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HomeMy WebLinkAbout1996 06 10 Regular Item D , FUNDING: C' RECOMMENDATION: The City Manager recommends the Commission to receive and adopt the report of the Auditor's on the FY 95 Audit and attached Management Letter and provide staff with direction it deems appropriate. IMPLEMENTA TION SCHEDULE: The resolution of Management Letter issues can be substantially corrected in FY 97 provided the Commission makes funds available in the FY 97 budget as proposed. ATTACHMENTS: A) Cooper & Lybrand's FY 95 Audit and Management Letter. COMMISSION ACTION: Page 2 06/03 '96 14:41 ID:COOPERS & LYBRAND FAX: PAGE 1 ~ l . Coopers & LYbrand Cooper. .. Lvbrand L.L.P. 200 South Orange Avenl,le 20th Floor Ollando. Florida 32801 telephone (407) 843.1190 lMelmile (407) 244-7$01 a prOfessionel sBrvices jlrm June 3. 1996 Mr. Ronald W. McLemore City Manager City of Winter Springs 1126 East State Road 434 Winter Springs, FL 32708-2799 Dear Ron: It is with deepest apology that I inform you that we will not be able to deliver the final issued fi- nancial statements for the City by the end of today, Monday, June 3rd. Unfortunately, the partner who was scheduled to give our required final concurrence on the statements before their release is dealing with both the sudden terminal stage of his mother's illness, as well as being ill with the flu himself Under the circumstances, let me propose that the City provide to the Commissioners a discussion draft of the financial statements with the assurance that the final issued financial statements will be available at the June] Oth Commission meeting. Please call me as soon as possible at 244-7511 to discuss whether this option would be acceptable to you. Again, my sincere apologies for any inconvenience this delay has caused. Sincerely, ,/., .-...-_.~) ~~d:t Patrick J. Knipe, Partner CoopelS & lybo'and L.L.P. is a m6tllber 0( Coope/s & Lybrand Ifllllmationat. 8 IImked IlabHlty association Incorporaled In Switzerland. I I I I I 1 I I I I I I I I I 1 I I 'I .. City of Winter Springs, Florida Year Ended September 30, 1995 , .~ i: fPJ~~[LD[M]D[M~~W [Q)~~[?[J FOR DISCUSSION PURPOSES ONLY I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA CONTENTS ~ Report of Independent Accountants .......................................................................... 1 General Purpose Financial Statements (Combined Statements - Overview) Combined Balance Sheet - All Fund Types and Account Groups ......................................... 2 Combined Statement of Revenues, Expenditures and Changes in Fund . Balances - All Governmental Fund Types ....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual- All Governmental Fund Types......................... 7 Combined Statement of Revenues, Expenses and Changes in Retained EarningslFund Balance - Proprietary and Fiduciary Fund Types ...................................... 11 Statement of Cash Flows - Proprietary Fund Type ................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 12 Notes to Financial Statements ........................................................................... 13 Combining, Individual Fund Statements and Schedule Governmental Fund Types General Fund Schedule of Expenditures - Budget (GAAP Basis) and Actual .....................................33 Special Revenue Funds Combining Balance Sheet ............................................................................ 34 Combining Statement of Revenues, Expenditures and Changes in Fund Balance...................... 36 Combining Statement of Revenues, Expenditures and Changes in Changes in Fund Balance - Budget (GAAP Basis) and Actual ..................................... 38 Debt Service Funds Combining Balance Sheet ............................................................................ 46 Combining Statement of Revenues, Expenditures and Changes in Fund Balance ...................... 47 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual ............................................. 48 Capital Projects Funds Combining Balance Sheet ............................................................................ 50 Combining Statement of Revenues, Expenditures and Changes in Fund Balance ...................... 51 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual ............................................. 52 Enterprise Funds Combining Balance Sheet ............................................................................ 54 Combining Statement of Revenues, Expenses and Changes in Retained Earnings .....................56 Combining Statement of Cash Flows ................................................................. 57 Fiduciary Fund Types Trust and Agency Funds Combining Balance Sheet ......................................................................... 58 Statement ofChanges m '_~~mm~~~l" 'ID)~ffii~;if""""""" 59 FOR DISCUSSION PURPOSES ONLY CONTENTS-CONTINUED I I ful< I 61 I 62 64 I I I I I I I I I I I I .1 I I CITY OF WINTER SPRINGS, FLORIDA Report on Compliance with Laws and Regulations Report on Internal Control Structure Management Comments [?)~~[L~~~~~~W ~[f~[~GS:'~ FOR DISCUSSION PURPOSES ONLY I I I I I I I I I I I I I I I I I I I Report of Independent Accountants The Honorable Mayor, Members of the City Commission, and City Manager City of Winter Springs, Florida We have audited the accompanying general-purpose financial statements and the combining and individual fund financial statements of the City of Winter Springs, Florida, as of and for the year ended September 30, 1995. These financial statements are the responsibility of the City of Winter Springs, Florida, management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Winter Springs, Florida, as of September 30, 1995, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. Also, in our opinion, the combining and individual fund financial statements referred to above present fairly, in all material respects, the financial position of each of the individual funds of the City of Winter Springs, Florida, as of September 30, 1995, and the results of operations of such funds and the cash flows of individual proprietary fund types for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 13, 1996 on our consideration of the City of Winter Springs, Florida's internal control structure and a report dated March 13, 1996 on its compliance with laws and regulations. Our audit was made for the purpose of forming an opinion on the general-purpose financial statements taken as a whole and on the combining and individual fund financial statements. The accompanying schedule of expenditures - budget (GAAP basis) and actual is presented for purposes of additional analysis and is not a required part of the financial statements of the City of Winter Springs, Florida. The information in this schedule has been subjected to the auditing procedures applied in the audit of the general-purpose, combining and individual fund financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. ~~~[L~~~~~~W [g)~L~J~'\: FOR DISCUSSION PURPOSES ONL\' Orlando, Florida March 13, 1996 1 CITY OF WINTER SPRINGS, FLORIDA COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS September 30, 1995 Governmental Fund Types Special Debt Capital Assets General Revenue Service Projects Cash and cash equivalents $2,128,864 $2,958,587 $1,993,654 $ 34,850 Investments 1,921,168 Receivables: Accounts receivable - net 16,375 Special assessments 72,335 Accrued interest receivable 1,018 4,047 Due from other governments 1,685 Due from other funds 118,864 16,314 . Inventories 3,645 Restricted Assets: Cash and cash equivalents 90,257 Investments Property, plant and equipment Less accumulated depreciation Unamortized bond costs Amount available in debt service funds Amount to be provided for retirement of general long-tenn debt Amount to be provided for capital lease Amount to be provided for accrued compensated absences Total Assets $2,433,043 $2,978,948 .$1,993,654 $1 ,956,018 See accompanying notes to financial statements. [?)~~fL~~~[f!J~~W [Q)~~~~clf FOR DISCUSSION PURPOSES ONLY 2 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Fiduciary Proprietary Fund Type Fund Types Account Groups Totals Trust and General General Long- (Memorandum Enterprise Agency Fixed Assets Tenn Debt Only) $ 1,147,258 $ 1,219,223 $ $ $ 9,482,436 1,579,535 3,500,703 727,098 743,473 72,335 99 5,164 1,685 42,255 10,272 187,705 149 3,794 2,070,488 2,160,745 2,566,070 2,566,070 , 40,973,465 10,830,745 51,804,210 (9,987,790) (9,987,790) 486,377 486,377 1,993,654 1,993,654 10,536,346 10,536,346 59,867 59,867 153,742 153,742 $ 38,025,370 $ 2,809,129 $ 10,830,745 $ 12,743,609 $ 73,770,516 (f)~[g[L~~~~~~W [Q)~~[Flf FOR DISCUSSION PURPOSES ONLY Continued 3 CITY OF WINTER SPRINGS, FLORIDA COMBINED BALANCE SHEET - CONTINUED ALL FUND TYPES AND ACCOUNT GROUPS September 30, 1995 Liabilities and Fund Equity Liabilities: Accounts payable Accrued liabilities Due to other funds Payable from restrided assets: Accrued interest Revenue bonds payable Obligation under futures agreement Customer deposits Deferred revenue Accrued compensated absences Deferred compensation Obligation under futures agreement, less portion payable from restrided assets Revenue bonds payable, less portion payable from restricted assets Capital lease payable Total liabilities Fund Equity: Investment in general fIXed assets Contributed capital Retained eamings: Reserved for renewal and replacement Reserved for capital improvements Unreserved Fund balances: Reserved for debt service Reserved for encumbrances Reserved for inventories Reserved for capital projects Reserved for employee retirement Unreserved Total fund equity Total Liabilities and Fund Equity See accompanying notes to financial statements. General Governmental Fund Types Special Debt Revenue Service Capital Projects $ 117,330 $ 123,327 $ 120,933 26,587 195 $ 27,759 90,257 47,694 16,314 143,973 546,n4 139,836 27,759 [P)~~iLD[MJDOO~~Y! [Q)~~[PIJ FOR DISCUSSION PURPOSES ONLY 4 I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA I COMBINED STATEMENT OF REVENUES. EXPENDITURES I AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES I Year Ended September 30, 1995 I Governmental Fund Types Totals Special Debt Capital (Memorandum I General Revenue Service Projects. Only) Revenues: I Taxes and special assessments $ 2,722,001 $ 2,152,117 $ $ $ 4,874,118 Licenses, permits and fees 473,711 383,313 857,024 Intergovernmental revenues 1,815,149 205,502 2,020,651 Charges for services 132,191 132,191 I Fines and forfeitures 154,504 52 154,556 Interest 115,493 128,535 105,065 113,163 462,256 Miscellaneous 603,448 2,200 5,011 610,659 Total revenues 6,016,497 2,871,719 105,065 118,174 9,111,455 I Expenditures: Current: General government 1,518,386 6,198 1,524,584 I Public safety 3,542,950 13,402 3,556,352 Transportation 827,161 184,263 1,011,424 Culture and recreation 706,716 706,716 I Capital outlay 322,232 350,980 440,885 1,114,097 Debt service: Principal retirement 113,965 235,000 348,965 Interest and fiscal charges 8,763 720,763 729,526 I Total expenditures 7,040,173 554,843 955,763 440,885 8,991,664 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,023,676) 2,316,876 (850,698) (322,711) 119,791 I Other Financing Sources (Uses): Operating transfers in 1,298,800 845,052 881,703 3,025,555 Operating transfers out (3,025,555) (3,025,555) I Total other financing sources (uses) 1,298,800 (2,180,503) 881,703 Excess of Revenues and Other I Financing Sources Over (Under) Expenditures and Other Uses 275,124 136,373 31,005 (322,711 ) 119,791 Fund Balances, October 1, 1994 1,611,145 2,702,739 1,962,649 2,250,970 8,527,503 I Fund Balances, September 30, 1995 $ 1,886,269 $ 2,839,112 $ 1,993,654 $ 1,928,259 $ 8,647,294 See accompanying notes to financial statements. I ~~~[L~~~~~~W [Q)~~[Flr I FOR DISCUSSION PURPOSES ONLY I 6 I I CITY OF WINTER SPRINGS, FLORIDA I COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET IGAAP BASIS) AND ACTUAL I ALL GOVERNMENTAL FUND TYPES I Year Ended September 30, 1995 General Fund I Variance Favorable Budget Actual (Unfavorable) I Revenues: Taxes and special assessments $ 2,804,135 $ 2,722,001 $ (82,134) I Licenses, permits and fees 503,285 473,711 (29,574) Intergovernmental revenues 1,815,292 1,815,149 (143) Charges for services 132,335 132,191 (144) Fines and forfeitures 155,000 154,504 (496) I Interest 115,570 115,493 (77) Miscellaneous 603,464 603,448 (16) Total revenues 6,129,081 6,016,497 (112,584) I Expenditures: Current: General government 1,692,514 1,518,386 174,128 I Public safety 4,044,363 3,542,950 501,413 Transportation 870,876 827,161 43,715 Culture and recreation 794,343 706,716 87,627 I Capital outlay 309,463 322,232 (12,769) Debt service: Principal retirement 114,710 113,965 745 Interest and fiscal charges 10,153 8,763 1,390 I Total expenditures 7,836,422 7,040,173 796,249 Excess (Deficiency) of Revenues Over (Under) I Expenditures (1,707,341) (1,023,676) 683,665 Other Financing Sources (Uses): Operating transfers in 1,298,938 1,298,800 (138) I Operating transfers out Total other financing sources (uses) 1,298,938 1 ,298,800 (138) I Excess of Revenues and Other Finance Sources Over (Under) Expenditures and Other Uses (408,403) 275,124 683,527 Fund Balances, October 1, 1994 1,611,145 1,611,145 I Fund Balances, September 3D, 1995 $ 1 ,202,742 $ 1.886,269 $ 683,527 I See accompanying notes to financial statements. [PJ~~[L~[M]~~~~W [Q)~~[Plr FOR DISCUSSION PURPOSES ONLY I Continued I 7 CITY OF WINTER SPRINGS, FLORIDA COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET lGAAP BASIS) AND ACTUAL - CONTINUED ALL GOVERNMENTAL FUND TYPES Year Ended September 30,1995 Special Revenue Funds Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes and special assessments Licenses, pennits and fees Intergovernmental revenues Charges for services Fines and forfeitures Interest Miscellaneous Total revenues $ 2,149,733 383,319 221 ,825 52 128,540 2,200 2,885,669 Expenditures: Current: General government Public safety Transportation Culture and recreation Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures 6,198 45,845 65,015 438,261 555,319 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,330,350 Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) 845,052 (3,039,204) (2,194,152) Excess of Revenues and Other Finance Sources Over (Under) Expenditures and Other Uses 136,198 2,702,739 Fund Balances, October 1, 1994 $ 2,152,117 383,313 205,502 52 128,535 2,200 2,871,719 $ 2,384 (6) (16,323) (13,950) 6,198 13,402 184,263 350,980 32,443 (119,248) 87,281 554,843 2,316,876 (13,474) 845,052 (3,025,555) (2,180,503) 13,649 13,649 136,373 2,702,739 $ 2,838,937 $ 2,839,112 $ Fund Balances, September 30, 1995 See accompanying notes to financial statements. ~~~iLDiitiJDfNj~~W [Q)/F3 ~lFlT FOR DISCUSSION PURPOSES ONLY '8 (5) I I I I I I I I I I I I I I I I I I I 476 175 175 I I I I Debt Service Fund Capital Projects Fund I Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) I $ $ $ $ $ $ I I 97,639 105,065 7,426 113,168 113,163 (5) 5,011 5,011 97,639 105,065 7,426 118,179 118,174 (5) I I I 2,369,149 440,885 1,928,264 235,000 235,000 727,888 720,763 7,125 I 962,888 955,763 .7,125 2,369,149 440,885 1,928,264 I (865,249) (850,698) 14,551 (2,250,970) (322,711) 1 ,928,259 881,728 881,703 (25) I 881,728 881,703 (25) I 16,479 31,005 14,526 (2,250,970) (322,711) 1,928,259 1,962,649 1 ,962,649 2,250,970 2,250,970 I $ 1,979,128 $ 1,993,654 $ 14~~~_~~r8ID)~~~~~'259 I FOR DISCUSSION PURPOSES ONL Y I Continued I 9 CITY OF WINTER SPRINGS, FLORIDA COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET (GAAP BASIS) AND ACTUAL - CONTINUED ALL GOVERNMENTAL FUND TYPES Year Ended September 30, 1995 Totals (Memorandum Only) Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes and special assessments Licenses, permits and fees Intergovemmental revenues Charges for services Fines and forfeitures Interest Miscellaneous Total revenues $ 4,953,868 886,604 2,037,117 132,335 155.052 454,917 610,675 9,230,568 Expenditures: Current: General govemment Public safety Transportation Culture and recreation Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures 1 ,698.712 4,090,208 935,891 794,343 3,116,873 349,710 738,041 11,723,778 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,493.210) Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) 3,025,718 (3,039,204) (13,486) Excess of Revenues and Other Finance Sources Over (Under) Expenditures and Other Uses (2.506,696) 8,527,503 Fund Balances, October 1, 1994 $ 4,874,118 857,024 2,020,651 132,191 154,556 462,256 610,659 9,111,455 1,524,584 3,556,352 1,011,424 706,716 1,114,097 348,965 729,526 8,991 ,664 119,791 3,025,555 (3,025,555) 119,791 8,527,503 $ (79,750) (29,580) (16,466) (144) (496) 7,339 (16) (119,113) 174,128 533,856 (75,533) 87,627 2,002,776 745 8,515 2,732,114 2,613,001 (163) 13,649 13,486 2,626,487 Fund Balances, September 30, 1995 $ 6,020,807 $ 8,647,294 $ 2,626,487 See accompanying notes to financial statements. [p)~~[L~~~~~~W [Q)~~~lr FOR DI~CUSSION PURPOSES ONLY 10 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA COMBINED STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS/FUND BALANCE PROPRIETARY AND FIDUCIARY FUND TYPES Year Ended September 30, 1995 Proprietary Fund Type Enterprise Funds Operating Revenues: User charges Contributions Investment income Miscellaneous income Total operating revenues $ 5,341,922 $ 5,341,922 Operating Expenses: Salaries and benefits Materials and supplies Depreciation and amortization Other operating expenses Benefit payments Commissions and service fees Total operating expenses 1,036,908 357,559 1 ,372,650 1,601,756 4,368,873 973,049 Operating Income Non-Operating Revenues (Expenses): Interest income Interest expense Gain on disposal of fixed asset Other 322,020 (1,373,597) 8,516 92,036 (951,025) 22,024 989,295 Total non-operating revenues (expenses) Net Income Retained Earnings/Fund Balance, October 1, 1994 Retained Earnings/Fund Balance, September 30, 1995 Fiduciary Fund Type Pension Trust 240,006 2,095 2,481 244,582 48,503 8,917 57 ,420 187,162 187,162 1,172,610 Totals (Memorandum Only) $ 5,341,922 240,006 2,095 2,481 5,586,504 1,036,908 357,559 1 ,372,650 1,601,756 48,503 8,917 4,426,293 1 ,160,211 322,020 (1,373,597) 8,516 92,036 (951,025) 209,186 $ 1,011,319 $ 1,359,772 $ 2,371,091 2,161,905 See accompanying notes to financial statements. [PiFt~iLDIM1DfM~iFtW [Q)~~~1t FOR DISCUSSION PURPOSES ONLY 11 CITY OF WINTER SPRINGS. FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUND TYPE Year Ended September 30. 1995 Enterprise Funds Increase (Decrease) in Cash and Cash Equivalents: Cash Flows from Operating Activities: Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization Provision for uncollectible accounts Changes in assets and liabilities: Increase in accounts receivable Increase in inventory Increase in due from other funds Increase in accounts payable Decrease in accrued liabilities Increase in due to other funds Increase in customer deposits Decrease in accrued compensated absences Total adjustments Net cash provided by operating activities $ 973,049 1,372,650 16,601 (86,582) (19) (9,013) 5,850 (72,181) 27,867 36,458 (9,162) 1,282,469 2,255,518 (1,045,792) (1,373,597) (95,000) (2,514,389) 3,694,413 (5,129,486) 322,020 (1,113,053) (1 ,371 ,924} 4,589.670 $ 3,217,746 Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Interest paid on revenue bonds Principal payments on bonds Net cash used in capital and related financing activities Cash Flows from Investing Activities: Sale of investments Purchase of investments Eamings on cash, cash equivalents and investments Net cash used in investing activities Net Decrease in Cash and Cash Equivalents Cash and Cash Equivalents, October 1, 1994 Cash and Cash Equivalents, September 30, 1995 Noncash Investing, Capital and Financing Activities: During the year ended September 30, 1995, the City recorded as contributed capital utility system equipment donated by developers totalling $7,537,23~)~ ~fbDiMJD[N]~~W [Q)~~[P;lr See accompanying notes to financial statements. FOR DISCUSSION PURPOSES ONLY 12 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS Year Ended September 3D, 1995 1. Summary of Significant Accounting Policies: The City of Winter Springs, incorporated in 1959, is located in Seminole County and is a political subdivision of the State of Florida. The legislative branch of the City is composed ofa five-member elected Commission. The City Commission is governed by the City Charter and by,state and local laws and regulations. The City Commission is responsible for the establishment and adoption of policy. The execution of such policy is the responsibility of the City Manager appointed by the Commission. The accounting policies of the City of Winter Springs conform to generally accepted accounting principles as applicable to units oflocal governments. The following is a summary of the more significant policies: A. ReDortine Entity - In evaluating the City as a reporting entity, management has addressed all potential component units (traditionally separate reporting entities) for which the City mayor may not be financially accountable and, as such, be includable within the City's financial statements. In accordance with Governmental Accounting Standards Board (GASB) Statement No. 14, the City (the primary government) is financially accountable if it appoints a voting majority of the organization's governing board and (1) it is able to impose its will on the organization or (2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the City. Additionally, the primary government is required to consider other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. As a result of applying the criteria of GASB Statement No. 14, no component units exist which would require inclusion in the City's financial statements. B. Fund Accountine - The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which the resources are to be spent and the means by which spending activities are controlled. The purposes of the City's various funds and account groups are as follows: Governmental Funds: General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes. Debt Service Funds - The Debt Service Funds are used to account for the accumulation of resources for the payment of general long-term debt principal, interest and related costs. ~fP3~~JiMJU[NJ~fP3W [Q)fP3~[?lf FOR DISCUSSION PURPOSES ONLY 13 14 I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS,FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1995 1. Summary of Significant Accounting Policies - Continued: Governmental Funds - Continued: C~ital Proiects Funds - The Capital Projects Funds are used to account for the portion of the proceeds of the Improvement Refunding Revenue Bonds -Series 1989 and Series 1993. These monies are being used for the acquisition and construction of civic and recreational facilities, a police station complex, a fire station, and a public works complex. PrO,prietary Fund: Enteq?rise Funds - The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the City Commission is that the costs (expenses, including depreciation) of providing services to the general public be financed or recovered primarily through user charges. The City's enterprise funds are a water and sewer utility and a stormwater utility. Fiduciary Funds: Trust and A~ency Funds - The Pension Trust Fund is utilized to account for the financial transactions of the City-administered pension plan. The Agency Fund is used to account for assets held by the City as an agent for the City employees under the deferred compensation plan. Account Groups: General Fixed Assets - The General Fixed Assets Account Group is used to account for the fixed assets of the City, except those of the proprietary funds. General Long-Term Debt - The General Long-Term Debt Account Group is used to account for the outstanding principal balances on any general or special obligation bonds, notes, compensated absences or other long-term debt of the City, except for long-term debt of the proprietary funds. C. Measurement Focus - Governmental Fund Types - General, Special Revenue, Debt Service and Capital Projects Funds are accounted for on a "spending" or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on the balance sheets. Accordingly, the reported unreserved fund balances (net current assets) are considered a measure of available, spendable or appropriable resources. Governmental Fund Type operating statements present increases (revenues and other financing sources) . and decreases (expenditures and other financing uses) in net current assets. [p)~~[L~(M]~~~~W [Q)~~~~ FOR DISCUSSION PURPOSES ONLY I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 1. Summary of Significant Accounting Policies - Continued: C. Measurement Focus - Continued - Proprietal)' Fund T)1)e - The Enterprise Fund is accounted for on an "income detennination" measurement focus. Accordingly, all assets and liabilities are included on their respective balance sheets, and the reported fund equity of each fund (total reported assets, less total reported liabilities) provides an indication of the economic net worth of the funds. The operating statements for the Proprietary Fund Type (on an income detennination measurement focus) report increases (revenues) and decreases (expenses) in total economic net worth. Fiducial)' Fund TJ3>es - The Pension Trust Fund is accounted for like proprietary funds. The Agency Fund is accounted for like governmental funds; however, it is custodial in nature (assets equal liabilities) and does not involve the measurement of results of operations. Account Gr01.1PS - The General Long-Term Debt and General Fixed Assets Account Groups are concerned only with the measurement of financial position. They are not involved with the measurement of results of operations. Long-term debts which are not intended to be financed through Proprietary Funds are accounted for in the General Long-Term Debt Account Group. Fixed assets which are not used in Proprietary Fund operations are accounted for in the General Fixed Assets Account Group. D. Basis Q,f Accountin~ - Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All Governmental Funds are accounted for using the modified accrual basis of accounting. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. Revenues susceptible to accrual include intergovernmental revenues and investment earnings. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for unmatured principal and interest on general long-term debt which is recognized when due. The Proprietary Funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned and their expenses are recognized when they are incurred. The Pension Trust Fund is accounted for using the accrual basis of accounting. The Agency Fund is accounted for on the modified accrual basis. E. Cash Equivalents - The City considers all highly liquid. investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. ~~~~~~~~~~W [Q)~~[p1F FOR DISCUSSION PURPOSES ONLY 15 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 1. Summary of Significant Accounting Policies - Continued: F. Investments - The City Charter and bond resolutions authorize the City to invest in direct obligations of or obligations guaranteed by the United States of America., obligations of specific agencies of the United States of America., investments fully secured by the Federal Deposit Insurance Corporation or collateral, secured repurchase agreements, pre-refunded obligations, money market, commercial paper and the Local Government Surplus Funds Trust Fund. All investments must be insured, registered or held by the City or a trustee in the CitYs name. Investments are stated at cost or amortized cost plus accrued interest. The City's investments were limited to U.S. Government Obligations, certificates of deposit, money market accounts, and overnight repurchase agreements and commercial paper during the current fiscal year. Investments of the City's Pension Trust Fund and Agency Fund consist of bonds, common stocks, debentures and short-term investments stated at firir market value based on quoted prices at the end of the fiscal year. The City invests in certificates of deposit which are insured up to 5100,000 by the FDIC. Amounts in excess of S100,000 are collateralized by U.S. Government securities held in the Public Deposit Security Trust Fund. G. Receivables - (1) Pro.perty Taxes - Under Florida law, the assessment of all properties and the collection of all county, municipal and school board property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector. The laws of the State regulating tax assessments are also designed to assure a consistent property valuation method statewide. State Statutes pennit municipalities to levy property taxes at a rate of up to 10 mills. The millage rate assessed by the City for the fiscal year ended September 30, 1995 was 3.7626 mills. Property taxes are billed and collected within the same fiscal period, and are reflected on the modified accrual basis. Ad valorem taxes on property values have a lien assessment date of January 1, with the millage established during September. The fiscal year for which taxes are levied begins October 1. Taxes are billed in November (levied) with a maximum discount available through November 30, and become delinquent April!. During May of each year, the certificates for unpaid taxes are sold by the County and the proceeds remitted to the City. Therefore, delinquent taxes, if any, are inunaterial at September 30, 1995. The City is not pennitted to appropriate future tax collections. Therefore, otherwise measurable revenues are not accrued because they are unavailable for current appropriations. (2) Accounts Receivable - The Water and Sewer Utility Fund operating revenues are recognized on the basis of cycle billings rendered monthly. Revenues for services delivered during the last month of the applicable reporting period that have not been read are accrued. (3) Allowance for Doubtful Accounts - The City provides an allowance for water and sewer accounts receivable that may become uncollectible. At September 30, 1995, this allowance was 598,690. 1fJ~~fLa~DfNJ~~W fP)~~fPlJ FOR DISCUSSION PURPOSES ONLY 16 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 1. Summary of Significant Accounting Policies - Continued: H. Inventories - Inventories are stated at the lower of cost or market with cost determined on the first-in. first-out method. Inventories in the General and Enterprise Funds consist of expendable supplies held for consumption. The cost is recorded as an expenditure at the time inventory items are used (consumption method). Reported inventories within the governmental funds are offset by a fund balance reserve which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. I. ProDerty. Plant and EquiDment - (1) Property, plant and equipment purchased in the Governmental Fund Types are recorded as capital outlay expenditures at the time of purchase. Such assets are capitalized at cost in the General Fixed Assets Account Group, except for certain improvements other than buildings ("infrastructure") such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems. Donated and confiscated assets are recorded in the general fixed assets at their fair market value at the time received: No depreciation has been provided on plant and equipment recorded in the General Fixed Asset Account Group. (2) Property, plant and equipment of the Proprietary Fund Type are recorded at cost. Donated property, plant and equipment are capitalized at their fair market value at the time received. Depreciation is provided using the straight-line method over the estimated useful lives of the various classes of depreciable assets. The estimated useful lives of the various classes of depreciable assets are as follows: Asset Years Utility System Equipment Vehicles 30 years 5 years 3 years J. Unamortized Bond Costs - Costs associated with the issuance of revenue bonds are amortized over the life of the bonds using the straight-line method of accounting, which approximates the interest method. K. D~ferred Revenues - Deferred revenues reported in applicable Governmental Fund Types represent unearned revenues or revenues which are measurable but not available and, in accordance with the modified accrual basis of accounting, are reported as deferred revenues. The deferred revenues will be recognized as revenue in the fiscal year they are earned or become available. ~~~lLa~DfNj~~W [Q)~~fFlJ' FOR DISCUSSION PURPOSES ONLY 17 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 1. Summary of Significant Accounting Policies - Continued: L. Accrued ComlJensated Absences - Employees earn vacation leave at the rate of 10 days annually for the first five years of service. Beginning with the first month of the sixth year of service, vacation leave is earned at the rate of 15 days annually. Accrued vacation leave shall not exceed 30 days for employees with less than 10 years of service, or 45 days for employees with more than 10 years of service. In the event oftennination, no employee shall be paid for more than 15 days vacation leave. The accrued liability for accumulated annual vacation leave and related benefits is recorded in the proprietary fund when incurred. The liability for Governmental Fund Types is recorded in the general fund for amounts expected to be paid during the next fiscal year. The remainder is recorded in the General Long-Term Debt Account Group. Employees earn sick leave at the rate of 12 days per year. There is no limit on the accumulation of sick leave; however, sick leave is forfeited upon tennination of employment, other than death or retirement. Liability for sick leave is recorded when it is determined payment is probable (i.e., an employee dies or retires). The accrued liability for accumulated sick leave and related benefits is recorded in the proprietary fund when incurred. The liability for Governmental Fund Types is recorded in the General Long-Term Debt Account Group. M. Contributions - The contributions accounted for in the Proprietary Fund represent the estimated equipment costs incurred by customers and developers for connection to the City's utility system, as well as monies contributed by customers for purchase of certain equipment. Depreciation expense on contributed fixed assets is reflected in the statement of revenues, expenses and changes in retained eammgs. N. Encumbrances - Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve that portion of the applicable appropriation, is utilized in all governmental funds. Encumbrances outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. O. Bud.fet and Budfetary Accountinf - The City follows the procedures set forth below in establishing the budgetary data reflected in the financial statements: (1) On or before July 1st of each year, the City MaIlager submits a Proposed Budget to the City Commission for the fiscal year beginning the following October 1st. The Budget includes proposed revenues and expenditures, and a description of capital activities for the ensuing fiscal year. (2) The City Commission then holds informal workshops. Each.item in the budget is thoroughly discussed, and the public is invited to participate. (3) On or before September 15th of each year, the public hearings are completed and the Commission adopts the final budget and establishes the ad valorem tax millage. (4) The budget may be formally amended bm~1lD~~W [Q)~ ~~c-1Y FOR DISCUSSION PURPOSES ON~Y 18 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1995 1. Summary of Significant Accounting Policies - Continued: O. Bud-fet and Bud,fetary Accountinf: - Continued - (5) The City Manager is authorized to transfer budgeted amounts between accounts within a department. At any time during the fiscal year, the City Manager may transfer part or all of any unencumbered appropriation among programs within one department. The transfer of unencumbered appropriations from one department to another requires an ordinance by City Commission. (6) Budgets are adopted on a basis consistent with generally accepted accounting principles, except that proceeds from capital leases and corresponding capital outlay expenditures are not budgeted and debt service expenditures on capital leases are budgeted as departmental expenses. Budgeted amounts are as originally adopted, or as amended by the City Commission. (7) Appropriations lapse at the end of the fiscal year. (8) Budgetary control is established at the departmental level for the General Fund, and at the fund level for the Special Revenue, Debt Service, Capital Projects, and Enterprise Funds. (9) During the year ended September 30, 1995, the expenditures were in excess of the legally adopted budget in the Transportation Improvement Fund. P. Total Columns on Combined Statements - Tolal columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in confonnity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 2. Cash and Investments: Following are the components of the City's cash and investments at September 30, 1995: Unrestricted Restricted Total Cash and cash equivalents Investments $ 9,482,436 3,500,703 $ 2,160,745 2,566,070 $11,643,181 6,066,773 $ 12,983,139 $ 4,726,815 $ 17,709,954 Devosits - The City maintains separate bank accounts for all funds. At September 30, 1995, the carrying amount of the City's deposits was $8,403,295, made up of demand deposits, money market accounts and certificates of deposit, all of which are authorized under Florida Statutes and various bond covenants. The City's deposits at September 30, 1995 were fully insured by either federal depository insurance or by collateral pursuant to the Public Depository Security Act of the State of Florida. ~~~lLa~afM~~W [D)~~~'ir FOR DISCUSSION PUR~OSES ~~L ~ 19 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 2. Cash and Investments - Continued: Ovemt~ht Reourchase Afreements - Overnight repurchase agreements consist of excess cash balances invested on a daily basis under agreements with local financial institutions, and are considered cash equivalents for financial statement purposes. Repurchase agreements are for the sale and repurchase of securities guaranteed by the United States Government. These are categorized below as to the level of risk assumed by the City. Investments - The City's investments are authorized by the Florida Statutes as well as various bond covenants. Investments are categorized below to give an indication of the level of risk assumed by the City at September 30, 1995. Category 1 includes investments that are insured or registered or investments for which the securities are held by the City or its agent in the City's name. Overnight Repurchase Agreements Category Canying Market 1 Amount Value $ 2,699,225 $ 2,699,225 $ 2,699,225 3,495,488 3,495,488 3,429,959 313,188 313,188 304,793 $ 6,507,901 6,507,901 6,433,977 8.403,295 8,403.295 $ 14,911,196 $ 14,837,272 U.S. Government Obligations: Treasury Notes Treasury Bills Deposits Total Cash and Investments In addition to the cash, cash equivalents and investments listed above, the City's cash and cash equivalents and investments balances at September 30, 1995 contains employee deferred compensation plan (see Note 9) cash and cash equivalents of $1,203,172 and Pension Trust Fund (see Note 8) cash, cash equivalents, and investments of $1,595,586, all of which are carried at market value. These are held separately from those of other City funds and are held by the plan ~m~~~e'[Q)~!~[PU FOR DISCUSSION PURPOSES ONLY 3. Interfund Balances: Individual fund interfund receivable and payable balances at September 30, 1995 are as follows: Due From Due To Other Funds Other Funds General Fund $ 118,864 $ 26,587 Special Revenue Funds 16,314 195 Enterprise Funds 42,255 160,923 Trust and Agency Funds 10,272 $ 187,705 $ 187,705 20 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 4. Property, Plant and Equipment: A summary of the changes in Proprietary Fund Type property, plant and equipment for the year ended September 30, 1995 follows: Balances Balances October 1, September 30, 1994 Additions Deletions 1995 utility system $ 25,488,400 $ 2,586,833 $ 2,929,889 $ 25,145,344 Stormwater system 9,428,815 9,428,815 Office building 703,531 14,015 80,000 637,546 Office furniture and equipment 523,736 51,127 18,339 556,524 Vehicles 326,966 35,379 362,345 Land 4,383,591 4,383,591 Construction in progress 435,068 597,921 573,689 459,300 Total 41,290,107 3,285,275 3,601,917 40,973,465 Less accumulated depreciation (8,697,057) (1,336,281) (45,548) (9,987,790) $ 32,593,050 $ 1 ,948,994 $ 3,556,369 $ 30,985,675 The cost of utility system equipment and stonnwater system assets contributed by developers is estimated to the extent that actual cost information is not available. Estimates are based on known costs of similar equipment. At September 30, 1995, estimated amounts included in the utility and stonnwater systems totalled $11,383,769. The following is a summary of changes in general fixed assets for the year ended September 30, 1995: Balances Balances October 1, September 30, 1994 . Additions Deletions 1995 Land $ 2,329,144 $ $ $ 2,329,144 Buildings 2,106,529 343,570 2,450,099 Furniture and equipment 1,565,627 311,611 74,081 1,803,157 Vehicles 1,439,258 113,355 13,853 1,538,760 Park and recreational facilities 2,462,499 26,259 2,488,758 Construction in progress 124,576 439,820 343,569 220,827 $ 10,027,633 $ 1,234,615 $ 431,503 $ 10,830,745 ~~[g!LDfMJllfM~~Y! 1Q)~~~'jJ FOR DISCUSSION PURPOSES ONL ~ 21 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1995 5. Long-Term Debt: A. Chanres in General Lon.e-Term Debt - A summary of changes in general long-term debt for the year ended September 30, 1995 follows: Balance Odober 1, 1994 Balance September 30, Retirements 1995 Additions Improvement Refunding Revenue Bonds. Series 1989 Series 1993 Capital Lease Payable Accrued Compensated Absences $ 3,400,000 9,365,000 175,257 $ $ 180,000 $ 3,220,000 55,000 9,310,000 115,390 59,867 153,742 350,390 $ 12,743,609 14,872 14,872 138,870 $ 13,079,127 $ $ TOTAL B. ImDrovement Refimdin.e Revenue Bonds - The major provisions of the resolutions authorizing these bonds are as follows: (1) Establishment and maintenance of various funds. The Debt Service Fund records all the debt service requirements of the issue, and includes the sinking fund and reserve accounts. (2) Restriction on the use of cash in order of priority. (a) Payment of current debt service requirements. (b) Payment of reserve requirements up to the maximum of $468,922 and $888,121 for the Series 1989 and 1993 bonds, respectively. (c) Any remaining revenue can be used for any lawful purpose. (3) Early redemption. The bond resolutions provide for the City's optional early redemption of outstanding bonds at call rates varying from 100% to 102% of the instrument's face value plus accrued interest. depending on the call date. The redemption period begins on October 1, 1998 and October 1, 2004 for the Series 1989 and 1993 bonds, respectively. ~~~~u~~~ffi\~W [Q)~ffi\GSl FOR DISCUSSION PURPOSES ONLY 22 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, .FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 5. Long-Term Debt - Continued: (4) Investment restrictions. Improvement Revenue Refunding Bonds. Series 1989: Debt Service Fund and Excise Tax Fund monies may be invested in authorized investment securities which mature not later than the dates on which the monies on deposit will be needed for the purpose of such fund. Improvement Revenue Refunding Bonds Series 1993: Excise Tax Fund and Debt Service Fund monies, excluding Reserve Account monies, may be invested in authorized investment securities which mature not later than the dates on which the monies on deposit will be needed for the purpose of such fund. Reserve Account monies may be invested in securities maturing not later than five years from the date of their deposit into the Reserve Account. (5) Pledge of revenues. The bonds and related interest are payable solely from and collateralized by a lien on the Public Service Tax that the City is entitled to levy on certain utility sales and Franchise Fees levied by the City for a thirty-year electric franchise granted by the City in 1984. The Improvement Refunding Revenue Bonds consisted of the following at September 30, 1995: Principal Balance Interest Outstanding at Rates and Original September 30, Description Dates Maturity Amount 1995 Improvement Refunding Revenue Bonds - 6.70%-7.45% 10/1/95 - Series 1989 (4/1 & 10/1) 1 0/1/07 $ 4,020,000 $ 3,220,000 Improvement Refunding Revenue Bonds - 3.00%-5.5% 10/1/95 - Series 1993 (4/1 & 10/1) 10/1/18 $ 9,365,000 $ 9,310,000 U ';'G)i02!.:::;n rU!I~\iJn, rM (;\.\ fD)\\7 P11rU\ Jl1PU?;; i'?;;:>\ iSlr :--UuLSlS 'lJ\~LfuU\J~U-=U U L::::/ uLrUU U FOR DiSCUSSION PURPOSES ONLY 23 24 I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 5. Long-Term Debt - Continued: C. Water and Sewer Rf;;!undine Revenue Bonds and Water and Sewer Revenue Bonds - The major provisions of the resolutions authorizing the Water and Sewer Refunding Revenue Bonds and Water and Sewer Revenue Bonds are as follows: (1) Establishment and maintenance of various funds. (a) The Revenue Fund records all gross revenues derived from operation of the utility. (b) The Debt Service Fund (including principal; interest and redemption accounts) records all monies to meet current debt service and reserve requirements. (c) The Sewer Renewal and Replacement Fund iecords monies for paying cost of extensions, enlargements, additions, or replacement of capital assets of the utility. (2) Restrictions on the use of cash from operating revenue in order of priority. (a) Transfer of developer agreement payments into a Developer Agreement Payments Account (Note 10),. (b) Payment of current operating and maintenance expenses. (c) Payment of current debt service and reserve requirements. (d) Payments to Renewal and Replacement Funds at one-twelfth of five percent of gross revenues received in the prec.ening fiscal year, until the amount on deposit equals or exceeds: Five percent of gross revenues of the preceding fiscal year attributable to the west utility plant. (3) Early redemption. Early redemption is provided for at a call rate varying from 100% to 102% of the face amount of the bonds. [0~~~u~~G~~~W [D~&~1F FOR DISCUSSION PURPOSES ONLY I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANqlAL STATEMENTS - CONTINUED Year Ended September 30, 1995 5. Long-Term Debt - Continued: (4) Investment restrictions. Water and Sewer Refunding Revenue Bonds, Series 1991: (a) The Revenue Fund and the Debt Service Fund may invest in investment securities which mature not later than the dates on which the monies on deposit therein will be needed for the purpose of such fund. (b) The Renewal and Replacement Fund may invest in investment securities with no more than five years maturity. (c) The Reserve Account of the Debt Service Fund may invest in investment securities which mature no later than the last maturity date of the bonds. Water and Sewer Refunding Revenue Bonds, Series 1992: Monies in any fund or account may be invested in investment securities which mature no later than the dates on which the monies will be needed for the purpose of such fund or account. (5) Pledge of revenues. The bonds are payable solely from and collatera1ized by the net revenues of the system. Net revenues include all rates and charges received from customers, connection reservation fees, and interest or investment income, less costs for operation and maintenance of the systems. In addition, for the Water and Sewer Revenue Bonds, net revenues include amounts received under a certain fifteen-year developer agreement (see Note 10). ~)~ ~n ~O~O~ 0 roJW7 roVO) fE\ rsCf=[ . \J t~ In) lJ ,-=_') Lrll U-0. u [ FOR DfSCUSSION PURPOSES ONLY 25 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATE~ENTS - CONTINUED Year Ended September 30, 1995 5. Long-Term Debt - Continued: The Water and Sewer bonds consisted of the following at September 30, 1995: Description Interest Rates and Dates Original Amount Maturity Water and Sewer Refunding Revenue Bonds - Series 1991 Less: Original Issue Discount, net of amortization 4.5%-6.75% (4/1 & 10/1) 10/1/91-10/1/21 $ 6,915,000 6,915,000 Water and Sewer Refunding Revenue Bonds - Series 1992 Less: Original Issue Discount, net of amortization 4.4%-6.125% (4/1 & 10/1) 10/1/92-4/1/20 16,015,000 16,015.000 $ 22,930,000 Less current portion ~~~f6u~~~~~w [Q)~~~U FOR DiSCUSSION PURPOSES ONLY 26 Principal Balance Outstanding at September 30, 1995 I I I I I I I I I I I I I I I I I I I $ 6,610,000 (155,085) 6,454,915 16,015,000 (155,266) 15.859,734 22,314,649 (415,000) $ 21,899,649 I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 5. Long-Term Debt - Continued: D. Defeased Debt - The following bonds were legally defeased. Since invesbnents COnsIstIng of governmental obligations are held in escrow for payment of principal and interest, the bonds are not liabilities of the City. The principal balance of the defeased general long-term debt and enterprise fund bonds at September 30, 1995 follows: General Long-Term Debt: Principal Balance Amount Outstanding at Original Originally September 30, Issue Date Description Issued 1995 May 1,1984 Improvement Revenue Bonds - Series 1984 $ 3,505,000 $ 465,000 May 1, 1989 Improvement Refunding Revenue Bonds - Series 1989 4,980,000 4,980,000 $ 8,485,000 $ 5,445,000 Proprietary Fund: Principal Balance Amount Outstanding at Original Originally September 30, Issue Date Description Issued 1995 September 1, 1984 Water and Sewer Revenue' Bonds - Series 1984 $ 5,035,000 $ 480,000 April 1, 1990 Water and Sewer Revenue Bonds - Series 1990 12,300,000 12.300,000 $ 17.335,000 $ 12.780,000 ~[Pi~~uLtUu~~~[PiW [Q)~l~~'-lf FOR DiSCUSSION PURPOSES ONLY 27 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 5. Long-Term Debt - Continued: E. Obliration Under Futures A~reement - In connection with the City's acquisition of the assets of Seminole Utility Company during fiscal year ended September 30, 1990, the City entered into a futures agreement with the seller whereby the City is obligated to pay the seller an amount, in accordance with the agreement, for future connections to the east utility plant up to a maximum of $4,967,020 over a period of fifteen years. The obligation was included in the original purchase price of the east utility plant during the fiscal year ended September 30, 1990. During the fiscal year ended September 30, 1995, the City revised their estimates of probable connections under the agreement, resulting in a revised estimated futures obligation of $1,763,006. This change in estimate resulted in an adjustment of the original purchase price of the utility. As connections under the futures agreement are made, the futures liability is deposited in a segregated account for payment to the seller on April 30 of the following year. At September 30, 1995, outstanding balances were as follows: Total Obligation Less Current Portion (connections made under the futures agreement as of September 30, 1995) $ 1,763,006 (563,006) $ 1 ,200,000 [}2)~~~uU0Ju~~~~W ~~ffi~~U FOR D~5CUSSION PURPOSES ONLY 28 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 5. Long-Term Debt - Continued: F. Annual Requirements to Maturity - The annual debt service requirements to amortize all bonded debt of the City outstanding as of September 30, 1995 are as follows: G_ral Long-Tenn Debt EntIlrprise Fund Im~ Im~ Wnw and s.- wnw and s.- FISCllI Vea, Relunding R_ Refunding R_ RWrlding R__ Refunding R_ T Clllll Annual Ending BoncIa, Series 1l18ll BoncIa, SeriM 1893 Bonda, Series 11181 Bonda, Series 11182 Debt SeMce September 30, Principal Interest Principal Interest Principal 1- Principal 1- Requi_ 1996 S 1115,000 S 229,550 S 50,000 S 478,413 S 100,000 S 426,1110 S 315,000 S lI32,228 S 2, n4,3711 1997 150,000 217,437 110,000 473,582 105.000 420,257 330,000 D17,7811 2,n4,085 1998 212, 150 275,000 488,240 110,000 413,1133 345,000 llO2,OO1 2,n4,324 1999 212, 150 285,000 4S4,8ll3 115,000 407.147 360,000 8&4,721 2, 718.D11 2000 255,000 202,870 45,000 W,8n 125,000 3llll,048 375,000 8ll5.871 2,7111,481 2001 275,000 183,821 45,000 445,803 135,000 3D1,412 3ll5,000 845,753 2,7111,7811 2002 295,000 182,ll37 45,000 443,733 140,000 382,733 420,000 823,ll48 2,713,348 2003 315,000 140,388 50,000 441,422 150,000 373,282 440,000 1lIXJ,727 2,710,7118 2OG4 335,000 118,317 55,000 438,745 155,000 3&3,3&3 485,000 n8,05ll 2,704,4&4 2005 385,000 110,418 55,000 435,ll4O 170,000 352,312 490,000 749,429 2,708,009 2008 390,000 82,482 80,000 432,ll82 180,000 340,388 520,000 720,502 2,708,334 2007 420,000 32,408 80,000 4211,813 1110,000 328,037 545,000 ll8ll,348 2,894,807 2008 225,000 8,382 290,000 420,1125 200,000 315,038 580,000 1155,871 2,894,8111 2009 545,000 3118,7llll 220,000 300,737 1115,000 1118,714 2,899,157 2010 575,000 38lI,3Oll 225,000 2811,113 1150,000 581,131 2,lI8ll,550 2011 805,000 338,331 245,000 270,187 llllO,ooo 540,281 2,ll88,77ll 2012 840,000 305,1150 255,000 253,1113 735,000 4llll,7118 2,888,082 2013 870,000 271,283 280,000 235,412 780,000 450,4114 2,887,1811 2014 705,000 234,288 295,000 218,23& 825,000 401,341 2,878,887 2015 745,000 104,412 310,000 1118,087 875,000 348,278 2,tJtJfiJ,m 2018 785,000 152,337 340,000 173,138 lI3O,ooo 294,000 2,874,475 2017 830,000 110,000 360,000 148,837 llllO,ooo 235,200 2,874,037 2018 870,000 87,500 385,000 122.850 1,050,000 1n,ns 2,888,075 2019 915,000 22.875 410,000 115,175 1,115,000 108,422 2,8&4,4n 2020 440,000 85,475 1,180,000 n,275 1,757,750 2021 470,000 33,750 503,750 2022 500,000 500,000 S 3,220,000 S 1,871,390 S 11,310,000 S 8,272,711 S 11,810,000 S 7,311,352 S 18,015,000 S 14,883,984 S 117,494,437 6. Capital Lease Obligation: During the 1992-93 fiscal year, the City entered into a capital lease agreement for the purchase affire trucks, which provide for annual principal and interest payments as follows: Fiscal Year Ending September 30, Principal Interest Total 1996 $ 59,867 $ 1,497 $ 61,364 Principal payments of$115,390 and interest payments of$7,338 were made during the year. ~~~.~;JU~'~U~~~W [Q)~~~U FOR D~S'CUSS~ON PURPOSES ONLY 29 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 7. Contributed Capital: Contributed capital recorded in the Enterprise Funds at September 30, 1995 includes Contributions In Aid of Construction (CIAC) and utility system and stormwater utility equipment donated by customers and developers. CIAC represents advances made to the west utility plant by its customers and developers prior to its acquisition by the City on October 6, 1984. The City records as contributed capital equipment donated by developers upon physical connection to the water and sewer systems since acquis~tion of the west utility plant in 1984 and the east utility plantin 1990, as well as all stormwater system assets donated by developers, Contributed capital is recorded at cost. CIAC and Land Donated by Developers Prior to October 6, 1984: Donated land CIAC $ 28,000 1,766,805 1,794,805 Capital Contributions Subsequent to Odober 6, 1984: Donated utility equipment Donated stormwater assets CIAC 3,669,527 5,869,437 50,000 9,588,964 $ 11,383,769 Total Contributed Capital 8. Defined Contribution Employee Pension Plan: The City maintains a single employer, defined contribution pension plan (Money Purchase Pension Plan and Trust) which it adopted in August, 1993. Employees are eligible to participate in the plan after one full year of service if they work for at least 1,000 hours within the 12-month period. The City is obligated by the plan document to make a contribution equal to at least six percent (6%) of the Annual Compensation of each Member of the Plan. It is the policy of the City to fund pension costs in installments equally divided among the employee pay periods. Employees make no contributions to the plan. After four continuous years of employment with the City, the amount credited to the contribution account of an employee shall vest in the employee according to the completed number of employment years preceding the date of termination. After four years of continuous employment, a member is 40% vested, increasing by 10% for each year thereafter to a maximum of 100%. For the year ended September 30, 1995, total payroll was $4,925,940 and the employer's contribution was $240,006 or 6% of the actual eligible payroll of$4,000,097. \Dj@:~~.n n\0!~i1I*~/~ ~W1 lQ)~L~~\S u u U~,bUjJduu ",LAu J U FOR O~~1;CUSS.~ON PURPOSES ONLY 30 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 9. Deferred Compensation Plan: The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan. available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan. all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. The City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. 10. Developer Agreement: In connection with the City's April, 1990 acquisition of the east water and sewer utility assets from Seminole Utility Company, the City entered into a ten-year developer agreement with a major local developer. Under this agreement, the City guarantees the availability of 1,500 equivalent residential water and sewer connections (ERC's), most of which were provided at no charge for reservations or service availability until April, 1995. In return, the developer paid an annual fee of $256 per ERC not used by April 30, 1995, until used or until April 30, 1999, whichever is earlier. The agreement may be extended to April 30, 2004 at the option of either party. rD/fO), ~In nr~V~n~n!0 6)\V7 f[)\ fD) !f;:. ~lJ LrLrill..=:::J~u~VLUU '-'u-\-~LrU 'V l'::!)lJUL,~u-- FOR [}iSCUSSjON PURPOSES ONLY 31 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30,1995 Segment Information for Enterprise Funds: The City maintains two enterprise funds, one a water and sewer utility and the other a stormwater utility. Segment information for the year ended September 30, 1995 was as follows: 11. Operating Revenues Operating Expenses Depreciation and Amortization Expense Operating Income (Loss) Net Income (Loss) Current Capital: Contributions Property, Plant and Equipment: Additions Deletions Net Working Capital Total Assets Bonds and Other Long-Tenn Liabilities: Payable from operating revenues Total Equity Water and Sewer - West utility $ 5,053,503 3, n2,269 1,130,995 1,281,234 321,190 1,667,794 1,948,994 (3,556,369) 1,516,806 32,062,226 23,099,649 6,505,161 Stonnwater - East utility $ 288,419 596,604 241,655 (308,185) (299,166) 5,869,437 (48,818) 5,963,144 5,889,927 Total Enterprise Funds $ 5,341,922 4,368,873 1,372,650 973,049 22,024 7,537,231 1,948,994 (3,556,369) 1,467,988 38,025,370 23,099,649 12,395,088 I I I I I I I I I I I I I I I I I I I Prior Period Adjustments and Reclassifications: On October 1, 1994, the City reclassified its Stormwater Utilities Fund from a Special Revenue Fund to an Enterprise Fund. This reclassification was made to comply with the City's ordinance that established the fund. 12. As part of this reclassification, developer-contributed fixed assets utilized by the Stormwater Utilities, formerly excluded from the City's General Fixed Asset Account Group because of their classification as infrastructure, were recorded in the Stormwater Utility Enterprise Fund as contributed capital in the amount of $5,869,437, which represents the assets' estimated value at date of acquisition less accwnulated depreciation. ~.~. !"'.,~ ' r-:-~:-,', ';:\ f' n!\ fl r~\ I~,-., \\17' I L~ ,f""nJL, ~\ { , Ur ~-';: '-'~ i ~ I. I!' i \I rJI:: r\ I I!~\ I ~ \ I ~i\u r~~U\L/~ \: ~c~ r-' Lru~L..::::JJL(/: uu\Jl.Aj U L:::/ ~ ruU FOR O~SC'Uf~SION PURPOSES ONLY 32 I I I I I I I I I I I I I I I I I I I COMBINING, INDIVIDUAL FUND STATEMENTS AND SCHEDULE I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA GENERAL FUND SCHEDULE OF EXPENDITURES - BUDGET IGAAP BASIS' AND ACTUAL Year Ended September 30, 1995 Variance Favorable Budget Actual (Unfavorable) General Government: Commission $ 60,085 $ 48,965 $ 11 ,120 City manager 111,054 104,628 6,426 City clerk 246,478 242,593 3,885 Finance 509,565 482,180 27,385 Personnel 47,897 46,285 1,612 General Services 321 ,408 311,195 10,213 Purchasing 76,341 73,338 3,003 Engineering 71 ,321 60,074 11,247 Land development 94,182 48,391 45,791 Land management 47,677 47,513 164 Code enforcement 54,788 39,711 15.077 General government 140,635 96,775 43,860 Capital improvements 45,972 45,972 Total general government 1 ,827 ,403 1,647,620 179,783 Public Safety: Police 2,165,739 1,856,351 309,388 Fire 1,883,860 1,709,074 174,786 Building 206,762 186,479 20,283 Total public safety 4,256,361 3,751 ,904 504,457 Transportation: Public works 919,470 895,840 23,630 Total transportation 919,470 895,840 23,630 Culture and Recreation: Recreation 833,188 744,809 88,379 Total culture and recreation 833,188 744,809 88,379 Total Expenditures $ 7,836,422 $ 7 ,040,173 $ 796,249 See accompanying notes to financial sta'tements. (p)~~~~~~~~~W [Q)~~[FlJ FOR D~SCUSSION PURPOSES ONL Y 33 CITY OF WINTER SPRINGS, FLORIDA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET September 30, 1995 Police Special Law Transportation Interim Education Enforcement Improvement Recreation Service Assets Fund Trust Fund Fund Fund Fee Fund Cash and cash equivalents $ 32.443 $ 10,588 $ 612,119 $ 25,020 $ 13,483 Due from other funds 16,314 Interest receivable 1,619 $ 32,443 $ 10,588 $ 630,052 $ 25,020 $ 13,483 Liabilities and Fund Equity Liabilities: Accounts payable $ $ $ 122,860 $ $ Due to other funds 195 Deferred revenue 16,314 Total liabilities 139,369 Fund Equity: Fund balances: Reserved for encumbrances 137,133 Unreserved 32,443 10,588 353,550 25,020 13,483 Total fund equity 32,443 10,588 490,683 25,020 13,483 $ 32,443 $ 10,588 $ 630,052 $ 25,020 $ 13,483 See accompanying notes to financial statements. \OJr \ :",';l i-:~\ ;';lnc;-JI (6.\ fD):V [Q)~~~LF L~"~:'~~'~~~! i ~UU\'luJJ'\.JLr'~LJu ;\:_.,.lr~ D~"'--U~~~O!'~ PURPOSES ONL Y .,(:jlt \ ~d~y.,~c,,)j; Ii 34 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Public Electric Transportation Police Fire Service Excise Franchise Impact Impact Impact Tax Fund Tax Fund Fee Fund Fee Fund Fee Fund Fee Fund Total $ 2,407 $ $ 139 $ 1,872,265 $ 126,244 $ 263,879 $ 2,958,587 16,314 2,428 4,047 $ 2,407 $ $ 139 $ 1,874,693 $ 126,244 $ 263,879 $ 2,978,948 $ $ $ $ 467 $ $ $ 123,327 195 16,314 139,836 467 2,407 2,407 $ 2,407 $ 137,133 2,701,979 2,839,112 $ 2,978,948 139 139 1,874,226 1,874,226 $ 1,874,693 126,244 126,244 263,879 263,879 $ 139 $ 126,244 $ 263,879 [P~~[Lu[,~Ju~l~~~~W [Q)~!~[FlJ FOR D~SCUSSION PURPOSES ONLY " 35 CITY OF WINTER SPRINGS, FLORIDA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended September 30,1995 Police Education Fund Special Law Enforcement Trust Fund Transpor- tation Improve- ment Fund Recreation Fund Interim Service Fee Fund Revenues: Taxes Fees Intergovernmental revenues Fines and forfeitures Interest Miscellaneous Total revenues $ $ $ $ $ 21,978 205,502 52 266 30,451 2,200 2,518 235,953 681 630 524 630 22,502 681 Expenditures: Current: General government Public safety Transportation Capital outlay Total expenditures 11,202 2,200 2,200 183,973 267,203 451,176 4,985 16,187 Excess (Deficiency) of Revenues Over (Under) Expenditures (15,506) 318 (215,223) 630 22,502 Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) (29,500) (29,500) Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses (215,223) 630 (6,998) (15,506) 318 Fund Balances, October 1, 1994 47,949 10,270 705,906 24,390 20,481 Fund Balances, September 3D, 1995 $ 32.443 $ 10,588 $ 490,683 $ 25,020 $ 13,483 See accompanying notes to financial statements. ~, ' .":'-:';- ,.~. .nn,\ fl r,. S'\\~ \if\\~"" ff r-:=U /:.. :.,.. : ii, , \ i '. q I: : ' . I 16.\\ l' < I' ~ '\ / L\ \ II ;:=J ~: ""'\!::-~~__~\I:r\~':'\\I\i;\'J/r'" ru lSIU uLrUU . ..' u_:__~;._w'...JUl_...... ... __ .... J ro.R D~SCU~bS~ON PURPOSES ONLY 36 I I I I I I I I I I I I I I I I I I I I I I I Transpor- Public Electric tation Police Fire I Service Excise Franchise Impact Impact Impact Tax Fund Tax Fund Fee Fund Fee Fund Fee Fund Fee Fund Totals I $ 1,307,065 $ 845,052 $ $ $ $ $ 2,152,117 278,084 27,334 55,917 383,313 205,502 I 52 4,334 2,960 79,851 2,834 6,004 128,535 2,200 I 1 ,311 ,399 845,052 2,960 357,935 30,168 61,921 2,871,719 I 6,198 6,198 13,402 290 184,263 I 78,792 350,980 6,198 79,082 554,843 I 1,311,399 845,052 (3,238) 278,853 30,168 61,921 2,316,876 845,052 845,052 I (1,308,992) (845,052) (842,011) (3,025,555) (1,308,992) (845,052) 3,041 (2,180,503) I 2,407 ( 197) 278,853 30,168 61,921 136,373 I 336 1,595,373 96,076 201,958 2,702,739 $ 2,407 $ $ 139 $ 1,874,226 $ 126,244 $ 263.879 $ 2,839,112 I [Q)~~~lf I lP~~!LJU~U~~~W FOR DISCUSSION PURPOSES ONL Y I I I 37 CITY OF WINTER SPRINGS, FLORIDA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET IGAAP BASIS) AND ACTUAL Year Ended September 30, 1995 Police Education Fund Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes Fees Intergovernmental revenues Fines and forfeitures Interest Miscellaneous Total revenues $ $ $ 681 681 681 681 Expenditures: Current: General government Public safety Transportation Capital outlay Total expenditures 32,443 11 ,202 4,985 16,187 43,645 4,985 48,630 32,443 Excess (Deficiency) of Revenues Over (Under) Expenditures (47,949) (15,506) 32,443 Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses (15,506) 32,443 (47,949) Fund Balances, October 1, 1994 47,949 47,949 32,443 $ 32,443 Fund Balances, September 30, 1995 $ $ See accompanying notes to financial statements. ~G~E[LU~uu~l~~~W [Q)~~[Fu FOR DISCUSSION PURPOSES ONLY 38 I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET fGAAP BASIS) AND ACTUAL - CONTINUED Year Ended September 3D, 1995 Recreation Fund Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes $ $ $ Fees Intergovernmental revenues Fines and forfeitures Interest 630 630 Miscellaneous Total revenues 630 630 Expenditures: Current: General government Public safety Transportation Capital outlay 25,020 25,020 Total expenditures 25,020 25,020 Excess (Deficiency) of Revenues Over (Under) Expenditures (24,390) 630 25,020 Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses (24,390) 630 25,020 Fund Balances, October 1, 1994 24,390 24,390 Fund Balances, September 30, 1995 $ $ 25,020 $ 25,020 See accompanying notes to financial statements. jC)\gi,i~~ n~\~lm~~W [Q)~~[Fu u t.: '-1 ,.::::Jl.::::l U U L; FOR DiSCUSSION PURPOSES ONL Y 40 I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET IGAAP BASIS) AND ACTUAL - CONTINUED Year Ended September 3D, 1995 Excise Tax Fund Budget Actual Variance Favorable (Unfavorable) Revenues: Taxes Fees Intergovernmental revenues Fines and forfeitures Interest Miscellaneous Total revenues $ 845,052 $ 845,052 $ 845,052 845,052 Expenditures: Current: General government Public safety Transportation Capital outlay Total expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures 845,052 845,052 Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) (845,052) (845,052) (845,052) (845,052) Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses Fund Balances, October 1, 1994 Fund Balances, September 30, 1995 $ $ $ See accompanying notes to financial statements. \3)~ S;p 0~~ ~~~ 0 rD)W7 fB;~ iIQ, leCJr LJ LI'lll.S. :=J~JJ\JuJu\J~LrU If L!:-VLriJl):;\lJ U FOR Ci~~CUSSBON PURPOSES ONLY 42 I I I I I I I I I I I I I I I I I I I I I I I Electric Franchise Fee Fund Transportation Impact Fee Fund Variance Variance I Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) I $ $ $ $ $ $ 278,084 278,084 I 2,960 2,960 79,851 79,851 I 2,960 2,960 357,935 357,935 I 6,198 6,198 290 290 I 78,800 78,792 8 6,198 6,198 79,090 79,082 8 I (3,238) (3,238) 278,845 278,853 8 I 845,052 845,052 (842,150) (842,011) 139 2,902 3,041 139 I (336) (197) 139 278,845 278,853 8 I 336 336 1 ,595,373 1,595,373 $ $ 139 $ 139 $ 1,874,218 $ 1 ,874,226 $ 8 I I ~)U~.~ r;~n !l~,,~nlm~~W ~~~[Plf ... U L::::J c.=:J:..J L; LJ _ u FOR DISCUSSION PURPOSES ONLY I I Continued I 43 CITY OF WINTER SPRINGS, FLORIDA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET IGAAP BASIS' AND ACTUAL - CONTINUED Year Ended September 30, 1995 Police Impact Fee Fund Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes Fees Intergovernmental revenues Fines and forfeitures Interest Miscellaneous Total revenues $ $ $ 27,335 27,334 2,835 30,170 2,834 30,168 Expenditures: Current: General government Public safety Transportation Capital outlay Total expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures 30,170 30,168 Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses 30,168 96,076 30,170 96,076 Fund Balances, October 1, 1994 Fund Balances, September 30, 1995 $ 126,246 $ 126,244 $ See accompanying notes to financial statements. (1) I I I I I I I I I I I I I I I (1) (2) (2) (2) (2) I;: \ fD) rr= r r;:\:;j n i'\ fj 1M r;:::;:\,r~/7 ~_r/lFULSLhUL~{JLU\~Lr~l~ 11 [Q)~~[FlJ I FOR (~!SC1JSSiON PURPOSES ONLY I I I 44 CITY OF WINTER SPRINGS, FLORIDA DEBT SERVICE FUNDS COMBINING BALANCE SHEET September 30, 1995 1989 Debt 1993 Debt Assets Service Service Total Cash and Cash Equivalents $ 782,044 $ 1,211,610 $ 1,993,654 $ 782,044 $ 1,211,610 $ 1,993,654 Fund Equity Fund Balance Reserved for Debt Service $ 782,044 $ 1,211,610 $ 1,993,654 $ 782,044 $ 1,211,610 $ 1,993,654 See accompanying notes to financial statements. ~\}f\ fk~~ IT) 'rI ,~r?U ~'\~ ~n !: 0 . 1.-.1:.; !.J \.----; i~)~'~;\i';:::J!, r\0\~ \"'11 Ii In L~.~)LrU&=' U Lf U:JL':::::Jt...=luuV.., U\..iu U FOR D~SCUSS~ON PURPOSES ONLY 46 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended September 30, 1995 47 CITY OF WINTER SPRINGS, FLORIDA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET (GAAP BASIS' AND ACTUAL Year Ended September 30, 1995 Budget Revenues: Interest $ 34,125 $ 34,125 Total revenues Expenditures: Principal retirement Interest and fiscal charges Total expenditures 180,000 248,975 428,975 Excess (Deficiency) of Revenues Over (Under) Expenditures (394,850) Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) 397,385 397 ,385 Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses 2,535 785,719 Fund Balances, October 1, 1994 1989 Debt Service Actual Variance Favorable (Unfavorable) 21 ,621 $ 21 ,621 (12,504) (12,504) 180,000 242,675 422,675 6,300 6,300 (401 ,054) (6,204) 397,379 397,379 (3,675) (6,210) 785,719 $ 788,254 $ 782,044 $ (6,210) Fund Balances, September 30, 1995 See accompanying notes to financial statements. i-f))i~~; ,-~~~: ii:1pnr~.~ 0\ ::J)\V7 f\\D jp) /'t}. rsCjf J'"~ Lll.lL~~ i~'JdUU~ju\d-'-uL!u U lJ::ljL'll~U U FOR D~SCUSS!ON PURPOSES ONLY 48 (6) (6) I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1993 Debt Service Totals Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ 63,514 $ 83,444 $ 19,930 $ 97,639 $ 105,065 $ 7,426 63,514 83,444 19,930 97,639 . 105,065 7,426 55,000 55,000 235,000 235,000 478,913 478,088 825 727 ,888 720,763 7,125 533,913 533,088 825 962,888 955,763 7,125 (470,399) (449,644) 20,755 (865,249) (850,698) 14,551 484,343 484,324 (19) 881,728 881,703 (25) 484,343 484,324 (19) 881,728 881,703 (25) 13,944 34,680 20,736 16,479 31,005 14,526 1,176,930 1 ,176,930 1,962,649 1 ,962,649 $ 1,190,874 $ 1,211,610 $ 20,736 $ 1,979,128 $ 1,993,654 $ 14,526 ~- \i"::"\ ;~-=Jf1 ri0l'Qr\ 11 C\ ~V' rDJ~ /6\ l?1J i;:VI;::~i:=:!L 11U AJli!~~1/6~ ru u !J w.L~L:Jl.!' \~.;. ULJ '\.JU- L. t..=.-' w-U FOR D~SCUSSION PURPOSES ONL Y 49 CITY OF WINTER SPRINGS, FLORIDA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET September 30,1995 1989 Capital 1993 Capital Assets Projects Projects Total Cash and Cash Equivalents $ 34,850 $ $ 34,850 Investments 1,921,168 1,921,168 $ 34,850 $ 1 ,921,168 $ 1,956,018 Liabilities and Fund Equity Liabilities: Accounts payable $ 1,774 $ 25,985 $ 27,759 Total liabilities 1,774 25,985 27,759 Fund Equity: Fund balance reserved for encumbrances 150,596 150,596 Fund balance reserved for capital projects 33,076 1 ,744,587 1,777,663 Total fund equity 33,076 1,895,183 1,928,259 $ 34,850 $ 1,921,168 $ 1,956,018 See accompanying notes to financial statements. ~ -:::::l ,'- . ,_. __,_ ,.... r-....... ~'., .._ ,._, .: - , ' .."". '1. .- -: I I !r... '. r!.: d'i }71 'I r!,l \ . n rr-\', r;::::';, L_'~ ..\ i ---., U .; _..1 '--,:! :::I,\.I~II::~,'IJ. 'Q~ ;.:~.\ ,-!/ lLj,.--., l_l\lr- '".../,r.\lr"" il""".;:.I;\.\:_\,' u' U ~U uU t.... U L.::=lL-='-J:~ 1__:"; U'..J ......; L' ...... ~ Fen O~SCUSSiON PURPOSES ONLY 50 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended September 30,1995 Revenues: Interest Miscellaneous Total revenues 1989 Capital 1993 Capital Projects Projects Totals $ 3,128 $ 110,035 $ 113,163 5,011 5,011 8,139 110,035 118,174 90,834 350,051 440,885 90,834 350,051 440,885 (82,695) (240,016) (322,711) Expenditures: Capital outlay Total expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses (82,695) 115,771 (240,016) 2,135,199 (322,711) 2,250,970 Fund Balances, October 1, 1994 Fund Balances, September 30, 1995 $ 33,076 $ 1,895,183 $ 1,928,259 See accompanying notes to financial statements. '\7 r;:, r:::::--- n r::::J~. .... ,", r;n!\n T:I \, '"",I!>' fA :...... 'I ',.....'rp'!?\........I! rC\!,'iilir\il/!:.."\S!,\' \[1 ,illl-:'\ li~\iU--' Ii l'.lJ!::::~ ,--:, '.'\~::"1 1\'" '" \,1 t..=:.I ULru U I L1 UL::::l' ~I,' .'..1'\. ,I \.JiJUL.. ~ l. FO'r~ DgSCUSSiON PURPOSES ONLY 51 CITY OF WINTER SPRINGS, FLORIDA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET fGAAP BASIS} AND ACTUAL Year Ended September 30,1995 1989 Capital Projects Variance Favorable Budget Actual (Unfavorable) Revenues: ' Interest Miscellaneous Total revenues $ 3,128 $ 3,128 $ 5,011 5,011 8,139 8,139 123,910 90,834 33,076 123,910 90,834 33,076 (115,771) (82,695) 33,076 Expenditures: Capital outlay Total expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses (82,695) 33,076 (115,771) 115.771 115,771 33,076 $ Fund Balances, October 1, 1994 33,076 Fund Balances, September 30, 1995 $ $ See accompanying notes to financial statements. \D2 ~,-::::J~' ,-... ~ 0 l\;' _ r-:::cn l' . w IF, ~ 1\ '1Q)\D),c.\\ \\Qi0n~n ~~rJ @Lfi1!J, LF u V-- \.n1\SL::::JJ\';JdL;U\L U ONLY FOli"<l lfoy..",,~,<-.r'[~~~~ON PURPOSeS ~"'i. o.J\;.;.J\r..''l.-.i'''''''--* 52 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1993 Capital Projects Totals Variance Variance Favorable Favorable Budget Actual (Unfavorable ) Budget Actual (Unfavorable) $ 110,040 $ 110,035 $ (5) $ 113,168 $ 113,163 $ (5) 5,011 5,011 110,040 110,035 (5) 118,179 118,174 (5) 2,245,239 350,051 1 ,895,188 2,369,149 440,885 1,928,264 2,245,239 350,051 1,895,188 2,369,149 440,885 1,928,264 (2,135,199) (240,016) 1,895,183 (2,250,970) (322,711) 1 ,928,259 (2,135,199) 2,135,199 (240,016) 2,135,199 $ 1,895,183 1,895,183 (2,250,970) 2,250,970 (322,711) 2,250,970 $ 1,928,259 1,928,259 $ $ 1,895,183 $ $ 1 ,928,259 LD~[glLU~u~~~W [Q)~~~~ FOR D~SCUSSiON PURPOSES ONLY 53 CITY OF WINTER SPRINGS, FLORIDA ENTERPRISE FUNDS COMBINING BALANCE SHEET September 30, 1995 Water & Sewer Stonnwater Assets Utilities Utilities Total Current Assets: Cash and cash equivalents $ 1,147,258 $ $ 1,147.258 Accounts receivable - net 727,098 727,098 Due from other funds 17,856 24,399 42,255 Inventories 149 149 Total current assets 1,892,361 24,399 1,916,760 Restricted Assets: Cash and cash equivalents 1,759,526 310,962 2,070,488 Investments 2,566,070 2,566,070 Total restricted assets 4,325,596 310,962 4,636,558 Property, Plant and Equipment 31,544,650 9,428,815 40,973,465 Less: Accumulated Depreciation (6,186,758) (3,801,032) (9,987,790) Property, plant and equipment, net 25,357,892 5,627.783 30,985,675 Unamortized Bond Costs 486,377 486,377 r-=:1 ~-- i0~ ~n ~f.\f.ln[)J1 &, @\~"J1 f\]1~, B\ \ P lJ- L UlJ ~ L:::JULt{tU U U'\J lr'J In) , L=:/' U lJ - u u FOR D~SCUSS~ON PURF'OSI~S ONLY Total Assets $ 32,062,226 $ 5,963,144 $ 38,025,370 54 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Water & Sewer Stonnwater Liabilities and Fund Equity Utilities Utilities Total Current Liabilities (Payable from Current Assets): Accounts payable $ 184,495 $ 44,670 $ 229,165 Accrued liabilities 23,792 23,792 Due to other funds 132,376 28,547 160,923 Accrued compensated absences 34,892 34,892 Total current liabilities (payable from current assets) 375,555 73,217 448,772 Current Liabilities (Payable from Restricted Assets): Accrued interest 687,989 687,989 Current portion of revenue bonds payable 415,000 415,000 Obligation under futures agreement - current portion 563,006 563,006 Customer deposits 415,866 415,866 Total current liabilities (payable from restricted assets) 2,081,861 2,081 ,861 Long-Term Liabilities: Obligation under futures agreement, less current portion 1,200,000 1,200,000 Revenue bonds payable, less current portion 21,899,649 21,899,649 Total long-term liabilities 23,099,649 23,099,649 Total liabilities 25,557 ,065 73,217 25,630,282 Fund Equity: Contributed capital 5,514,332 5,869,437 11,383,769 Retained earnings: Reserved for renewal and replacement 998,941 998,941 Reserved for capital improvements 327,706 327,706 Unreserved - (deficit) (335,818) 20,490 (315,328) Total retained earnings 990,829 20,490 1,011,319 Total fund equity 6,505,161 5,889,927 12,395,088 Total Liabilities and Fund Equity $ 32,062,226 $ 5,963,144 $ 38,025,370 [F)~~rs~[0JU~~~W lQ)~~[Fu FOR D~SCUSS~ON PURPOSES ONLY 55 CITY OF WINTER SPRINGS, FLORIDA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended September 30, 1995 Water & Sewer Stormwater Utilities Utilities Total Operating Revenues: User charges $ 5,053,503 $ 288,419 $ 5,341,922 Operating Expenses: Salaries and benefits 1,036,908 1,036,908 Materials and supplies 357,559 357,559 Depreciation and amortization 1,130,995 241 ,655 1,372,650 Other operating expenses 1 ,246,807 354,949 1,601,756 Total operating expenses ' 3, n2,269 596,604 4,368,873 Operating Income (Loss) 1 ,281,234 (308,185) 973,049 Non-Operating Revenues (Expenses): Interest income 313,001 9,019 322,020 Interest expense (1,373,597) (1,373,597) Gain on disposal of equipment 8,516 8,516 Miscellaneous 92,036 92,036 Total non-operating revenues (expenses) (960,044) 9,019 (951 ,025) Net Income (Loss) 321,190 (299,166) 22,024 Retained Earnings, October 1, 1994 669,639 319,656 989,295 Retained Earnings, September 30, 1995 $ 990,829 $ 20,490 $ 1,011,319 -''\ c_'~ _-,~ iD,'jD ie-il n'1hl~8D~~W [QJ~~~!y lr' Ulll c'L:."=JJ!.J\JUuu 11 ~0S') FO~ l:"1 ~"':P'~LJ''"''~~VON PuopO ~n :;...jI~~;\,6"~;:l 5- l; h SES ONLY 56 I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA I ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS I Year Ended September 30,1995 I -~':'., ~-":' rc::'n nn r:lnr\n .& fD):'ij lQ)~ ffi\~lJ Water ' Ii' ,.'! l-, ". I' I. !, . 0 , :'/--'1): r-' I I"" ~.' 'I Ii I'J t:. \ I ru ' & Sewer Stonnwater ,. l~--IL.:::::;! -:j~UlJuL' iF"_\L r!""~ F~~~,,",4"-, ;".:,,~<~~.r, P' u~PS(~ES Q~L y Utilities Utilities Total I ~~fJ~s~..:(ti;~~e)i~~iJb'~a.m~as qUlval . Cash Flows from Operating Activities: I Operating income (Joss) $ 1,281,234 $ (308,185) $ 973,049 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: I Depreciation and amortization 1.130,995 241.655 1,372,650 Provision for uncollectible accounts 16,601 16,601 Changes in assets and liabilities: Increase in accounts receivable (86.582) (86,582) I Increase in inventory (19) (19) (Increase) decrease in due from other funds (17,855) 8,842 (9,013) Increase (decrease) in accounts payable (28,891) 34,741 5,850 Decrease in accrued liabilities (72.181) (72,181) I Increase (decrease) in due to other funds (678) 28,545 27,867 Increase in customer deposits 36,458 36,458 Decrease in accrued compensated absences (9,162) (9,162) I Net cash provided by operating activities 2,249,920 5,598 2,255,518 Cash Flows from Capital and Related Financing Activities: I Acquisition and construction of capital assets ,(1,045.792) (1,045.792) Principal paid on revenue bonds (95,000) (95,000) Interest paid on revenue bonds (1 ,373,597) (1,373,597) Net cash provided by (used in) capital I and related financing activities (2,514,389) (2,514,389) Cash Flows from Investing Activities: Sale of investments 3,694,413 3,694,413 I Purchase of investments (5,129.486) (5,129,486) Earnings on cash, cash equivalents and investments 313,001 9,019 322,020 Net cash provided by (used in) I investing activities (1,122,072) 9,019 (1 ,113,053) Net Increase (Decrease) in Cash and Cash Equivalents (1,386,541) 14,617 (1.371,924) I Cash and Cash Equivalents. October 1, 1994 4,293,325 296,345 4,589,670 Cash and Cash Equivalents, September 30,1995 $ 2,906,784 $ 310,962 $ 3,217,746 I Noncash Investing, Capital. and Financing Activities: I During the year ended September 30. 1995, the City recorded as contributed capital utility system equipment donated by developers totalling $1.667.794 for the Water and Sewer Utilities and $5,869.437 for the Stormwater Utility. I I 57 CITY OF WINTER SPRINGS,FLORIDA TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET September 30, 1995 Pension Trust Fund Agency Fund Defined Deferred Assets Contribution Compensation Total Cash and Cash Equivalents $ 16,051 $ 1,203,172 $ 1,219,223 Investments 1~579,535 1,579,535 Accrued Interest Receivable 99 99 Due from other Funds 10,272 10,272 $ 1,605,957 $ 1,203,172 $ 2,809,129 Liabilities and Fund Equity Liabilities: Deferred compensation $ $ 1,203,172 $ 1 ,203,172 Total liabilities 1,203,172 1 ,203,172 Fund Equity: Reserved for employee retirement 1 ,605,957 1,605,957 Total fund equity 1,605,957 1,605,957 $ 1,605,957 $ 1,203,172 $ 2,809,129 See accompanying notes to financial statements. ..__, . -::,' " -\ '0" h', r; (.\ 1"0;\\17 :'=-> 10:; /~'\ :;'''\ \' , _ ,".::\ \ ;:7;.: ';\J,. ~i;! ;<~J: /~\ :un''. U L0UI}~U u ~- G \iL_=-,~=UU\..:L~W;.J' u ..i j U FOR D~SCUSSaON PURPOSES ONLY 58 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF WINTER SPRINGS, FLORIDA AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year Ended September 30, 1995 Balance October 1, 1994 Balance September 30, Additions Deductions 1995 DEFERRED COMPENSATION: Assets Cash and Cash Equivalents $ 1,035.642 $ 291,076 $ 123,546 $ 1,203,172 Liabilities Deferred Compensation $ 1,035,642 $ 291,076 $ 123,546 $ 1,203,172 See accompanying notes to financial statements. ~~~~u~u~~'[PiW [Q)~ffi\~lJ FOR rH~CUSS~ON PURPOSES ONLY 59 60 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I COMPLIANCE REPORTS I I I I I I I I I I I I I I I I I I I REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS The Honorable Mayor, Members of the City Commission, and City Manager City of Winter Springs, Florida We have audited the general-purpose financial statements and the combining and individual fund financial statements and account groups of the City of Winter Springs, Florida as of and for the year ended September 30, 1995, and have issued our report thereon dated March 13, 1996. We conducted our audit in accordance with generally accepted auditing standards and 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 of material misstatement. Compliance with laws, regulations, contracts, and grants applicable to the City of Winter Springs, Florida is the responsibility of the City of Winter Springs, Florida management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the general-purpose financial statements and the combining and individual fund financial statements Was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards. However, we noted certain immaterial instances of noncompliance that we have reported to the management of the City of Winter Springs in a separate letter dated March 13, 1996. This report is intended for the information of the management of the City of Winter Springs, Florida, the City Commission, and the Auditor General of the State of Florida. However, this report is a matter of public record and its distribution is not limited. ~~~~U~~~~~W [D)~~~u FOR DISCUSSION PURPOSES ONLY Orlando, Florida March 13, 1996 61 REPORT ON INTERNAL CONTROL STRUCTURE The Honorable Mayor, Members of the City Commission, and City Manager City of Winter Springs, Florida [0l0~[g~D\KIAlG~~~W lQJ~~lPlf FOR DISCUSSiON PURPOSES ONLY We have audited the general-purpose financial statements and the combining and individual fund and account group financial statements of the City of Winter Springs, Florida, as of and for the year ended September 30, 1995, and have issued our report thereon dated March 13, 1996. We conducted our audit in accordance with generally accepted auditing standards and 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 of material misstatement. The management of the City of Winter Springs, Florida, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. In planning and performing our audit of the general-purpose financial statements and the combining and individual fund and account group financial statements of the City of Winter Springs, Florida, for the year ended September 30, 1995, we obtained an understanding of its internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an . . . opIDlon. 62 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors and irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the nonna} course of performing their assigned functions, We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. However, we noted certain matters involving the internal control structure and its operation that we have reported to the management of the City of Winter Springs, Florida, in a separate letter dated March 13, 1996. This report is intended for the infonnation of the management of the City of Win~r Springs, Florida, the City Commission, and the Auditor General of the State of Florida. However, this report is a matter of public record and its distribution is not limited. ';-'-: ,-:-~~'i T-\ 11m-'- n 1\\ r2l1 '.::), '\:\17 [Q)U" r=--~o /A'\ reU~'C::~- ....' : ,"";" 1 ,'''' ,: I II ;, , (I Ii Ii !,\! II [; '. I r-. '" 'U ~ , ~ L 'l~L::JJU\J,JUL.i \.L.r-uu U FOR D~SCUSSION PURPOSES ONLY Orlando, Florida March 13, 1996 63 MANAGEMENT COMMENTS The Honorable Mayor, Members of the City Commission, and City Manager City of Winter Springs, Florida We have audited the general-purpose financial statements and the combining and individual fund and account group financial statements of the City of Winter Springs, Florida, as of and for the year ended September 30, 1995, and have issued our report thereon dated March 13, 1996. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. In addition, we are submitting for your consideration the accompanying recommendations designed to help the City improve the internal control structure and achieve operational efficiencies. Also, we have tested your operations for compliance with applicable laws, regulations and contracts and have included additional comments required to be included by reason of the Rules of the Auditor General of the State of Florida. We have reviewed the City's financial report, as of September 30, 1995, required to be filed with the Department of Banking and Finance pursuant to Section 218.32 of the Florida Statutes. This report was compared with the City's financial statements for the same period. No exceptions were noted during our review. We detennined that the City of Winter Springs, Florida, was not in a state of financial emergency as a consequence of conditions described in Section 218 .503( 1), Florida Statutes, under the Rules of the Auditor General of the State of Florida. This report is intended for the infonnation of the management of the City of Winter Springs, Florida, the City Commission, and the Auditor General of the State of Florida. However, this report is a matter of public record and its distribution is not limited. i}2)~~lL~~mfDffi:I~W [Q)~ffi:I~lJ FO~ /l"':"~~u ili1'>>~r,_l: ~ -U~r'.lO ~ ~ ;"""~""""~",,'U~~'i\,.~g'i ","' nr SES ONLY Orlando, Florida March 13, 1996 64 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Status of Prior Year Comments We noted that the previous management letter comments have been resolved to our satisfaction. with the exception of the following: 1. We noted that the City's computer system does not properly record expenditures relating to prior year encumbrances. .As a result, several of the City's expenditures and fixed asset accounts were understated. We recommend that the City gain a full understanding of the entries made by the computer system when invoicing a prior year encumbrance. The system should be modified to properly record the entries or the City should maintain sufficient records to adjust the entries on a monthly basis. Manarement's Re$,ponse: This matter has been resolved through computer software enhancements. 2. .As in prior years, we noted certain major funds whose accounts did not balance. This necessitated our performing extensive research into the cause of the incorrect fund balances, and resulted in numerous correcting journal entries. We recommend that the City review out-of-balance funds and prepare the adjustments necessary to bring the funds into balance. Manarement's ResDonse: New computer software enhancements this year will resolve this matter. Current Year Comments 1. We noted that the person acting as cashier for the City also issues licenses and permits such as occupational licenses. lbis lack of segregation of duties could allow errors or irregularities to go undetected. We recommend that the person responsible for issuing such licenses and permits be independent of the cashier function. Manafement's ResDonse: This recommendation has been partially implemented and will be completed during FY 97 as a result of relocation and reorgani7~tion of finance functions included in the FY 97 Budget. ,-- ~., - "",,'i'"" n fA r:::'\~f7 [Q)I-....j ~I r-':'U- \. -:"'., '......i' 1 i'\ Ii,' , ^: 01 . 10 ,[, I 1 _.; . : ..._. . I Ii'.' ~ ': ,'" '-: ..... \ ". I i:..'..U.'-:..\IL-~i' U"i'j' "I"U"'il ~\I~\ D u-UL ? u I ut.=::;:..= U\ ~IJ \.! . uU 1,.1 FOR DiSCU3S~ION PURPOSES ONLY 65 2. We noted inadequate cash control and cut-off procedures in the receipt of occupational license fees. We found numerous payments sitting in a file folder, not deposited or even restrictively endorsed. Due to the inability of the City to ascertain the fiscal year in which the monies were actually received, none of the receipts could be counted as revenues in the fiscal year ended Seprember30,1995. We recommend that all monies received be immediately logged in, restrictively endorsed, deposited in the bank in a timely manner, and the corresponding revenue be recorded in the proper period. fR)f9) ~~ ~r0t~u~ f&i ~W1 [f\\fD2 /i;, blF LJ LfIJt.=:::JlbUu'..JL, u \J~U'u U L0Lfllu-uU U Manaeement's ResDonse: FOR DISCUSSION PURPOSES ONLY During FY 97, additional o~ni7.ational changes will be implemented to further enhance the segregation of duties as noted in the response to Current Year Comment No. 1 above. 3. The City's Transportation Improvement Fund was overexpended for fiscal year ended Seprember 30, 1995. An official budget amendment transferring money sufficient to cover these expenditures was not approved by the City Commission. Thus, these expenditures constiture a legal violation. We recommend expenditures be more closely monitored to prevent such overexpenditures in the future. Manaeement's ResDonse: Management is preparing in the FY 97 Budget authorization to employ a budget analyst that provides the manpower and expertise needed to resolve budgets investment problems noted in this comment and to implement a rigorous pre audit system. Management directives have been executed to help resolve this problem until such time that a full and complete budget maintenance and pre audit system can be operational. 4. We noted that the final adopted budget for the fiscal year ended September 30, 1995 was not stamped into admission by the City Clerk, attached to appropriate Commission minutes, and filed as part of the formal budget records of the City. Since no legally adopted budget was made part of the public record, it makes monitoring of the adherence to said budget more difficult and increases the possibility that unapproved changes could possibly be made without detection. We recommend that the final budget and all subsequent amendments, as adopted by the City Commission, be properly entered into the public records of the City. Manaeement's ResDonse: This problem has been resolved through management directives to the Clerk. 66 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 5. The City is rapidly expanding its use of information technology. This is evidenced by the installation of a new financial accounting system, plans to network all City departments and the hiring of a "computer support specialist". Such growth brings about the need for additional controls relating to the information technology environment. As a start, we have the following recommendations: Document an information technology strategic plan. Such plans outline where the City wants to be within the next three to five years with regards to information technology utilization. Without a strategic plan, the City risks spending information technology dollars today without proper regard to how these investments will serve the City, if at all, in the future. We recommend that an information technology strategic plan be developed. Such a plan should be created with appropriate input from all affected City departments. Develop documented computer security and usage policies and procedures. We noted that there are no documented computer security and usage policies and procedures. Such documents are important in that they help to standardize and ensure that employees are aware of management's intended policies and procedures. Such policies should include, at a minimum: password protocols; workstation usage rules; computer virus procedures; software licenses; responsibilities for enforcement and disciplinary actions taken for infractions. We recommend that written computer security policies and procedures be developed and that all employees be required to sign a copy of this document. Going forward, all new employees should be required to read and sign these policies as part of the orientation process. Develop a computer system access form. There is currently no documented method for adding new users to the system(s). We recommend that a new user request fonn be developed to provide documentation of this process. This fonn should contain appropriate approvals and a detailed description of both system and application level access. These fonns can be used to review access levels on the system and compare them to the authorizing source documentation on a periodic basis. Formalize computer help desk procedures. As the use of PC's and software grows, so will the number of "help desk" calls. Such problems should be logged with the nature of the problem (or question), the person/department experiencing the problem and the resolution. This information can then be used to help detennine needed computer training and will also serve as a valuable reference database as problem resolutions are documented. We recommend that such a system, preferably automated, be implemented. Develop procedures to monitor the use of unlicensed software. We noted that there currently is no active software license policy in effect. Penalties for violations of software copyright laws are quite severe and can best be avoided by having an active compliance program in place. We recommend that the responsibility for maintaining software licenses be designated and listings of which computers have which software be maintained. Microcomputers can then be audited against these listings to ensure that no unauthorized applications are installed. All such reviews should be documented and retained as evidence that the procedures are operating as intended. [0~[~ILu~~~~~~W [Q)~~fl FOR D~SCUSSION PURPOSES ONL' 67 Develop standards for microcomputer based software and hardware. Without such standards, the risk of lost bulk purchase volume discounts and the chance of deparbnents using unlicensed software increases. Hardware/software support costs also increase due to the effort required to support multiple platforms. We recommend that microcomputer software and hardware standards be developed and adhered to. I I I I I I I I I I I I I I I I I I I Manarement's Resoonse: All of these recommendations are currently addressed through the City's new Infonnation Systems Manager provided for in the FY 96 Budget, FY 97 Budget Proposals in infonnation systems improvements and a new records management program in the City Clerk's office. 6. We noted that passwords on the new financial accounting system are required to be at least two characters in length and are never required to be changed. Two characters is too short to allow for a secure, hard-to-guess password. Periodic forced password changes serves as an important control should a user's password ever be compromised. In addition, we noted that the Finance Director mew many employees' passwords. We recommend that passwords be required to be at least six characters in length, changed at least every 90 days, and that passwords should not be shared with others. Management's ResDonse: Management directives have been issued to implement this recommendation immediately. 7. As the year 2000 approaches, every organization utilizing computers is potentially sitting on a time bomb. The year 2000 will be the first century change ever endured by an automated society. The vast majority of computer applications in use throughout the world today have date processing logic based on a two-digit year. The two-digit year representation and associated logic may produce incorrect results or fail due to invalid data. Errors will occur in abundance when the two-digit year becomes "00". Systems projects can require as much as two to four years to complete, from the planning phase to the actual implementation. The year 2000 is an absolute deadline which requires businesses to address the problem, rather than ignore it or defer it until a later date. Initial indications are that the problem is one of significant order of magnitude and needs to be addressed now in order to implement and test a timely and effective solution. We therefore recommend that the City begin to asses~ the impact of the year 2000 on its systems in order to meet this de.aiUine. Management's ResDonse: ;::;-'-,:-:)~ i':?:: :::-\(l;F\:l (AI, j[))'fj RD '-lrDU) ~\ ~1r l,--"i'-''';'--'ii ii!\,:,,"~,~I/:"\\ln\' U ~ ~ ~ :....:::::,:...:.::JLi..:LI.G~L:. \..1 i...ru LJ U FOR DsSCUSSION PURPOSES ONLY Management directives have been issued to our software supplier to resolve this problem as recommended. 68 I I I I I I I I I I I I I I I I I I I 8. We noted that the new utility system implementation is severely behind schedule. We further noted that no workplans, GANNT charts, or time-lines are available to serve as a guide to the implementation or to report on the status of the project. We recommend that such documentation be developed so that a final implementation date can be developed and that management will have a tool with which to monitor the project. Manaf:ement's ResDonse: A Capital Projects Manager has been included in the FY 97 Budget to implement these recommendations. 9, We noted that a business continuity plan for the computer system and for the general operations of the City as a whole has not been developed. Such plans are important in that they provide guidance for continuity of operations in the event of a disaster. We recommend that a business continuity plan be developed. Key elements of the plan should include: · Business Impact Analysis: Identify and detennine the types and levels of impact (loss) resulting from the vulnerability of computer assets or operational functions. Prioritize the applications and supporting hardware according to their criticality. Alternate Strategy Analysis: Select the appropriate alternative processing strategy for use in the event of a disruption to the business operations. This includes off-site processing location arrangements as well as roles and responsibilities for recovering the applications, processing schedules and communication to users of alternate procedures. Furthermore; once a plan has been developed, it should be tested to identify any unforeseennproblems and help to ensure that the plan will in fact work when needed. Mana.eement's ResDonse: Management will begin working on these recommendations in FY 97. As discussed, this is a mid-range undertaking that will require two to three years to complete. : :)! D) !l_'n n:-\ (1'11\ n IA\ 1f3)\\7 rr:\' /D) fr.\ re~ Lf-'Uu~1 ~UU~AjlIU\:JLQ~u~ If lQ)lFu~u lJ FOR D~SCUSSiON PURPOSES ONLY 69