LP 10,106 9 0.57% Target Corporation 9,236 10 0.52% TOTAL $ 368,779 10.74% $140,151 7.86% Source: Lake County Property Appraiser Page1129 City of Clermont, Florida Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Collected within the Year Total Tax Fiscal Year of the Levy Collections in Total Collections to Date Ended Levy for Percentage Subsequent Percentage September Fiscal Year Amount of Levy Years Amount of Levy 2012 5,603 5,325 95.0% 5 5,330 95.1 % 2013 5,422 5,153 95.0% 8 5,161 95.2% 2014 6,635 6,325 95.3% 9 6,334 95.5% 2015 7,133 6,793 95.2% 6 6,799 95.3% 2016 8,990 8,570 95.3% 4 8,574 95.4% 2017 9,750 9,299 95.4% 9 9,308 95.5% 2018 10,791 10,278 95.2% 6 10,284 95.3% 2019 12,012 11,430 95.2% 5 11,435 95.2% 2020 13,133 12,471 95.0% 7 12,478 95.0% 2021 14,444 13,677 94.7% 1 13,678 94.7% Note: Property taxes become due and payable on November 1 st of each year. A four (4) percent discount is allowed if the taxes are paid in November, with the discount declining by one (1) percent each month thereafter. Accordingly, taxes collected will never be 100 percent of the tax levy. Page1130 City of Clermont, Florida Ratios of Outstanding Debt by Type Last Ten Fiscal Years (amounts expressed in thousands, except per capita amount) Fiscal Governmental Activities Year Ended Revenue Capital Notes Sept Bonds Leases Payable 2012 $ 3,080 $ - $ - 2013 - - 2,612 2014 - 8,041 2015 - 7,157 2016 - 11,509 2017 - 34,102 2018 - 33,123 2019 838 31,109 2020 754 29,045 2021 666 26,930 Business -Type Activities Total Percentage Revenue Notes Outstanding of Personal Bonds Payable Debt Income' $ 14,963 $ $ 18,043 $ 0 14,979 - 17,591 2.19% 14,361 - 22,402 2.74% 13,728 - 20,885 2.45% 13,075 - 24,584 2.40% 12,403 6,329 52,834 4.87% 12,268 6,329 51,720 4.22% 11,467 5,980 49,394 3.76% 10,634 5,621 46,054 3.45% 9,779 5,253 42,628 2.72% 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 138 for personal income and population data. Per Capital $ 605 582 706 646 709 1,476 1,329 1,212 1,040 954 Page1131 City of Clermont, Florida Direct and Overlapping Governmental Activities Debt September 30, 2021 (amounts expressed in thousands, except population and per capita amount) Estimated Amount Debt Percentage Applicable to Government Unit: Outstanding Applicable (1) City of Clermont Lake County $ 105,354 14.02% $ 14,771 Lake County School District 162,512 12.55% $ 20,395 Subtotal, overlapping debt 35,166 City of Clermont, direct debt 27,596 100.00% 27,596 Total direct and overlapping debt $ 62,762 Sources: Lake County 2020 Comprenhesive Annual Financial Report, Lake County School Board 2020 Comprenhesive Annual Financial Report, and Lake County Property Appraiser's Office The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of Lake County's taxable assessed value that is within the City of Clermont's boundaries and dividing it by Lake County's total taxable assessed value. Notes: Overlapping governments are those that coincide, at least in part, with geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the property taxpayers of the City of Clermont. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the property taxpayers should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. The City of Clermont has no legal debt margin. Page1132 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Public Improvement Revenue Refunding Note, Series 2012 Public Communications Total Revenue Fiscal Service Service Half -Cent Available for Debt Service Year Taxes Tax Sales Tax Debt Service Principal Interest Coverage 2012 2,430,440 1,257,217 1,295,687 4,983,344 490,000 143,350 7.87 2013 2,490,461 1,349,929 1,418,710 5,259,100 3,080,000 66,550 1.67 2014 2,887,161 1,216,076 1,567,249 5,670,486 570,599 25,361 9.51 2015 2,952,785 1,161,566 1,819,909 5,934,260 577,959 19,101 9.94 2016 3,405,642 1,138,032 1,848,294 6,391,968 585,609 12,760 10.68 2017 3,328,087 1,122,258 1,945,237 6,395,582 591,692 6,345 10.69 2018 3,446,407 1,112,440 2,172,025 6,730,872 286,141 1,559 23.40 2019 3,872,099 1,131,382 2,235,693 7,239,174 ** ** ** 2020 4,201,714 1,232,777 2,344,875 7,779,366 ** ** ** 2021 4,466,642 1,327,089 2,806,160 8,599,891 ** ** ** 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. This Note was paid off in fiscal year 2018 Page1133 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Public Improvement Revenue Refunding Note, Series 2016 Public Communications Total Revenue Fiscal Service Service Available for Year Taxes Tax Debt Service 2012 - - - 2013 - - - 2014 2,887,161 1,216,076 4,103,237 2015 2,952,785 1,161,566 4,114,351 2016 3,405,642 1,138,032 4,543,674 2017 3,328,087 1,122,258 4,450,345 2018 3,446,407 1,112,440 4,558,847 2019 3,872,099 1,131,382 5,003,481 2020 4,201,714 1,232,777 5,434,491 2021 4,466,642 1,327,089 5,793,731 Debt Service Principal Interest Coverage - - N/A - - N/A - 82,350 49.83 305,772 178,337 8.50 5,694,228 195,148 0.77 255,000 105,635 12.34 377,841 99,212 9.56 385,511 91,464 10.49 393,337 83,558 11.40 401,322 75,493 12.15 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. * Public Improvement Revenue Note, Series 2013 was refunded in 2016, this includes the payoff of the original bonds. Page1134 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Infrastructure Sales Surtax Revenue Note, Series 2016 Infrastructure Fiscal Sales Debt Service Year Surtax Principal Interest Coverage 2012 - - - N/A 2013 - - - N/A 2014 - - - N/A 2015 - - - N/A 2016 2,964,966 - 27,466 107.95 2017 3,115,549 230,716 109,914 9.15 2018 3,397,707 314,809 104,132 8.11 2019 3,474,813 321,483 97,387 8.30 2020 3,603,194 328,298 90,499 8.60 2021 4,182,726 335,258 83,466 9.99 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Page1135 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Master Plan Capital Projects Revenue Note, Series 2017 Infrastructure Recreation Total Revenue Fiscal Sales Impact Stormwater Sanitation Available for Debt Service Year Surtax Fees Fees Fees Debt Service Principal Interest Coverage 2012 N/A 2013 N/A 2014 N/A 2015 N/A 2016 - - - - - N/A 2017 3,115,549 1,495,242 1,002,859 3,087,701 8,701,352 - N/A 2018 3,397,707 1,047,736 1,375,516 3,176,721 8,997,680 - 749,550 12.00 2019 3,474,813 1,157,840 1,596,720 3,263,253 9,492,626 1,657,000 767,210 3.92 2020 3,603,194 1,529,037 1,695,361 3,550,386 10,377,978 1,701,000 723,053 4.28 2021 4,182,726 1,661,798 1,782,926 3,784,598 11,412,048 1,746,000 677,725 4.71 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Page1136 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Water and Sewer Revenue and Refunding Bonds Water and Water and Sewer Sewer Net Revenue Fiscal Operating Operating Available for Debt Service Year Revenues' Expenses2 Debt Service Principal Interest Coverage 2012 10,496,535 6,377,695 4,118,840 580,000 643,307 3.37 2013 10,687,908 6,677,774 4,010,134 595,000 604,811 3.34 2014 11,108,744 7,090,566 4,018,178 615,000 586,461 3.34 2015 11,767,901 7,419,231 4,348,670 630,000 567,636 3.63 2016 12,578,644 7,272,716 5,305,928 650,000 548,236 4.43 2017 13,226,994 7,661,085 5,565,909 670,000 504,122 4.74 2018 13,379,152 8,104,464 5,274,688 10,920'000 3 211,101 0.47 2019 15,017,621 8,753,924 6,263,697 800,000 294,524 5.72 2020 16,069,244 9,069,911 6,999,333 828,000 267,058 6.39 2021 16,629,593 9,958,948 6,670,645 855,000 242,915 6.08 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. ' Operating revenue is computed per bond resolution requirements. Investment earnings are included. 2Operating expense is computed per bond resolution requirements. Depreciation expense is not included. 3 Water and Sewer Revenue Refunding Bonds, Series 2009 was partially refunded in 2017, this includes the payoff of the original bonds. Page1137 City of Clermont, Florida Demographic and Economic Statistics Last Ten Fiscal Years Personal Education Income Level in (amounts Per Capita Years of Fiscal expressed in Personal Median Formal School Unemploy- Year Population' thousands) Income Agee Schooling2 Enrollment3 ment Rate 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 8,436 4.8% 2016 34,667 1,023,959 29,537 42.1 13.4 8,712 4.4% 2017 35,807 1,085,991 30,329 41.6 13.3 8,761 3.1 % 2018 38,906 1,226,940 31,536 42.3 13.4 8,841 2.7% 2019 40,750 1,312,598 32,211 42.5 13.9 8,745 2.8% 2020 44,301 1,335,011 30,135 42.1 14.0 8,625 6.7% 2021 44,687 1,405,049 31,442 42.2 14.0 9,040 3.7% Sources: ' College of Business Administration, University of Florida - Bureau of Economic and Business Research 2 Metro Orlando Economic Development Commission 3 Lake County School Board 4 U.S. Department of Labor, Bureau of Labor Statistics Page1138 City of Clermont, Florida Principal Employers Current Year and Nine Years Ago 2021 2012 Number Percentage of Number Percentage of of Total City of Total City Emolover Employees Rank Employment Employees Rank Employment Total City Employment 19,268 22,680 South Lake Hospital, Inc. 1,600 1 8.30% 1,114 1 4.91% Publix Supermarkets 991 2 5.14% 642 2 2.83% Lake County School System 714 3 3.71 % 340 3 1.50% City of Clermont 452 4 2.35% 257 7 1.13% Walmart 392 5 2.03% 306 6 1.35% Lowe's 356 6 1.85% 320 4 1.41 % Target Corporation 334 7 1.73% 310 5 1.37% Senningers 210 8 1.09% Clermont Health & Rehab 180 9 0.93% Chick Fil A 170 10 0.88% Lake County Sheriffs Office 0.00% Winn Dixie 207 8 0.91% Progressive Plumbing Inc. 200 9 0.88% Westminister Care of Clermont 175 10 0.77% TOTAL 5,399 28.02% 3,871 17.07% Source: Various employers in city limits & Bureau of Labor Statistics (BLS) of the U.S. Department of Labor Note - FY 2021 data was not available, thus FY 2020 data is displayed. In the City's estimation, the figures did not change significantly. Page1139 Emplover Kings Ridge Esplanade at Highland Ranch Taylor Morrison City of Clermont SLMH Heritage Hills of Clermont HOA Vista at Lost Lake TIC I LLC Orlando VP LLC Pulte Home Company LLC Mattamy Homes Lake County School System Westminster Comm Care Svcs Gardens at Citrus Towers Sundance Clermont Apartments Village at East Lake Apartments LTD Osprey Ridge Apartments LTD TOTAL City of Clermont, Florida Principal Water Customers Current Year and Nine Years Ago 2021 2012 Usage Percentage of Usage Percentage of (thousands Total City (thousands Total City of gallons) Rank Metered Flow' of gallons) Rank Metered Flow 156,726 1 4.39% 262,412 1 10.97% 107,904 2 3.02% 54,485 3 1.53% 36,330 4 1.02% 51,830 2 2.17% 35,952 5 1.01 % 32,481 3 1.36% 26,998 6 0.76% 19,691 7 0.55% 8,646 10 0.36% 18,376 8 0.51 % 18,002 9 0.50% 17,297 10 0.48% 25,853 4 1.08% 15,314 5 0.64% 12,505 6 0.52% 11,483 7 0.48% 11,087 8 0.46% 8,799 9 0.37% 491,761 13.78% 440,410 18.42% The City of Clermont had a total metered water flow of approximately 3,568,993 gallons for the 12-month period ending September 30, 2021 Page1140 City of Clermont, Florida Principal Sewer Customers Current Year and Nine Years Ago 2021 2012 Usage Percentage of Usage Percentage of (thousands Total City (thousands Total City Emplover of gallons) Rank Metered Flow' of gallons) Rank Metered Flow SLMH 29,484 1 2.62% 32,481 1 2.34% Town of Oakland 22,080 2 1.96% Orlando VP LLC 18,376 3 1.63% Clermont TT LLC 11,954 4 1.06% Vista at Lost Lake West 10,315 5 0.92% Westminster Comm Care Service 10,142 6 0.90% 14,654 3 Vista at Lost Lake East 9,376 7 0.83% 8,646 5 0.62% Carwash Headquarters 9,104 8 0.81 % Mister Car Wash 6,890 9 0.61 % BJ Wholewale 6,797 10 0.60% Lake County Schools 17,651 2 1.27% Villages at East Lake 11,087 4 0.80% Emerald Lakes of Clermont 8,456 6 0.61 % City of Clermont 7,688 7 0.55% Hwy 27 17156 LLC (BP) 5,624 8 0.41 % Oak Ridge Apartments 4,604 9 0.33% Lost Lake Apartments 3,996 10 0.29% TOTAL 134,518 11.93% 114,887 8.29% The City of Clermont had a total metered water flow for wastewater billing purposes of approximately 1,127,203 gallons for the 12-month period ending September 30, 2021 Page1141 City of Clermont, Florida Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Function General Government Public Safety: Police Sworn personnel Non sworn personnel Fire Firefighters Other personnel Building Services Physical Environment Transportation Human Services Culture & Recreation Water Sewer Stormwater Sanitation Total Source: City of Clermont Finance Department Full-time Equivalent Employees as of September 30 2012 2013 2014 2015 2016 25.85 26.66 31.56 36.00 36.00 57.00 57.00 61.00 61.00 66.00 5.00 6.00 6.00 6.00 6.00 47.80 47.80 56.80 56.80 59.80 2.00 2.00 5.20 4.20 4.20 0.60 0.60 6.00 6.00 7.00 4.00 4.95 4.70 7.45 8.70 14.80 14.65 12.95 12.85 12.60 0.00 0.00 0.00 0.00 0.00 21.20 21.10 27.25 33.35 35.35 29.45 29.66 30.61 29.35 29.65 24.50 23.78 23.88 24.15 26.45 7.95 6.72 6.87 6.65 7.75 16.85 17.08 17.18 18.20 18.50 257.00 258.00 290.00 302.00 318.00 Page1142 Full-time Equivalent Employees as of September 30 2017 2018 2019 2020 2021 38.70 41.45 49.50 48.90 49.90 70.00 79.00 81.00 86.00 88.00 6.00 7.00 7.00 7.00 8.00 66.50 74.20 81.00 81.00 81.00 6.50 8.80 8.00 8.00 8.00 11.30 11.55 12.30 13.55 14.55 10.70 10.70 10.70 9.65 9.65 14.60 16.60 11.9 11.73 11.73 0.00 0.00 0.00 0.00 0.00 39.35 40.60 37.50 39.22 39.22 29.15 30.45 30.55 32.70 36.70 26.95 31.25 31.40 32.50 34.50 10.25 10.10 13.85 13.95 13.95 21.00 21.30 21.30 20.80 20.80 351.00 383.00 396.00 405.00 416.00 Page1143 City of Clermont, Florida Operating Indicators by Function Last Ten Fiscal Years Fiscal Year Function 2012 2013 2014 2015 2016 General Government Municipal boundary (square miles) 14.95 14.95 15.18 16.65 16.78 Business Tax Receipts issued 2,237 2,483 1,955 1,701 1,639 A/P Checks issued 2,336 2,288 3,529 2,747 3,276 Commercial construction (units) 8 20 15 16 20 Commercial construction (value in thousands) 15,203 34,268 17,288 8,625 42,241 Residential construction (units) 173 327 572 323 740 Residential construction (value in thousands) 25,882 53,055 62,117 55,178 103,423 Public Safety: Police Auto accidents 1,259 1,402 1,357 1,573 1,909 Physical arrests 644 886 631 652 589 911 calls received 5,911 6,352 6,643 7,618 6,397 Evidence processed (pieces) 1,413 2,930 2,384 989 674 Parking violations 201 252 379 144 181 Traffic violations 5,389 7,225 4,623 6,879 7,421 Fire Volunteer firefighters 6 - - - - Fire inspections completed 662 1,240 3,766 3,813 4,468 Emergency calls answered 3,320 3,414 4,127 4,202 6,001 Non -emergency calls answered 934 447 987 523 806 Water Residential accounts 18,619 19,399 19,670 13,242 • 13,561 Commercial accounts 1,207 1,232 1,234 1,211 1,220 Annual water usage (thousands of gallons) 2,391,485 2,392,022 2,406,183 2,521,397 2,572,852 Sewer Residential accounts 12,936 13,407 13,718 13,578 13,860 Commercial accounts 1,166 1,194 1,055 1,074 1,091 Sources: Various government departments. . Decrease in accounts due to software conversion combining multi -metered services Page1144 Fiscal Year 2017 2018 2019 2020 2021 16.78 17.12 19 19.1 19.2 1,633 1,623 1,585 1,572 1,968 3,651 3,872 3,859 3,543 3,846 14 20 15 10 16 13,302 42,042 30,862 13,695 52,737 433 387 377 428 591 87,873 104,394 87,927 92,541 110,912 1,909 1,802 2,082 1,780 1,673 593 569 663 632 590 6,809 7,943 9,185 8,703 9,880 1,165 1,040 1,821 1,331 1,787 385 147 101 319 403 6,713 4,676 4,790 4,340 3,394 2,586 2,203 2,493 2,445 3,112 6,828 5,689 5,367 6,199 6,549 925 989 1,493 814 1,593 14,339 14,805 15,311 15,882 16,283 1,235 1,498 1,283 1,283 1,344 2,743,657 2,687,665 2,816,071 3,090,626 3,568,993 14,619 15,198 15,669 16,330 17,670 1,106 1,107 1,126 1,135 1,342 Page1145 Function General Government Public Safety: Police Police stations Patrol units Fire Fire department facilities Staffed fire stations Fire hydrants Fire apparatus Staffed fire apparatus ALS non -transport units Transportation Streets paved (miles) Streetlights Culture & Recreation Number of parks Parks acreage Scenic linear trail (miles) Tennis courts Piers Boat ramp Water Miles of water mains Sewer Miles of sanitary sewers Miles of storm sewers Sources: Various government departments. Does not include private systems City of Clermont, Florida Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year 2012 2013 2014 2015 2016 1 1 1 1 1 46 55 57 79 95 4 4 4 3 4 3 3 3 3 4 2,048 2,120 2,146 2,200 2,646 8 8 8 12 6 5 5 5 3 6 4 4 4 3 1 133.20 173.91 191.52 202.38 210.00 3,103 3,103 3,127 3,158 3,160 23 23 23 23 23 349.5 349.5 349.5 378.0 443.9 5.7 5.7 5.7 5.7 7.5 9 9 9 9 9 4 5 5 10 11 1 1 1 1 1 242.36 243.14 222.75 230.28 229.44 156.81 160.42 161.25 167.60 168.57 105.38 109.05 133.70 48.22 47.63 Page1146 Fiscal Year 2017 2018 2019 2020 2021 1 1 1 1 1 98 104 106 107 106 5 5 5 5 5 4 4 4 4 4 2,646 2,646 2,456 2,456 2,456 7 9 9 9 9 6 7 7 7 7 6 6 7 7 9 210.60 210.60 210.60 210.60 210.60 1,309 1,309 1,309 1,309 1,309 24 24 24 24 24 443.9 443.9 443.9 443.9 443.9 7.5 8.0 8.0 8.0 8.0 9 9 9 9 9 11 9 9 9 9 1 1 1 1 1 297.00 297.81 331.86 334.98 354.16 220.00 224.00 236.34 238.58 254.61 47.56 48.36 50.38 50.38 51.46 Page1147 n Page1148 OTHER REPORTS Page 1 149 n Page1150 I 1 McDirmit Davis 934 North Magnolia Avenue, Suite 100 Orlando, Florida 32803 407-843-5406 www.mcdirmitdavis.com INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and 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, 2021, 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 21, 2023. 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) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of 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 that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. 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. We did identify certain deficiencies in internal control, described below that we consider to be significant deficiencies. ML 21-01 Timely and Regular Reconciliation of Accounts Balance sheet and other accounts should be reconciled timely, on a regular basis to detect incorrect or missing transactions. During our audit, we noted that several of the City's accounts, such as fixed assets, and pension accounts are not reconciled on a regular basis during the year, or in a timely manner after year end, causing a delay in the year end annual audit. Due to staffing limitations, account reconciliations were not performed timely. As a result, misstatements, whether due to fraud or error, would not be detected in a timely manner. We recommend that the City implement procedures to ensure accounts can be reconciled on a regular, ongoing basis throughout the year. Management Response The City's procedures will ensure that reconciliations are completed timely and will request outside actuarial reports meet the City's reporting timeframes for completion of these reconciliations. We have hired an outside CPA firm to assist with fixed asset reconciliations due to staffing limitations, this is an ongoing contract. the trusted partner Page1151 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 instances of noncompliance, or other matters that are required to be reported under Government Auditing Standards, and which are described below. MIL 21-02- Timely Completion of Annual Audit Florida Statutes require the annual audit to be submitted no later than nine month's after the City's fiscal year end. Due to staffing issues, and delays with account reconciliations, the audit was not able to be completed in a timely manner. We recommend the City implement procedures to insure annual audits are completed in a timely manner. Management Response The City has implemented the use of an outside CPA firm to assist with the reconciliations for completion of the audit in compliance with Florida Statutes. City's Response to Findings The City's response to the findings identified in our annual audit are included in this report. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on 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 21, 2023 Page1152 I 1 McDirmit Davis I MJ 934 North Magnolia Avenue, Suite 100 Orlando, Florida 32803 407-843-5406 www.mcdirmitdavis.com INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM GUIDANCE Honorable Mayor and City Council City of Clermont, Florida Report on Compliance for Each Major Federal Program We have audited the City of Clermont, Florida's (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended September 30, 2021. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs 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 the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 each of its major federal programs for the year ended September 30, 2021. 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 the Uniform Guidance, 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. the trusted partner Page1153 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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. �I M Orlando, Florida April 21, 2023 Page1154 City of Clermont, Florida Schedule of Expenditures of Federal Awards Year Ended September 30, 2021 Federal Grantor Pass -Through Grantor Grantor program title U.S. Department of Housing and Urban Development (HUD) State of Florida, Department of Economic Opportunity Community Development Block Grant (CDBG)' Total U.S. Department of Housing and Urban Development (HUD) U.S. Department of Transportation State of Florida, Department of Environmental Protection Recreational Trails Program Total U.S. Department of Transportation U.S. Department of Justice (DOJ) Equitable Sharing Bulletproof Vest Partnership State of Florida, Department of Law Enforcement Dirver Feedback Signs Civil Unreset/Mobile Field Force Equipment Lake County Mobile Crisis Response Officer Total U.S. Department of Justice (DOJ) U.S. Department of Treasury COVID- Coronavirus Relief Fund Coronavirus State and Local Fiscal Recovery Funds Total Department of Treasury Executive Office of the President -Office of National Drug Control Policy Seminole County Sheriff Office High Intensity Drug Trafficking Areas Organized Crime Drug Enforcement Task force Total Executive Office of the President -Office of National Drug Control Policy U.S. Department of Homeland Security (DHS) State of Florida, Department of Emergency Management Staffing for Adequate Fire and Emergency Response (SAFER) Total U.S. Department of Homeland Security (DHS) Total Expenditures of Federal Awards " Denotes a major program CFDA Agency or Pass -through Number Entity Grant Number Expenditures 14.228 19DB-ON-06-45-02-N17 $ 719,764 719,764 20.219 T18027 200,000 200,000 16.922 FL0350300 49,410 16.607 FY19 13,736 16.738 2020-JAGC-LAKE-1-Y5-156 8,363 16.738 2020-JAGC-LAKE-20-5R-112 7,469 16.745 BJA-2018-13605/13907 57,890 136,868 21.019 Agreement # Y2267 281,641 21.027 3,922 285,563 95.001 G18CF0008A 10,825 95.001 WG-CR-0017 626 11,451 97.083 EMW-2016-FH-00366 62,866 62,866 $ 1,416,512 See accompanying Notes to Schedule of Expenditures of Federal Awards. Page1155 City of Clermont, Florida Notes to Schedule of Expenditures of Federal Awards Year Ended September 30, 2021 NOTE 1 BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of the City of Clermont, Florida (the City) under programs of the federal government for the year ended September 30, 2021. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). 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, 2021, even if grant or loan was received subsequent to that date. Pass -through entity identifying numbers are presented where available. NOTE 3 INDIRECT COST RATE The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Page1156 City of Clermont, Florida Schedule of Findings and Questioned Costs Year Ended September 30, 2021 Section I - Summary of Independent Auditor's Results: Financial Statements Type of auditors' report issued: Internal control over financial reporting: • Material weakness identified? • Significant deficiency identified Noncompliance material to financial Statements noted? Federal Awards Type of auditors' report issued on compliance for major federal programs: Internal control over major Federal program: • Material weakness identified? • Significant deficiency identified Any audit findings disclosed that are required to be reported in accordance with section 200.516 of the Uniform Guidance? Identification of major federal awards Dollar threshold used to distinguish between type A and type B programs Auditee qualified as a low -risk auditee? Section II - Financial Statement Findings: Section III - Federal Award Findings and Questioned Costs: Section IV - Federal Award Summary Schedule of Prior Year Findings: Unmodified Yes X No X Yes _ None reported X Yes No Unmodified Yes X No Yes X None reported Yes X No CFDA No. 14.228 Community Development Block Grant $750,000 X Yes _ No None None There were no audit findings for the year ended September 30, 2020. Page1157 McDirmit Davis I MJ MANAGEMENT LETTER Honorable Mayor and City Council City of Clermont, Florida 934 North Magnolia Avenue, Suite 100 Orlando, Florida 32803 407-843-5406 www.mcdirmitdavis.com Report on the Financial Statements We have audited the financial statements of the City of Clermont, Florida, as of and for the fiscal year ended September 30, 2021, and have issued our report thereon dated April 21, 2023. 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; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); and Chapter 10.550, Rules of the Florida Auditor General. Other Reporting Requirements We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; Independent Auditor's Report on Compliance for Each Major Federal Program and State Project 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, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated April 21, 2023, 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. Corrective actions have been taken to address findings and recommendations made in the preceding financial audit report, except as noted below: Tabulation of Uncorrected Audit Findings Current Year Finding # 2019-20 FY Finding # 2018-19 FY Finding # ML 21-01 ML 20-01 N/A ML 21-02 ML 20-02 N/A Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information has been disclosed in the notes to the financial statements. Financial Condition and Management Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us apply appropriate procedures and communicate the results of our determination as to whether or not the City of Clermont, Florida has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the City of Clermont, Florida did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for the City. It is management's responsibility to monitor the City of Clermont, Florida's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. the trusted partner Page1158 Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of This Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the council, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. Orlando, Florida April 21, 2023 Page1159 934 North Magnolia Avenue, Suite 100 McDirmit Davis Orlando, Florida 32803 407-843-5406 www.mcdirmitdavis.com mj INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES The Honorable Mayor and City Council City of Clermont, Florida 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, 2021. 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, 2021. ►1, Orlando, Florida April 21, 2023 the trusted partner Page1160