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Home My WebLink About2013 03 25 Regular 600 CAFR (Comprehensive Annual Financial Report)COMMISSION AGENDA ITEM 600 March 25, 2013 Regular Meeting Informational Consent Public Hearings Regular X KS SB City Manager Department REQUEST: The City Manager is requesting City Commission acceptance of the Comprehensive Annual Financial Report (CAFR) as presented for the Fiscal Year Ended September 30, 2012. SYNOPSIS: The presentation of the Comprehensive Annual Financial Report for the fiscal year ended September 30, 2012 by the auditors, McDirmit Davis & Company, LLC. CONSIDERATIONS: The CAFR is prepared and presented to give the City Commission, citizens, and other users a greater understanding of the City's financial standing. Our 2012 financial statements received an unqualified opinion (best possible) by the auditors. Additionally, the 2012 CAFR will be submitted to the Government Finance Officers Association (GFOA) for consideration for their Certificate of Achievement award as we believe it continues to conform to the program's stringent requirements. The City's CAFR has been awarded the GFOA's Certificate of Achievement award for the past twelve consecutive years. FISCAL IMPACT: This report has no direct financial impact on the City. However, the information presented in the CAFR is used by investors and citizens to help determine the overall financial health of the City of Winter Springs. Regular 600 PAGE 1 OF 2 - March 25, 2013 COMMUNICATION EFFORTS: This Agenda Item has been electronically forwarded to the Mayor and City Commission, City Manager, City Attorney /Staff, and is available on the City's Website, LaserFiche, and the City's Server. Additionally, portions of this Agenda Item are typed verbatim on the respective Meeting Agenda which has also been electronically forwarded to the individuals noted above, and which is also available on the City's Website, LaserFiche, and the City's Server; has been sent to applicable City Staff, Media/Press Representatives who have requested Agendas /Agenda Item information, Homeowner's Associations/Representatives on file with the City, and all individuals who have requested such information. This information has also been posted outside City Hall, posted inside City Hall with additional copies available for the General Public, and posted at five (5) different locations around the City. Furthermore, this information is also available to any individual requestors. City Staff is always willing to discuss this Agenda Item or any Agenda Item with any interested individuals. Additionally, the 2012 CAFR will be posted to the City's website within one week of acceptance. RECOMMENDATION: It is recommended that the Commission accept the Comprehensive Annual Financial Report (CAFR) as presented for the fiscal year ended September 30, 2012. ATTACHMENTS: • Comprehensive Annual Financial Report for the fiscal year ended September 30, 2012. Regular 600 PAGE 2 OF 2 - March 25, 2013 This page intentionally left blank. Ý·¬§±ºÉ·²¬»®Í°®·²¹ôÚ´±®·¼¿ ÝÑÓÐÎÛØÛÒÍ×ÊÛßÒÒËßÔÚ×ÒßÒÝ×ßÔÎÛÐÑÎÌ Ú±®Ì¸»Ç»¿®Û²¼»¼Í»°¬»³¾»®íðôîðïî Ð®»°¿®»¼¾§æ Ú·²¿²½»¿²¼ß¼³·²·¬®¿¬·ª»Í»®ª·½»Ü»°¿®¬³»²¬ This page intentionally left blank. INTRODUCTORY SECTION This section contains the following subsections: Table of Contents Letter of Transmittal GFOA Certificate of Achievement List of Principal Officials Organizational Chart This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Year Ended September 30, 2012 Page I. Introductory Section: Table of Contents i-iii Letter of Transmittal iv-vii GFOA Certificate of Achievement viii List of Principal Officials ix Organizational Chart x II. Financial Section: Independent Auditor’s Report 1-2 Management’s Discussion and Analysis 3-17 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets 18 Statement of Activities 19 Fund Financial Statements: Balance Sheet - Governmental Funds 20-21 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 22 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 23-24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 25 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: General Fund 26-27 Road Improvements Special Revenue Fund 28 Solid Waste/Recycling Special Revenue Fund 29 Statement of Net Assets - Proprietary Funds 30 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds 31 Statement of Cash Flows - Proprietary Funds 32-33 Statement of Fiduciary Net Assets - Fiduciary Funds 34 Statement of Changes in Fiduciary Net Assets - Fiduciary Funds 35 Ã CITY OF WINTER SPRINGS, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Year Ended September 30, 2012 Page II. Financial Section - Continued: Notes to Financial Statements 36-73 Required Supplementary Information 74-77 Combining and Individual Fund Statements and Schedules: Major Governmental Funds: Schedule of Revenues and Expenditures and Changes in Fund Balance - Budget and Actual: TLBD Debt Service Fund 78 Central Winds GO Debt Service Fund 79 Nonmajor Governmental Funds: Combining Balance Sheet - Nonmajor Governmental Funds 80-85 Combining Statement of Revenues, Expenditures and Changes In Fund Balances - Nonmajor Governmental Funds 86-91 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Special Revenue Funds 92-103 Debt Service Funds 104-107 Capital Projects Funds 108-112 III. Statistical Section: Financial Trends Net Assets by Component 113 Changes in Net Assets 114-115 Governmental Activities Tax Revenues by Source 116 Fund Balances of Governmental Funds 117 Changes in Fund Balances of Governmental Funds 118-119 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 120 Property Tax Rates, Direct and Overlapping Governments 121 Special Assessment Billings and Collections 122 Principal Property Taxpayers 123 Property Tax Levies and Collections 124 ÃÃ CITY OF WINTER SPRINGS, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Year Ended September 30, 2012 Page III. Statistical Section - Continued: Debt Capacity Legal Debt Margin 125 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita 126 Ratio of Outstanding Debt by Type 127 Direct and Overlapping Governmental Activities Debt 128 Pledged-Revenue Coverage 129-130 Demographic and Economic Information Demographic and Economic Statistics 131 Principal Employers 132 Operating Information Budgeted Full-time Equivalent City Government Employees by Function 133 Operating Indicators by Function 134-135 Capital Asset Statistics by Function 136 IV. Other Reports: Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With [[986,1679,1665,1732][11][,I,][Arial]]Government Auditing Standards [[1638,1679,2356,1731][11][,,][Arial]] 137-138 Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each State Project and on Internal Control Over Compliance in Accordance with Chapter 10.550, Rules of the Auditor General 139-140 Schedule of Expenditures of State Financial Assistance 141 Notes to Schedule of State Financial Assistance 142 Schedule of Findings and Questioned Costs 143 Management Letter 144-145 Communication with Those Charged with Governance 146-148 Affidavit of Impact Fee Compliance 149 ÃÃÃ This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA LIST OF PRINCIPAL OFFICIALS September 30, 2012 ELECTED OFFICIALS MAYORCharles A. Lacey DEPUTY MAYOR / COMMISSIONER Joanne M. Krebs Rick Brown COMMISSIONER COMMISSIONERAvery Smith COMMISSIONERCade Resnick COMMISSIONERJean Hovey CITY MANAGER Kevin L. Smith CITY CLERK Andrea Lorenzo-Luaces LEGAL COUNSEL Anthony Garganese Brown, Garganese, Weiss & D’Agresta, P.A. DEPARTMENT DIRECTORS COMMUNITY DEVELOPMENT Randy Stevenson FINANCE/ADMIN SERVICES Shawn Boyle INFORMATION SERVICES Joanne Dalka PARKS AND RECREATION Chris Caldwell POLICE CHIEF Kevin Brunelle UTILITY/PUBLIC WORKS Kipton Lockcuff ix This page intentionally left blank. FINANCIAL SECTION This page intentionally left blank. INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Commissioners [[300,787,958,840][11][,I,][Arial]]City of Winter Springs, Florida We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the [[300,1051,976,1104][11][,I,][Arial]]City of Winter Springs, Florida [[951,1051,2300,1103][11][,,][Arial]], as of and for the year ended September 30, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in [[2002,1367,2300,1420][11][,I,][Arial]]Government [[299,1420,714,1473][11][,I,][Arial]]Auditing Standards [[686,1420,2299,1472][11][,,][Arial]], 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 opinions. In our opinion the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the [[1503,1947,2143,2000][11][,I,][Arial]]City of Winter Springs, Florida [[2118,1947,2300,1999][11][,,][Arial]], as of September 30, 2012 and the respective changes in financial position, and cash flows, where applicable, thereof and the respective budgetary comparisons for the general fund, road improvement special revenue fund, and the solid waste/recycling special revenue fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with [[731,2316,1439,2369][11][,I,][Arial]]Government Auditing Standards [[1412,2316,2300,2368][11][,,][Arial]], we have also issued a report dated February 18, 2013 on our consideration of the [[1273,2368,1922,2421][11][,I,][Arial]]City of Winter Springs, Florida [[1898,2368,2300,2420][11][,,][Arial]]'s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit preformed in accordance with[[398,2685,1107,2738][11][,I,][Arial]]Government Auditing Standards [[1074,2685,2300,2737][11][,,][Arial]]and should be considered in assessing the results of our audit. MD&CLLC CDIRMITAVIS OMPANY, ERSSOF 605 .OBINSONTREET,UITE 635 RLANDO,LORIDA 32801 TFE ELEPHONE: 407-843-5406 AX: 407-649-9339 MAIL: INFO@MCDIRMITDAVIS.COM MPCPSAIOCPAFIOCPA EMBERS: RIVATE OMPANIES RACTICE ECTION MERICAN NSTITUTE FERTIFIED UBLIC CCOUNTANTS LORIDA NSTITUTE FERTIFIED UBLIC CCOUNTANTS 1 Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the pension and other postemployment benefits disclosures on pages 3 through 17 and 74 through 77 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s discussion responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Winter Springs, Florida’s financial statements as a whole. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of expenditures of state financial assistance is presented for purposes of additional analysis as required by Chapter 10.550, [[300,1415,963,1468][11][,I,][Arial]]Rules of the Auditor General [[923,1415,2300,1467][11][,,][Arial]] is also not a required part of the financial statements. The combining and individual nonmajor fund financial statements and schedules and the schedule of expenditures of state financial assistance are the responsibility of management and were derived from and related directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory section and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. February 18, 2013 2 MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Winter Springs we offer readers of the City of Winter Springs’ financial statements this narrative overview and analysis of the financial activities of the City of Winter Springs for the fiscal year ended September 30, 2012. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal which can be found on pages iv - vii of this report. Financial Highlights The assets of the City of Winter Springs exceeded its liabilities at the close of the most recent fiscal year by $91,425,141 (net assets). Of this amount, $ 21,348,858 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors. The government’s total net assets increased by $4,275,448 or 5%. As of the close of the current fiscal year, the City of Winter Springs’ governmental funds reported combined ending fund balances of $20,281,279. Approximately 38% of this total amount, $7,621,838, is available for spending at the government’s discretion (unassigned fund balance). At the end of the current fiscal year, unassigned fund balance for the general fund was $7,838,858, or 53% of total general fund expenditures. The City of Winter Springs’ total debt decreased by $816,318 (2%) during the current fiscal year. Overview of the Financial Statements The financial statements focus on both the City as a whole (government-wide) and on the major individual funds. Both perspectives (government-wide and major fund) allow the user to address relevant questions, broaden a basis for comparison (year-to-year or government-to-government) and enhance the City’s accountability. This discussion and analysis are intended to serve as an introduction to the City of Winter Springs’ basic financial statements, which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The [[1357,2432,1724,2485][11][,I,][Arial]]government-wide [[1735,2432,2178,2485][11][,I,][Arial]]financial statements [[2150,2432,2300,2484][11][,,][Arial]] are designed to provide readers with a broad overview of the City of Winter Springs’ finances, in a manner similar to a private-sector business. The S[[422,2643,908,2696][11][,I,][Arial]]tatement of Net Assets [[880,2643,2300,2695][11][,,][Arial]] presents information on all of the City of Winter Springs’ assets and liabilities, with the difference between the two reported as [[1505,2696,1743,2749][11][,I,][Arial]]net assets [[1716,2696,2300,2748][11][,,][Arial]]. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Winter Springs is improving or declining. 3 MANAGEMENT’S DISCUSSION AND ANALYSIS Overview of the Financial Statements (Continued) Government-wide financial statements. (Continued) The S[[434,572,902,625][11][,I,][Arial]]tatement of Activities [[874,572,2300,624][11][,,][Arial]] presents information showing how the government’s net assets changed during the fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, [[1148,677,2131,730][11][,I,][Arial]]regardless of the timing of related cash flows [[2103,677,2300,729][11][,,][Arial]]. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Winter Springs that are principally supported by taxes and intergovernmental revenues ([[1980,941,2300,994][11][,I,][Arial]]governmental [[300,994,497,1047][11][,I,][Arial]]activities [[469,994,2299,1046][11][,,][Arial]]) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges ([[934,1046,1419,1099][11][,I,][Arial]]business-type activities [[1391,1046,2300,1098][11][,,][Arial]]). The governmental activities of the City of Winter Springs include general government, public safety, physical environment and culture and recreation. The business-type activities of the City of Winter Springs include a Water and Sewer Utility, Stormwater Utility and Development Services. The government-wide financial statements include only the City of Winter Springs itself (known as the [[379,1363,819,1416][11][,I,][Arial]]primary government [[782,1363,2300,1415][11][,,][Arial]]). The City of Winter Springs had no component units. The Water and Sewer Utility, the Stormwater utility, and Development Services function as departments of the City of Winter Springs, and therefore, have been included as an integral part of the primary government. The government-wide financial statements can be found on pages 18-19 of this report. Fund financial statements. A[[963,1731,1075,1784][11][,I,][Arial]]fund [[1050,1731,2300,1783][11][,,][Arial]] is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Winter Springs, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Winter Springs can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. [[774,2100,1274,2153][11][,I,][Arial]] Governmental funds [[1246,2100,2300,2152][11][,,][Arial]] are used to account for essentially the same functions reported as [[787,2153,1286,2206][11][,I,][Arial]]governmental activities [[1259,2153,2312,2205][11][,,][Arial]] in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on [[505,2259,1683,2312][11][,I,][Arial]]near-term inflows and outflows of spendable resources [[1655,2259,2035,2311][11][,,][Arial]], as well as on [[2010,2259,2300,2312][11][,I,][Arial]]bala nces of [[300,2311,747,2364][11][,I,][Arial]]spendable resources [[719,2311,2299,2363][11][,,][Arial]] available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for [[1613,2522,2037,2575][11][,I,][Arial]]governmental funds [[2009,2522,2299,2574][11][,,][Arial]] with similar information presented for [[813,2575,1294,2628][11][,I,][Arial]]governmental activities [[1267,2575,2300,2627][11][,,][Arial]] in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between [[979,2786,1398,2839][11][,I,][Arial]]governmental funds [[1370,2786,1506,2838][11][,,][Arial]] and [[1469,2786,1948,2839][11][,I,][Arial]]governmental activities [[1921,2786,1971,2838][11][,,][Arial]]. 4 MANAGEMENT’S DISCUSSION AND ANALYSIS Overview of the Financial Statements (Continued) Governmental Funds. (Continued) The City of Winter Springs maintains 26 individual governmental funds. Information is presented separately in the governmental fund Balance Sheet and in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund, Road Improvements Special Revenue Fund, Solid Waste/Recycling Special Revenue Fund, TLBD Debt Service Fund, and Central Winds GO Debt Service Fund, all five of which are considered to be major funds. Data from the other 21 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds in provided in the form of [[524,941,1007,994][11][,I,][Arial]]combining statements [[970,941,1491,993][11][,,][Arial]]elsewhere in this report. The City of Winter Springs adopts an annual appropriated budget for all governmental funds. Budgetary comparison statements have been provided for the General Fund, Road Improvements Special Revenue Fund, and Solid Waste/Recycling Special Revenue Fund to demonstrate compliance with this budget on pages 26-29. Budgetary comparison schedules have been provided for the TLBD Debt Service Fund, Central Winds GO Debt Service Fund and the nonmajor funds on pages 78-79 and 92-112. The basic governmental fund financial statements can be found on pages 20-25 of this report. Proprietary funds. The City of Winter Springs maintains one type of proprietary fund. [[2047,1521,2300,1574][11][,I,][Arial]]Enterprise [[300,1573,459,1626][11][,I,][Arial]]funds [[439,1573,1639,1625][11][,,][Arial]]are used to report the same functions presented as [[1619,1573,2143,1626][11][,I,][Arial]]business-type activities [[2123,1573,2300,1625][11][,,][Arial]]in the government-wide financial statements. The City of Winter Springs uses enterprise funds to account for the Water and Sewer Utility, Stormwater Utility and Development Services department. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water and Sewer Utility, Stormwater Utility, and Development Services. The basic proprietary fund financial statements can be found on pages 30-33 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are [[1463,2153,1564,2206][11][,I,][Arial]]not [[1526,2153,2300,2205][11][,,][Arial]] reflected in the government-wide financial statement because the resources of those funds are [[1555,2206,1656,2259][11][,I,][Arial]]not [[1632,2206,2300,2258][11][,,][Arial]]available to support the City of Winter Springs’ own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on pages 34- 35 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 36-73 of this report. Required Supplementary Information (RSI). RSI can be found on pages 74-77 of this report. Other information. The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the Notes to Financial Statements. Combining and individual fund statements and schedules can be found on pages 80-112 of this report. 5 MANAGEMENT’S DISCUSSION AND ANALYSIS Government-wide Financial Analysis Statement of Net Assets. As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City of Winter Springs, assets exceeded liabilities by $91,425,141 at the close of the most recent fiscal year. Of the City of Winter Springs’ net assets ($61,264,654 or 67%) reflects its investment in capital assets (e.g., land, buildings, machinery and equipment); less any related outstanding debt used to acquire those assets. The City of Winter Springs uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Winter Springs’ investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Net assets that are subject to external restrictions as to how they may be used total $8,811,629 (10%). The remaining balance of [[995,1204,1478,1257][11][,I,][Arial]]unrestricted net assets [[1450,1204,2300,1256][11][,,][Arial]] ($21,348,858 or 23%) may be used to meet the government’s ongoing obligations to citizens and creditors. At September 30, 2012, the City of Winter Springs is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. This was also the case at the close of the prior fiscal year. The following table reflects the condensed [[1159,1626,1697,1679][11][,I,][Arial]]Statement of Net Assets [[1662,1626,2313,1678][11][,,][Arial]]for the current and prior year. For more detail see the [[769,1679,1299,1732][11][,I,][Arial]]Statement of Net Assets [[1260,1679,1545,1731][11][,,][Arial]]on page 18. 6 MANAGEMENT’S DISCUSSION AND ANALYSIS Government-wide Financial Analysis (Continued) City of Winter Springs Statement of Net Assets As of September 30 Governmental ActivitiesBusiness-type ActivitiesTotal Primary Government 201220112012201120122011 Assets: Current and other assets27,435,582$ 26,763,001$ 9,534,171$ $ 7,811,320$ 34,574,32136,969,753$ Restricted assets 277,887263,469730,823 730,3151,008,710 993,784 Capital assets 58,670,56459,540,83237,861,911 35,713,64396,532,475 95,254,475 Total assets 86,384,033 86,567,302 48,126,905 44,255,278 130,822,580134,510,938 Liabilities: Current liabilities 1,070,6301,124,981873,012 626,4401,943,642 1,751,421 Long term liabilities 19,266,87519,690,12220,924,537 21,317,35740,191,412 41,007,479 Other liabilities 277,887 263,469 672,856 650,518 950,743 913,987 Total liabilities 20,615,392 21,078,572 22,470,405 22,594,315 43,085,797 43,672,887 Net assets: Invested in capital assets, net of related debt 40,328,07543,960,52320,936,579 17,973,09361,264,654 61,933,616 Restricted 8,304,6928,287,147506,937 460,4908,811,629 8,747,637 Unrestricted 17,135,874 13,241,060 4,212,984 3,227,380 21,348,858 16,468,440 Total net assets$ 65,488,73065,768,641$ 25,656,500$ 21,660,963$ 91,425,141$ 87,149,693$ Statement of Changes in Net Assets. The following table reflects the [[1789,1947,2300,2000][11][,I,][Arial]]Statement of Changes [[300,2000,622,2053][11][,I,][Arial]]in Net Assets [[585,2000,2025,2052][11][,,][Arial]]for the current and prior year. For more detailed information see the [[1989,2000,2300,2053][11][,I,][Arial] ]Statement of [[299,2053,508,2106][11][,I,][Arial]]Activities [[481,2053,786,2105][11][,,][Arial]] on page 19. Note that the government’s total net assets increased by $4,275,448 or 5% in fiscal year 2012. The previous fiscal year, 2011, net assets increased by $919,766. Governmental activities increased net assets by $279,911 in fiscal year 2012 compared to an increase of $92,136 in 2011. The increase in net assets is primarily due to a reduction in governmental spending for all general government, public safety, physical environment and culture and recreation departments. Additionally, there was a decrease in interest expense as a result of two bond refundings and the reduction of outstanding long-term debt as a result of principal payments of the debt. Business-type activities increased net assets by $3,995,537 in fiscal year 2012 compared to an increase of $827,630 in 2011. This is primarily a result of the Water Sewer Utility Fund due to fee increases and new services. User charges and connection fees increased by $526,000 and $403,000 respectively. Capital contributions increased by $886,000, and insurance proceeds by $100,000. The Water Sewer Utility also experienced a significant drop in expenditures; salaries and benefits are down $270,000; materials and supplies are down $97,000 and interest expense is down $262,000 as a result of refinancing debt in fiscal year 2011. Additionally, 7 MANAGEMENT’S DISCUSSION AND ANALYSIS Government-wide Financial Analysis (Continued) Statement of Changes in Net Assets. (Continued) Development Services saw an increase in building and other permitting revenues of $470,000 as new projects have been permitted. Following the [[585,730,1104,783][11][,I,][Arial]]Changes in Net Assets [[1068,730,2300,782][11][,,][Arial]]table is a series of bar and pie charts that relay in pictorial form the revenues and expenses for each of the governmental and business-type activities as well as the revenue “source” for each. Additional information regarding the changes in fund balance of the governmental and business- Financial Analysis of Government’s Funds type activities can be found in the section entitled on page 12. Note that the first graph depicts governmental program-specific revenues and expenses. For this graph the revenue does not include property taxes, utility taxes, business tax receipts, intergovernmental revenue, investment income or miscellaneous revenue. This chart is intended to show the amount of program expenses funded by [[1559,1310,1739,1363][11][,I,][Arial]]specific [[1724,1310,2158,1362][11][,,][Arial]]program revenues. Note that the Development Services Fund shows direct revenues approximately equal to direct expenses excluding the allocation of overhead as transfers out. Increase in water and sewer revenues are due in part to increased consumption and rates and decreases in operational expenditures and the refinancing of debt. 8 MANAGEMENT’S DISCUSSION AND ANALYSIS Government-wide Financial Analysis (Continued) Statement of Changes in Net Assets. (Continued) 9 MANAGEMENT’S DISCUSSION AND ANALYSIS Government-wide Financial Analysis (Continued) Statement of Changes in Net Assets. (Continued) Ù±ª»®²³»²¬¿´Ð®±¹®¿³Í°»½·º·½Î»ª»²«»¿²¼ Û¨°»²» ,Ë444Ë444 -Ë444Ë444 .Ë444Ë444 /Ë444Ë444 0Ë444Ë444 Æ`ªk 1Ë444Ë444 Zª 2Ë444Ë444 3Ë444Ë444 4 ùª±Ék±ÃÂøYÉÆYÃ±k±kñª£ª ù£`ª«ªª`Ã£ª«ªÆÃ£ªâ£ªÐ¼« Ù±ª»®²³»²¬¿´Î»ª»²«»¾§Í±«®½» ñª`«ªñª£« ªÜÃ±±ª£k 1ç ÆÐø£Â`Ã ¼Z 12ç 02ç ñªÐ£`ª«ª± Æ`ªk Ã±ª 3.ç ÕÃªÐùª ª£ªÃkÃ£ª -ç 10 MANAGEMENT’S DISCUSSION AND ANALYSIS Government-wide Financial Analysis (Continued) Statement of Changes in Net Assets. (Continued) Þ«·²»¬§°»ß½¬·ª·¬·» Î»ª»²«»¿²¼Û¨°»²» 32Ë444Ë444 34Ë444Ë444 ,Ë444Ë444 Æ`ªk .Ë444Ë444 Zª 0Ë444Ë444 2Ë444Ë444 4 ¬ªÂ_`±£«ªÂ`ÃÂ£«_ Þ«·²»¬§°»ß½¬·ª·¬·» Î»ª»²«»¾§Í±«®½» ñª`«ª ñª£«ª Ã±ª ÜÃ±±ª£k ÕÃªÐùª ª£ªÃkÃ£ª 3ç 3.ç ÆÐø£ Â`Ã ,1ç 11 MANAGEMENT’S DISCUSSION AND ANALYSIS Financial Analysis of the Government’s Funds As noted earlier, the City of Winter Springs uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the City of Winter Springs’ [[1720,625,2160,678][11][,I,][Arial]]governmental funds [[2133,625,2301,677][11][,,][Arial]] is to provide information on near-term inflows, outflows, and balances of [[1680,677,1916,730][11][,I,][Arial]]spendable [[1892,677,2301,729][11][,,][Arial]] resources. Such information is useful in assessing the City of Winter Springs’ financing requirements. In particular,[[524,783,1077,836][11][,I,][Arial]]unassigned fund balance [[1052,783,2300,835][11][,,][Arial]] may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of September 30, 2012, the City of Winter Springs’ governmental funds reported combined ending fund balances of $20,281,279, an increase of $562,752 over the prior year. Approximately 38% or $7,621,838 of this total amount constitutes unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is restricted, committed or assigned to indicate that it is not available for new spending because it has already been committed for such purposes as debt service, capital projects, inventories and prepaid costs. The general fund is the chief operating fund of the City of Winter Springs. At the end of the current fiscal year, unassigned fund balance of the General Fund was $7,838,858, while total fund balance was $8,831,972. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned and total fund balance represents 53 and 60% respectively, of total General Fund expenditures. The increase in fund balance is a result of reducing general fund operating expenditures and aggressive management of the budget through periodic reviews and adjusting expenditures when appropriate without compromising services. Proprietary Funds. The City of Winter Springs’ proprietary funds provide the same type of information found in the government-wide financial statements but in more detail. Unrestricted net assets of the Water and Sewer Utility Fund at the end of the year amounted to $3,300,375 and total net assets increased $3,127,189. This increase is primarily a result of increases rates and decreases in operating expenses and interest expense due to debt refinancing. The Development Services Fund net assets increased $470,602 to a deficit balance of $236,181 at the end of the fiscal year. New construction permits began to pick up during the year. The net assets have increased as a result of the improving real estate and construction markets. Several new residential housing projects in the City have resulted in a significant increase in permitting, plans review and other permitting fees. The Stormwater Utility Fund net assets increased $397,746 to $7,966,222 at the end of the fiscal year. The increase in net assets is primarily a result of an increase in service revenues and builders’ capital contributions related to donations of Stormwater infrastructure in newly constructed subdivisions. 12 MANAGEMENT’S DISCUSSION AND ANALYSIS General Fund Budgetary Highlights Differences between the original General Fund budget and the final amended General Fund budget resulted in $110,895 more in appropriations from fund balance during the year from an appropriation from fund balance of $607,373 in the original budget to appropriations from fund balance of $718,268 in the final budget. The increase in budgeted appropriations is due to a purchase order rollover related to the Community Redevelopment Shepard Road Streetscape and a supplemental appropriation for data processing equipment and software. The actual results of General Fund for the year show an appropriation to fund balance of $1,155 compared to a final budgeted appropriation from fund balance of $718,268. The favorable variance of $719,423 is primarily comprised of the following: $184,000 unfavorable Electricity Tax revenues $126,000 unfavorable Electricity Franchise Fees $193,000 unfavorable grant reimbursement (timing difference FY13) $582,000 favorable payroll variance which largely results from positions which were unfilled for all or part of the fiscal year; namely, Project Manager (Executive); Senior Accountant (Finance and Administrative Services); Systems Administrator and Web Multi-Media Technician (Information Services); Parks Supervisor (Parks and Recreation); and various other short-term vacancies in Public Works and Parks and Recreation. $481,000 favorable operating expenditure variance spread throughout more than 30 divisions which resulted from 92% utilization of operating budget (exclusive of personnel and exclusive of revenue neutral Traffic Light Enforcement billing services). $109,000 favorable capital expenditure variance spread across a number of departments (Community Development $27,000; Police $62,000; Parks and Recreation $20,000) The comparison of budgeted results to actual results for the General Fund is shown on pages 26-27. Capital Asset and Debt Administration Capital assets. The City of Winter Springs’ investment in capital assets for its governmental and business-type activities as of September 30, 2012, amounts to $96,532,475 (net of accumulated depreciation), for an increase of $1,278,000 over the prior year. This investment in capital assets includes land, buildings, improvements, machinery and equipment, intangibles, park facilities, roads, highways, and bridges. The total increase in the City of Winter Springs’ investment in capital assets for the current fiscal year was 1% (a 1.4% decrease for governmental activities, and a 5.7% increase for business-type activities). Major capital asset events during the current fiscal year included the following: The completion and capitalization of the following projects: Road reconstruction and resurfacing totaling almost $366,000; o The completion of the Oak Forest water reclamation facility at a cost of $114,900 o ($1,636,000 was spent in prior years); The purchase of new vehicles for the Police Department at a cost of $197,600; o The purchase and implementation of a new VoIP equipment and software to o enhance customer service at a cost of $292,500; 13 MANAGEMENT’S DISCUSSION AND ANALYSIS Capital Asset and Debt Administration (Continued) Capital assets. (Continued) Various other stomwater improvements totaling nearly $105,000. o The continued construction on the following projects: Construction of Michael Blake Boulevard linking State Road 434 to Winter o Springs Village at a cost of $294,000 ($277,000 was spent in prior years); CRA Shepard Road Landscape (pictured on the cover) at a cost of $439,000 o ($82,000 was spent in prior years); Construction of the Lake Jessup water augmentation facility at a cost of o $2,292,000 ($54,000 was spent in prior years). The ongoing construction of the following new projects: Central Winds Park Stormwater improvement at a cost of $56,000. o Additional information on the City of Winter Springs’ capital assets can be found in Note 7 on pages 54-56 of this report. City of Winter Springs Capital Assets (Net of Depreciation) As of September 30 Governmental ActivitiesBusiness-type ActivitiesTotal Primary Government 201220112012201120122011 Land$ 9,959,395$ 9,959,395$ 7,170,177$ 7,170,177$ 17,129,57217,129,572$ Buildings8,144,6078,569,277214,270239,3888,358,877 8,808,665 Improvements other than buildings7,720,6138,146,46827,316,00024,335,61835,036,613 32,482,086 Machinery and equipment1,304,4361,386,377 577,282692,368 1,881,718 2,078,745 Intangibles236,86254,511 9,92114,683 246,783 69,194 Infrastructure30,004,39730,859,490 - 30,004,397- 30,859,490 Construction in progress1,300,254565,314 2,574,2613,261,409 3,874,515 3,826,723 Total 58,670,564$ 59,540,832$ 37,861,911$ 35,713,643$ 96,532,475$ 95,254,475$ Long-term debt. At September 30, 2012, the City of Winter Springs had total debt outstanding of $40,191,164, a decrease of $816,318 from $41,007,479 at September 30, 2011. Total [[300,2508,477,2561][11][,I,][Arial]]bonded [[467,2508,2300,2560][11][,,][Arial]]debt of the City at the end of the current fiscal year was $14,035,703, for a decrease of $5,201,374 over the prior year. This amount does not include accreted interest of $7,229,504. The City of Winter Springs’ bonded debt represents bonds and notes secured solely by specified revenue sources (i.e., revenue bonds and notes). During 2012, the City refunded $4,595,000 of governmental bonds. There are no limitations placed on the amount of debt the City may issue either by the City’s charter, code of ordinances or by the Florida State Statutes. 14 MANAGEMENT’S DISCUSSION AND ANALYSIS Capital Asset and Debt Administration (Continued) Long-term debt. (Continued) Additional information on the City of Winter Springs’ long-term debt can be found in Note 8 on pages 56-62 of this report. City of Winter Springs Long Term Debt As of September 30 Governmental ActivitiesBusiness-type ActivitiesTotal Primary Government 201220112012201120122011 Improvement Refunding Revenue Bonds, Series 19993,498,970$ $ 3,498,970$ -$ 3,498,970-$ $ 3,498,970 Water & Sewer Refunding Revenue Bonds, Series 2000 - 5,669,191- 5,669,191 5,669,191 5,669,191 Special Assessment Revenue Bonds, Series 2001 1,825,000- - - 1,825,000- Limited General Obligation Bonds, Series 2002 2,770,000- - - 2,770,000- Improvement Refunding Revenue Bonds, Series 20035,430,000 6,115,000 - 5,430,000- 6,115,000 Capital Improvement Revenue Note, Series 2006 141,890 179,805 - 141,890- 179,805 Revenue Refunding Note Series 2011 1,353,398 1,377,246 - 1,353,398- 1,377,246 Special Assessment Revenue Notes, Series 2011 1,765,000 - 1,765,000 - Limited General Obligation Note, Series 2012 2,739,107 - 2,739,107 - Revenue Refunding Note Series 2011A - 7,629,676- 8,464,906 7,629,676 8,464,906 Revenue Refunding Note Series 2011B - 792,377- 870,617 792,377 870,617 Revenue Refunding Note Series 2011C - 3,730,050- 3,730,050 3,730,050 3,730,050 Accreted Interest Payable 3,596,775 3,212,439 3,632,729 3,211,189 7,229,504 6,423,628 Compensated Absences 632,710 589,738 156,846 158,093 789,556 747,831 Other Post Employment Benefits218,701 165,300 71,048 56,700 289,749 222,000 Adjustments for Issuance Discounts and Deferred Refunding Costs (109,676) (43,376) (757,631) (843,389) (867,307) (886,765) Total$ 19,690,12219,266,875$ 20,924,286$ 21,317,357$ 40,191,161$ 41,007,479$ Economic Factors and Next Year’s Budgets and Rates Winter Springs is primarily a residential community serving just under 34,000 residents and is just 15 miles north of the City of Orlando, one of Florida’s largest metropolitan statistical areas. Winter Springs was also recognized by Money Magazine in 2011 as one of our country's "Best Places to Live." 15 MANAGEMENT’S DISCUSSION AND ANALYSIS Economic Factors and Next Year’s Budgets and Rates (Continued) Where many municipal and county governments have raised property taxes, through conservative fiscal policies and aggressive management of the budget, the City Manager and City Commission have been able to reduce property taxes for the upcoming fiscal year while not reducing services. The City has embarked on a plan to increase its commercial tax base by marketing the City as an outstanding venue for economic development. Both the Director of Economic Development and the Community Development Department are focused on a strong, strategic economic development plan to attract commercial growth within the City. The City is looking both internally such as reviewing outdated ordinances and externally such as sites available for land development and meetings with members of the business community. With its close proximity to the University of Central Florida and Research Park, Winter Springs offers excellent opportunities for the development of high technology industries. Situated on the eastern edge of the City, Seminole Way is a strategic economic development initiative focused on attracting high value jobs and businesses to Seminole County. The State Road 417 (Central Florida Greeneway) corridor defines the boundaries of the Seminole Way district, spanning the length of Seminole County and connecting to both Orange County's "Innovation Way" and the "Medical City" located at Lake Nona. The City has targeted this Greeneway Interchange District (GID) for technology industry development complemented by commercial and retail establishments. It is expected to become a premier employment center with professional and high tech office buildings, conference facilities, and hotel rooms. The City’s ability to expand and diversify its tax base will be a major factor in providing additional financial resources to fund an increasing demand for services. The many residential projects throughout the City is indicating a turn in the economy. As some projects are coming to completion such as Jessup’s Reserve, Winter Springs Village, others are getting underway such as Jessup’s Landing, Amberlee and Moss Park, a mixed use project in the heart of Winter Springs business area. The City is working towards annexing land in the north west part of the City which will bring in commercial sties as well as land for future development. Long Term Financial Planning The total taxable assessed property value in Winter Springs decreased 6% from fiscal year 2011 to 2012, $1,687,434,000 to $1,593,864,000 respectively. However, the rate of property tax decreases are showing signs of slowing and the real estate marketing is beginning to stabilize. In fiscal year 2013 the reduction in assessed values is approximately 1%. The real estate market is rebounding and the city will continue to benefit from several geographic and competitive advantages. The primary factors are: Significant undeveloped land, both residential and commercial Comparatively low tax rates Current commercial and residential development presently under construction and in planning The national and state economies play a key role in assessing the City’s financial future. While economic changes at the state and national level often lead to reduction in tax receipts the City has remained vigilant, flexible and proactive with corresponding changes in expenditures. 16 MANAGEMENT’S DISCUSSION AND ANALYSIS Requests for Information This financial report is designed to provide a general overview of the City of Winter Springs’ finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance and Administrative Services Director, 1126 East State Road 434, Winter Springs, Florida, 32708. The Comprehensive Annual Financial Report is also available at the City of Winter Springs’ website located at [[1273,730,1782,783][11][,I,][Arial]]www.winterspringsfl.org [[1757,730,1807,783][11][,I,][Arial]]. 17 This page intentionally left blank. BASIC FINANCIAL STATEMENTS This page intentionally left blank. GOVERNMENT-WIDE FINANCIAL STATEMENTS This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA STATEMENT OF NET ASSETS September 30, 2012 Governmental Business-type ActivitiesActivitiesTotal ASSETS Cash and cash equivalents2,657,007$ 1,244,416$ 3,901,423$ Investments17,643,791 6,694,077 24,337,868 Receivables, net4,267,712 1,592,666 5,860,378 Internal Balances161,287 (161,287) - Inventories - at cost9,871 25,571 35,442 Prepaid costs248,759 399 249,158 Restricted assets: Cash and cash equivalents277,887 - 277,887 Investments- 730,823 730,823 Bond issuance costs72,975 138,329 211,304 Receivables, long-term2,374,180 - 2,374,180 Capital Assets Capital assets not being depreciated 9,744,43811,259,649 21,004,087 Capital assets being depreciated, net of accumulated depreciation 28,117,47347,410,915 75,528,388 Total Assets86,384,033 48,126,905 134,510,938 LIABILITIES Accounts payable and accrued expenses762,493 607,529 1,370,022 Due to other governments99,824 28,685 128,509 Accrued interest payable164,011 236,798 400,809 Net pension obligation34,102 - 34,102 Unearned revenues10,200 - 10,200 Liabilities payable from restricted assets 672,856277,887 950,743 Noncurrent liabilities: Due within one year 1,286,3781,133,633 2,420,011 Due in more than one year18,133,242 19,638,159 37,771,401 Total liabilities20, 22,470,405615,392 43,085,797 NET ASSETS Invested in capital assets, net of related debt 20,936,57940,328,075 61,264,654 Restricted for: Capital projects -1,949,019 1,949,019 Debt Service 14,091254,243 268,334 Renewal and replacement 492,846- 492,846 Physical environment -5,977,194 5,977,194 Public safety -124,236 124,236 Unrestricted 17,135,874 4,212,984 21,348,858 Total net assets65,768,641$ 25,656,500$ 91,425,141$ The accompanying Notes to Financial Statements are an integral part of these statements. 18 This page intentionally left blank. This page intentionally left blank. FUND FINANCIAL STATEMENTS CITY OF WINTER SPRINGS, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2012 Special Revenue Road ImprovementsSolidTLBD Debt General FundFundWaste/RecyclingService Assets: Cash and cash equivalents589,151$ 120,096$ 263,450$ 71,426$ Investments7,956,221 1,103,954 2,421,691 118,277 Receivables, net206,635 3,834,631 225,812 1 Inventories, at cost9,871 - - - Prepaids248,759 - - - Special assessments receivable- - - 1,705,000 Advances to other funds391,157 - - - Restricted assets: Cash and cash equivalents277,887 - - - Total assets$ 5,058,6819,679,681$ 2,910,953$ 1,894,704$ Liabilities and Fund Balances: Accounts payable222,629$ -$ 179,498$ 1,352$ Accrued liabilities216,810 - - - Retainage payable20,359 10,046 - - Due to other funds- - - - Due to other governments99,824 - - - Deferred revenue- 3,834,631 - 1,705,000 Unearned revenue10,200 - - - Payable from restricted assets277,887 - - - Total liabilities847,709 3,844,677 179,498 1,706,352 Fund balances: Non-spendable649,787- - - Restricted- 1,214,004 - 188,352 Committed- - 1,383,575 - Assigned343,327- 1,347,880 - Unassigned7,838,858 - - - Total fund balances8,831,972 1,214,004 2,731,455 188,352 Total liabilities and fund balances9,679,681$ 5,058,681$ 2,910,953$ 1,894,704$ The accompanying Notes to Financial Statements are an integral part of these statements. 20 Central Winds OtherTotal GO Debt GovernmentalGovernmental ServiceFundsFunds $ 1,606,7825,302$ 2,656,207$ 5,994,90648,742 17,643,791 6276 4,267,712 -- 9,871 -- 248,759 669,180- 2,374,180 -- 391,157 800- 278,687 8,272,2954,050$ 27,870,365$4 $ 108,2983,501$ 515,278$ -- 216,810 -- 30,405 229,870- 229,870 -- 99,824 669,180- 6,208,811 -- 10,200 -- 277,887 1,007,3483,501 7,589,085 -- 649,787 3,017,15650,549 4,470,061 303,746- 1,687,321 4,161,065- 5,852,272 7,621,838(217,020) 7,264,94750,549 20,281,279 $ 8,272,2954,050$ 27,870,365$4 21 This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS September 30, 2012 Total fund balance, governmental funds $ 20,281,279 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds. 58,670,564 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 6,208,811 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. (19,430,886) Bond issuance costs, which are expenditures in the funds, are deferred and amortized over the life of the bond. 72,975 The cumulative net pension contribution which is less than the annual required contribution is presented as a liability on the statement of net assets. (34,102) Net Assets of Governmental Activities in the Statement of Net Assets $ 65,768,641 The accompanying Notes to Financial Statements are an integral part of this statement. 22 CITY OF WINTER SPRINGS, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For The Year Ended September 30, 2012 Road ImprovementsSolidTLBD Debt General FundFundWaste/RecyclingService Revenues: Taxes: Property taxes3,733,689$ -$ -$ -$ Utility taxes3,963,093 - - - Business tax receipts105,506 - - - Permits and fees1,820,952 - 94,502 - Intergovernmental revenues3,099,470 - 342,815 - Charges for services583,736 - 2,380,792 - Fines and forfeitures119,221 - - - Impact fees/assessments---60,000 Investment income81,255 11,330 20,985 86,534 Miscellaneous240,665 - - 19,399 Total revenues13,747,587 11,330 2,839,094 165,933 Expenditures: Current: General government4,827,077 - - - Public safety6,534,255 - - - Physical environment966,280 - 2,280,043 31,961 Culture and recreation1,613,198 - - - Debt Service: Principal- - - 1,825,000 Interest and fiscal charges- - - 102,605 Capital Outlay: General government 473,769 - -- Public safety 322,361 - -- Physical environment - 293,970 -- Culture and recreation 13,786 - -- Total expenditures 14,750,726 293,970 2,280,043 1,959,566 Excess (Deficiency) of Revenues Over Expenditures (1,003,139) (282,640) 559,051 (1,793,633) Other Financing Sources (Uses) Notes payable - - 1,765,000- Transfers in 2,201,986 - -- Transfers out (1,197,692) - (132,134) (500) Total other financing sources(uses)1,004,294 - (132,134) 1,764,500 Net Change in Fund Balances 1,155 (282,640) 426,917 (29,133) Fund Balances - Beginning 8,830,817 1,496,644 2,304,538 217,485 Fund Balances - Ending $ 8,831,972$1,214,004$ 2,731,455$188,352 The accompanying Notes to Financial Statements are an integral part of these statements. 23 Central Winds Other Total GO Debt GovernmentalGovernmental ServiceFundsFunds $ -167,640$ 3,901,329$ 3,963,093- 105,506- 15,172- 1,930,626 505,728- 3,948,013 13,995- 2,978,523 91,392- 210,613 999,895939,895 79,658745 280,507 32,574- 292,638 1,678,414168,385 18,610,743 14,515- 4,841,592 49,835- 6,584,090 594,928- 3,873,212 -31,501 1,644,699 746,7632,770,000 5,341,763 230,830151,330 484,765 - 287,984- 761,753 45,968- 368,329 373,219- 667,189 2,400- 16,186 2,346,4422,952,831 24,583,578 (668,028)(2,784,446) (5,972,835) 2,739,107 4,504,107- 55,500 1,653,192 3,910,678 - (548,872) (1,879,198) 2,794,607 1,104,320 6,535,587 10,161 436,292 562,752 40,388 6,828,655 19,718,527 $ 50,549$ 7,264,947$20,281,279 24 This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended September 30, 2012 Net change in fund balances - total governmental funds: $ 562,752 Amounts reported for Governmental Activities in the Statement of Activities are different because: Governmental funds report outlays for capital assets as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period (861,865) The net effect of various miscellaneous transactions involving capital assets (i.e. sales, trade-ins and disposals) is to decrease net assets (23,903) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items 837,656 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in governmental funds 372,993 Special assessment revenue reported in the funds must be eliminated from the statement of activities since revenue was recognized in a prior year (114,741) Pension expenses recorded in the statement of activities which are in excess of the annual required pension contribution are considered to be assets and not expenses of the period (51,980) Transfers of capital assets to proprietary funds 15,500 Some expenses reported in the statement of activities do not require the use of current financial resources and these are not reported as expenditures in governmental funds. (456,501) Change in net assets of governmental activities $ 279,911 The accompanying Notes to Financial Statements are an integral part of these statements. 25 CITY OF WINTER SPRINGS, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Actual Positive Budgeted AmountsAmounts(Negative) OriginalFinal Revenues: Taxes: Property Taxes3,753,305$ 3,753,305$ 3,733,689$ (19,616)$ Utility taxes4, 4,168,000168,000 3,963,093 (204,907) Business tax receipts130,000 130,000 105,506 (24,494) 8,051,3058,051,305 7,802,288 (249,017) Permits and fees: Permits25,000 25,000 37,869 12,869 Franchise fees1,910,000 1,910,000 1,783,083 (126,917) 1,935,0001,935,000 1,820,952 (114,048) Intergovernmental revenues: Sales tax1,905,000 1,905,000 1,918,487 13,487 State revenue sharing940,000 940,000 961,997 21,997 Other state shared revenue39,000 39,000 32,889 (6,111) Other county shared revenue369,750 369,750 182,431 (187,319) Federal grants- 3,666 3,666 - 3,257,4163,253,750 3,099,470 (157,946) Charges for services: Program activity fees250,200 250,200 181,804 (68,396) Rental and other327,612 331,485 401,932 70,447 581,685577,812 583,736 2,051 Fines and forfeitures275,600 275,600 119,221 (156,379) Investment income85,000 85,000 81,255 (3,745) Miscellaneous42,000 102,091 240,665 138,574 Total revenues14,220,467 14,288,097 13,747,587 (540,510) The accompanying Notes to Financial Statements are an integral part of these statements. 26 Variance with Final Budget - Actual Positive Budgeted AmountsAmounts(Negative) OriginalFinal Expenditures: Current: General government: Executive756,787$ 753,707$ 629,972$ 123,735$ General government574,303 574,438 362,983 211,455 Finance1,757,860 1,757,860 1,611,120 146,740 Information services914,611 914,055 840,225 73,830 Community development1,849,224 1,944,216 1,856,546 87,670 5,944,2765,852,785 5,300,846 643,430 Public Safety: Police6,997,497 7,037,689 6,819,850 217,839 Fire40,000 40,000 36,766 3,234 7,077,6897,037,497 6,856,616 221,073 Physical enviornment: Public works1,081,507 1,092,388 966,280 126,108 Culture and recreation: Parks and recreation1,905,628 1,920,917 1,626,984 293,933 Total expenditures15,877,417 16,035,270 14,750,726 1,284,544 Excess (Deficiency) of Revenues Over Expenditures (1,747,173)(1,656,950) (1,003,139) 744,034 Other Financing Sources (Uses) Transfers in2,193,577 2,226,597 2,201,986 (24,611) Transfers out(1,144,000) (1,197,692) (1,197,692) - Net other financing sources1,049,577 1,028,905 1,004,294 (24,611) Net Change in Fund Balances (718,268)(607,373) 1,155 719,423 Fund Balances - Beginning 8,830,8178,830,817 8,830,817 - Fund Balances - Ending $ 8,112,5498,223,444$ 8,831,972$ 719,423$ 27 This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA ROAD IMPROVEMENTS SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Actual Positive Budgeted Amounts OriginalFinalAmounts(Negative) Revenues: Intergovernmental revenues1,055,000$ -$ -$ -$ Investment income3,800 3,800 11,330 7,530 Total revenues1,058,800 3,800 11,330 7,530 Expenditures: Capital Outlay Physical environment1,050,000 400,000 293,970 106,030 Total expenditures1,050,000 400,000 293,970 106,030 Excess (Deficiency) of Revenues Over Expenditures (396,200)8,800 (282,640) 113,560 Other Financing Sources (Uses) Transfers out(300,000) - - - Total other financing sources (uses)(300,000) - - - Net Change in Fund Balances (396,200)(291,200) (282,640) 113,560 Fund Balances - Beginning 1,496,6441,496,644 1,496,644 - Fund Balances - Ending $ 1,100,4441,205,444$ 1,214,004$ 113,560$ The accompanying Notes to Financial Statements are an integral part of these statements. 28 This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA SOLID WASTE / RECYCLING SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Actual Positive Budgeted AmountsAmounts(Negative) OriginalFinal Revenues: Permits and fees80,000$ 80,000$ 94,502$ 14,502$ Intergovernmental revenues115,000 115,000 342,815 227,815 Charges for services2,375,500 2,375,500 2,380,792 5,292 Investment income17,100 17,100 20,985 3,885 Total revenues2,587,600 2,587,600 2,839,094 251,494 Expenditures: Current: Physical environment2,306,000 2,306,000 2,280,043 25,957 Total expenditures2,306,000 2,306,000 2,280,043 25,957 Excess (Deficiency) of Revenues Over Expenditures 281,600281,600 559,051 277,451 Other Financing Sources (Uses) Transfers out(135,000) (135,000) (132,134) 2,866 Total other financing sources (uses)(135,000) (135,000) (132,134) 2,866 Net Change in Fund Balances 146,600146,600 426,917 280,317 Fund Balances - Beginning 2,304,5382,304,538 2,304,538 - Fund Balances - Ending $ 2,451,1382,451,138$ 2,731,455$ 280,317$ The accompanying Notes to Financial Statements are an integral part of these statements. 29 This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS September 30, 2012 Business-type Activities - Enterprise Funds Water and Sewer Utility Development Stormwater FundServices FundUtility FundTotal Assets Current assets: Cash and cash equivalents620,979$ -$ 107,414$ 728,393$ Investments5,706,705 - 987,372 6,694,077 Receivables, net1,486,453 - 106,213 1,592,666 Inventories25,571 - - 25,571 Prepaid expenses399 - - 399 Restricted cash and cash equivalents516,023 - - 516,023 Total current assets8,356,130 - 1,200,999 9,557,129 Non-current assets: Restricted investments730,823 - - 730,823 Bond issuance costs138,329 - - 138,329 Capital Assets: Land, buildings and equipment56,685,096 94,687 10,763,827 67,543,610 Construction in Progress2,449,816 - 124,445 2,574,261 Less Accumulated depreciation(28,090,432) (94,687) (4,070,841) (32,255,960) Total capital assets (net of accumulated depreciation) -31,044,480 6,817,431 37,861,911 Total non-current assets31,913,632 - 6,817,431 38,731,063 Total assets40,269,762 - 8,018,430 48,288,192 Liabilities Current Liabilities: Accounts payable427,760 10,944 19,371 458,075 Accrued liabilities30,024 3,899 7,973 41,896 Retainage payable107,558--107,558 Compensated absences - current24,0004,4002,70031,100 Customer deposits payable672,856--672,856 Due to other funds-161,287-161,287 Due to other governments-28,685-28,685 Notes payable - current1,255,278- 1,255,278- Accrued interest payable236,798--236,798 Total current liabilities2,754,274209,21530,0442,993,533 Non-current liabilities: Notes payable10,677,727- 10,677,727- Revenue bonds payable5,130,658- 5,130,658- Accreted interest payable3,632,729- 3,632,729- Compensated absences97,17817,69010,878125,746 Other non-current liabilities50,7379,27611,28671,299 Total non-current liabilities19,589,02926,96622,16419,638,159 Total liabilities22,343,303236,18152,20822,631,692 NET ASSETS Invested in capital assets, net of related debt14,119,147 6,817,432-20,936,579 Restricted for debt service14,091--14,091 Restricted for renewal and replacement492,846--492,846 Unrestricted3,300,375(236,181)1,148,7904,212,984 Total net assets$17,926,459$(236,181)$7,966,222$25,656,500 The accompanying Notes to Financial Statements are an integral part of these statements. 30 This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For The Year Ended September 30, 2012 Business-type Activities - Enterprise Funds Water and Sewer DevelopmentStormwater Utility FundServices FundUtility FundTotal Operating Revenues: User charges9,362,773$ 1,099,828$ 1,073,755$ 11,536,356$ Other revenue- - 43,646 43,646 Total operating revenues9,362,773 1,099,828 1,117,401 11,580,002 Operating Expenses: Salaries and benefits1,905,193 309,964 440,881 2,656,038 Materials and supplies827,496 7,094 214,114 1,048,704 Depreciation and amortization1,682,919 298 281,811 1,965,028 Other operating expenses1,100,130 24,383 39,300 1,163,813 Total Operating Expenses5,515,738 341,739 976,106 6,833,583 Operating income (loss)3,847,035 758,089 141,295 4,746,419 Nonoperating Revenue (Expenses): Investment income56,360 - 8,792 65,152 Interest expense(573,052) - - (573,052) Grant revenue1,944 - - 1,944 Accreted interest expense(421,540) - - (421,540) Proceeds from auction and insurance1,454 53 - 1,507 Gain (loss) on disposal of capital assets(1,858) - - (1,858) Total non-operating revenue (expenses)(936,692) 53 8,792 (927,847) Income (loss) before contributions and transfers2,910,343 758,142 150,087 3,818,572 Capital contributions: Connection fees410,931 - - 410,931 Capital contribution1,380,862 - 433,459 1,814,321 Transfers in23,603 - - 23,603 Transfers out(1,598,550) (287,540) (185,800) (2,071,890) Change in net assets3,127,189 470,602 397,746 3,995,537 Total net assets - beginning14,799,270 (706,783) 7,568,476 21,660,963 Total net assets - ending17,926,459$ (236,181)$ 7,966,222$ 25,656,500$ The accompanying Notes to Financial Statements are an integral part of these statements. 31 CITY OF WINTER SPRINGS, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended September 30, 2012 Business-type Activities - Enterprise Funds Water andDevelopment Sewer Utility ServicesStormwater FundFundUtility FundTotal Cash Flows from Operating Activities: Receipts from customers9,624,133$ 1,099,828$ 1,011,188$ 11,735,149$ Payments to suppliers(1,782,278) 1,117 (251,621) (2,032,782) Payments to employees(1,893,924) (310,569) (436,377) (2,640,870) Net cash provided by operating activities5,947,931 790,376 323,190 7,061,497 Cash Flows from Non-Capital Financing Activities: Transfers in23,603 - - 23,603 Transfers out(1,581,743) (287,540) (185,800) (2,055,083) Increase in due to other funds(18,000) (502,889) - (520,889) Grant revenues1,944 - - 1,944 Net cash provided (used) by non-capital financing activities(1,574,196) (790,429) (185,800) (2,550,425) Cash Flows from Capital and Related Financing Activities: Proceeds from sale of capital assets1,454 53 - 1,507 Acquisition of capital assets(2,689,062) - (208,898) (2,897,960) Principal paid on revenue bonds & leases(913,470) - - (913,470) Interest paid on revenue bonds(463,214) - - (463,214) Grant revenue614,836 - 12,783 627,619 Connection fees410,931 - - 410,931 Net cash provided (used) by capital and related financing activities 53(3,038,525) (196,115) (3,234,587) Cash Flows from Investing Activities: Purchase of investments(1,823,108) - (127,641) (1,950,749) Investment income56,360 - 8,792 65,152 Net cash provided (used) by investing activities(1,766,748) - (118,849) (1,885,597) Net Increase (Decrease) in Cash and Cash Equivalents -(431,538) (177,574) (609,112) Cash and Cash Equivalents - Beginning -1,568,540 284,988 1,853,528 $ -1,137,002$ 107,414$ 1,244,416$ Cash and Cash Equivalents - End Classified As: Cash and cash equivalents620,979$ -$ 107,414$ 728,393$ Restricted cash516,023 - - 516,023 Total1,137,002$ -$ 107,414$ 1,244,416$ The accompanying Notes to Financial Statements are an integral part of these statements. 32 Business-type Activities - Enterprise Funds Water andDevelopment Sewer Utility ServicesStormwater FundFundUtility FundTotal Reconciliation of Operating Income(Loss) to Net Cash Provided(Used) by Operating Activities Operating income 3,847,035$ 758,089$ 141,295$ 4,746,419$ Adjustments Not Affecting Cash: Depreciation and amortization1,682,919298281,8111,965,028 Change in Assets and Liabilities: Decrease (increase) in accounts receivable239,022 - (106,213) 132,809 Increase in inventories(5,739) - - (5,739) Increase in prepaid costs(399) - - (399) Increase in accounts payable151,486 10,559 1,793 163,838 Increase in due to other governments- 22,035 - 22,035 Increase in accrued liabilities226 253 1,337 1,816 Increase in customer deposits22,338 - - 22,338 Increase(decrease)in accrued compensated absences (1,572)7 318 (1,247) Increase in OPEB obligation 71411,036 2,849 14,599 Total adjustments417,977 31,989 (99,916) 350,050 $ 790,3765,947,931$ 323,190$ 7,061,497$ Net Cash Provided By Operating Activities Noncash Capital and Financing Activities: $ -764,719$ 420,676$ 1,185,395$ Contributed capital assets Net transfers of capital assets $ -1,307$ -$ 1,307$ 33 This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS September 30, 2012 Defined Benefit Pension Trust Fund Assets: Cash and cash equivalents435,973$ Receivables: Employee contributions13,909 Employer contributions156,090 Total receivables169,999 Investments, at fair value: Common funds - equity18,034,152 Common funds - bonds6,731,591 Other investments1,668,088 Total Investments26,433,831 Total assets27,039,803 Liabilities - Net Assets: Held in trust for pension benefits27,039,803$ The accompanying Notes to Financial Statements are an integral part of these statements. 34 This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For The Year Ended September 30, 2012 Defined Benefit Pension Trust Fund Additions: Contributions: Employer1,913,717$ Plan Members374,894 Total contributions2,288,611 Investment income: Net depreciation in fair value of investments4,025,166 Interest352,187 Net investment income4,377,353 Total additions6,665,964 Deductions: Benefits1,606,752 Administrative expenses309,874 Total deductions1,916,626 Change in net assets4,749,338 Net assets - beginning, as restated22,290,465 Net assets - ending27,039,803$ The accompanying Notes to Financial Statements are an integral part of these statements. 35 This page intentionally left blank. NOTES TO FINANCIAL STATEMENTS CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies: [[375,692,813,744][11][B,I,][Arial]]A. Reporting Entity The[[471,800,1111,853][11][,I,][Arial]]City of Winter Springs, Florida [[1086,800,2300,852][11][,,][Arial]] (the City) is a political subdivision of the state of Florida located in Seminole County, and was established by the Laws of Florida 59-1614. The legislative branch of the City is comprised of a five-member elected Commission and a separately elected mayor, which 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. In evaluating how to define the government, for financial reporting purposes, the City has considered all potential component units. The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization’s governing body, and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects or activities of, or the level of services performed or provided by, the organization. A financial benefit or burden relationship exists if the primary government (a) is entitled to the organizations’ resources; (b) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the organization. In applying the above criteria, management has determined that there are no component units to be included within the reporting entity. [[375,2258,1556,2310][11][B,I,][Arial]]B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. [[375,2528,892,2581][11][,I,][Arial]]Governmental activities [[865,2528,2300,2580][11][,,][Arial]], which normally are supported by taxes and intergovernmental revenues, are reported separately from [[1209,2583,1714,2636][11][,I,][Arial]]business-type activities [[1687,2583,2300,2635][11][,,][Arial]], which rely to a significant extent on fees and charges for support. 36 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies (Continued): [[375,692,1836,744][11][B,I,][Arial]]B. Government-Wide and Fund Financial Statements (Continued) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. [[1520,854,1905,907][11][,I,][Arial]]Direct expenses [[1873,854,2300,906][11][,,][Arial]]are those that are clearly identifiable with a specific function or segment. [[1620,908,2061,961][11][,I,][Arial]]Program revenues [[2037,908,2300,960][11][,,][Arial]]include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as [[1061,1179,1478,1232][11][,I,][Arial]]general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. [[375,1557,2222,1609][11][B,I,][Arial]]C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the [[1826,1665,2300,1718][11][,I,][Arial]]economic resources [[375,1719,834,1772][11][,I,][Arial]]measurement focus [[804,1719,1014,1771][11][,,][Arial]]and the [[983,1719,1620,1772][11][,I,][Arial]]accrual basis of accounting, [[1589,1719,2300,1771][11][,, ][Arial]]as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the [[1701,2097,2300,2150][11][,I,][Arial]]current financial resources [[375,2152,848,2205][11][,I,][Arial]]measurement focus [[832,2152,1056,2204][11][,,][Arial]]and the [[1040,2152,1913,2205][11][,I,][Arial]]modified accrual basis of accounting. [[1876,2152,2300,220 4][11][,,][Arial]] Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be [[493,2260,699,2313][11][,I,][Arial]]available [[687,2260,2299,2312][11][,,][Arial]]when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. 37 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies (Continued): [[375,692,2263,744][11][B,I,][Arial]]C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation [[450,746,742,798][11][B,I,][Arial]](Continued) The government reports the following funds: Major Governmental Funds The G[[659,1070,960,1123][11][,I,][Arial]]eneral Fund [[930,1070,2300,1122][11][,,][Arial]]is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The[[627,1286,1583,1339][11][,I,][Arial]]Road Improvements Special Revenue Fund [[1559,1286,2300,1338][11][,,][Arial]] accounts for collected one-cent sales tax revenues restricted for use for transportation-related improvements. The[[618,1449,1581,1502][11][,I,][Arial]]Solid Waste/Recycling Special Revenue Fund [[1556,1449,2300,1501][11][,,][Arial]] accounts for proceeds from billed solid waste and recycling services performed by contract vendors. Proceeds are committed to pay monthly vendor charges for providing solid waste and recycling services. The[[624,1719,1204,1772][11][,I,][Arial]]TLBD Debt Service Fund [[1173,1719,2300,1771][11][,,][Arial]]was established to account for the accumulation of resources and payment of principal and interest for the 2001 special assessment bond issue which was refinanced in October 2011 with a private placement note payable. The[[628,1989,1525,2042][11][,I,][Arial]]Central Winds G.O. Debt Service Fund [[1499,1989,2300,2041][11][,,][Arial]]was established to account for the accumulation of resources and payment of principal and interest for the 2002 limited general obligation bond issue which was refinanced in May 2012 with a private placement note payable. Non-Major Governmental Fund Types [[525,2367,1073,2420][11][,I,][Arial]]Special Revenue Funds [[1042,2367,2300,2419][11][,,][Arial]]account for the proceeds of specific revenue sources that are legally restricted or committed to expenditure for specified purposes other than debt service or capital projects. [[525,2584,984,2637][11][,I,][Arial]]Debt Service Funds [[950,2584,2300,2636][11][,,][Arial]]account for the accumulation of resources for and the payment of principal and interest on certain general governmental obligations. [[525,2746,1039,2799][11][,I,][Arial]]Capital Projects Funds [[1004,2746,2300,2798][11][,,][Arial]]account for financial resources segregated for the acquisition or construction of major capital facilities. 38 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies (Continued): [[375,692,2263,744][11][B,I,][Arial]]C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation [[450,746,742,798][11][B,I,][Arial]](Continued) Major Proprietary Funds The[[619,962,1249,1015][11][,I,][Arial]]Water and Sewer Utility Fund [[1224,962,2300,1014][11][,,][Arial]] is used to account for the operations of the City’s water and wastewater systems, which are financed in a manner similar to private business enterprises, where the costs, including depreciation, of providing services to the general public on an ongoing basis are financed primarily through user charges. The[[621,1286,1255,1339][11][,I,][Arial]]Development Services Fund [[1222,1286,2300,1338][11][,,][Arial]]is used to account for the operations of the City’s building and other permits department, where the costs, including depreciation, of providing services to the general public are financed primarily through user charges. The[[635,1503,1172,1556][11][,I,][Arial]]Stormwater Utility Fund [[1147,1503,2300,1555][11][,,][Arial]] is used to account for the City’s operation and maintenance of the stormwater system, where the costs, including depreciation, of providing services to the general public are financed primarily through user charges. Fiduciary Fund The Pension Trust Fund accounts for contributions to the defined benefit plan. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the [[2062,2097,2211,2150][11][,I,][Arial]]option [[2187,2097,2300,2149][11][,,][Arial]] of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. As a general rule the effect of interfund activity has been eliminated from the government- wide financial statements. Exceptions to this general rule are other charges between the City’s water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as [[829,2691,1256,2744][11][,I,][Arial]]program revenues [[1224,2691,2300,2743][11][,,][Arial]]include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as [[1890,2799,2300,2852][11][,I,][Arial]]general revenues rather than as program revenues. Likewise, general revenues include all taxes. 39 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies (Continued): [[375,692,2263,744][11][B,I,][Arial]]C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation [[450,746,742,798][11][B,I,][Arial]](Continued) Proprietary funds distinguish [[991,854,1207,907][11][,I,][Arial]]operating [[1203,854,1868,906][11][,,][Arial]]revenues and expenses from [[1839,854,2131,907][11][,I,][Arial]]nonoperating [[2128,854,2288,906][11][,,][Arial]]items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s water, sewer and stormwater utility funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting customers to the system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. [[375,1556,1468,1608][11][B,I,][Arial]]D. Assets, Liabilities, and Net Assets or Equity 1. Deposits and Investments The government’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Investments of the City are reported at fair value. The City’s investments consist of investments authorized per their investment policy adopted in accordance with Section 218.415, Florida Statutes. 40 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies (Continued): [[375,692,1725,744][11][B,I,][Arial]]D. Assets, Liabilities, and Net Assets or Equity (Continued) 2. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Advances between funds, as reported in the fund financial statements, are offset by a non-spendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All receivables are shown net of an allowance for uncollectibles. The County bills and collects property taxes and remits them to the City. City property tax revenues are recognized when levied to the extent that they result in current receivables. All property is reassessed according to its fair value on the lien date, or January 1 of each year. Taxes are levied on October 1 of each year. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January, and 1% in the month of February. The taxes paid in March are without discount. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. On or around May 31 following the tax year, certificates are sold for all delinquent taxes on real property. 3. Inventories and Prepaid Items All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. These are recorded as expenditures when consumed rather than when purchased. 41 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies (Continued): [[375,692,1706,744][11][B,I,][Arial]]D. Assets, Liabilities, and Net Assets or Equity (Continued) 4. Restricted Assets Certain proceeds of the City’s enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because they are maintained in separate bank accounts and their use is limited by applicable bond covenants. Assets so designated are identified as restricted assets on the balance sheet. 5. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government- wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $1,000 or more and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Property, plant, and equipment of the City are depreciated using the straight line method over the following estimated useful lives: AssetsYears Buildings 30 Improvements 20-50 Infrastructure 30-50 Intangible assets 3-10 Equipment 3-10 42 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies (Continued): [[375,692,1706,744][11][B,I,][Arial]]D. Assets, Liabilities, and Net Assets or Equity (Continued) 6. Compensated absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since the government does not have a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. For governmental activities, compensated absences, other post- employment benefits and net pension obligation are generally liquidated by the General Fund. 7. Long-term obligations In the government-wide financial statements, and for proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts (including deep-discount or capital appreciation bonds), as well as issuance costs, are deferred and amortized over the life of the bonds and notes using the effective interest method. Bonds payable and notes payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuances costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 43 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 1 - Summary of Significant Accounting Policies (Continued): [[375,692,1706,744][11][B,I,][Arial]]D. Assets, Liabilities, and Net Assets or Equity (Continued) 8. Fund balance flow assumption Sometimes the city will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted fund balance to have been depleted before using any components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 9. Fund balance policies Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The City itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision making authority. The City Commission is the highest level of decision making authority for the City that can, by adoption of an Ordinance or Resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance or resolution remains in place until a similar action is taken (the adoption of another ordinance or resolution) to remove or revise the limitation. Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as committed. The commission may assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily. 44 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 2 - Adjustment for Correction of an Error: Beginning fund balance in the Defined Benefit Pension Trust Fund has been restated to correct the improper exclusion of an investment. The effect is an increase in net assets of $1,495,718. This adjustment has no effect on the government wide financial statements. Note 3 - Reconciliation of Government-Wide and Fund Financial Statements: [[375,1124,2300,1176][11][B,I,][Arial]]A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet [[450,1178,1575,1230][11][B,I,][Arial]]and the Government-Wide Statement of Net Assets The governmental fund balance sheet includes a reconciliation between [[1873,1286,2300,1339][11][,I,][Arial]]fund balance - total [[450,1340,867,1393][11][,I,][Arial]]governmental funds [[840,1340,977,1392][11][,,][Arial]] and [[939,1340,1681,1393][11][,I,][Arial]]net assets - governmental activities [[1644,1340,2286,1392][11 ][,,][Arial]]as reported in the government- wide statement of net assets. One element of that reconciliation explains that “long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.” The details of this ($19,430,886) difference are as follows: Bonds Payable(8,928,970)$ Add: Issuance premium (to be amortized as interest expense)(41,782) Less: Deferred charge on refunding (to be amortized as interest expense)65,706 Accreted interest payable(3,596,775) Notes payable(5,999,395) Less: Deferred charge on refunding (to be amortized as interest expense)85,752 Accrued interest payable(164,011) Other post employment benefits(218,701) Compensated absences(632,710) Net adjustment to reduce [[988,2296,1832,2349][11][,I,][Arial]]fund balance- total governmental funds [[1803,2296,1891,2348][11][,,][Arial]]to arrive at [[639,2353,1384,2406][11][,I,][Arial]]net assets - governmental activities $ (19,430,886) 45 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 3 - Reconciliation of Government-Wide and Fund Financial Statements (Continued): [[375,692,2209,744][11][B,I,][Arial]]B. Explanation of Certain Differences Between the Governmental Fund Statement of [[450,746,2300,798][11][B,I,][Arial]]Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide [[450,800,952,852][11][B,I,][Arial]]Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between [[1125,962,2300,1015][11][,I,][Arial]]net changes in fund balances - total governmental funds and[[542,1016,1565,1069][11][,I,][Arial]]changes in net assets of governmental activities [[1532,1016,2299,1068][11][,,][Arial]]as reported in the government-wide statement of activities. One element of that reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this $(861,865) difference are as follows: Capital outlay1,818,644$ Depreciation expense(2,680,509) Net adjustment to decrease [[1036,1455,1812,1508][11][,I,][Arial]]net changes in fund balances - total [[461,1512,914,1565][11][,I,][Arial]]governmental funds [[885,1512,1152,1564][11][,,][Arial]]to arrive at [[1115,1512,1929,1565][11][,I,][Arial]]changes in net assets - governmental [[461,1569,664,1622][11][,I,][Arial]]activities $ (861,865) Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.” The details of this $837,656 difference are as follows: Debt issued or incurred: Notes payable(4,504,107)$ Principal repayment5,341,763 Net adjustment to increase [[1021,2317,1797,2370][11][,I,][Arial]]net changes in fund balances - total [[461,2374,914,2427][11][,I,][Arial]]governmental funds [[885,2374,1152,2426][11][,,][Arial]]to arrive at [[1115,2374,1929,2427][11][,I,][Arial]]changes in net assets - governmental [[461,2431,664,2484][11][,I,][Arial]]activities $ 837,656 46 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 3 - Reconciliation of Government-Wide and Fund Financial Statements (Continued): [[375,692,2209,744][11][B,I,][Arial]]B. Explanation of Certain Differences Between the Governmental Fund Statement of [[450,746,2300,798][11][B,I,][Arial]]Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide [[450,800,1223,852][11][B,I,][Arial]]Statement of Activities (Continued) Another element of that reconciliation states that “Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.” The details of this ($456,501) difference are as follows: Compensated absences$ (42,972) Amortization of issuance costs(12,162) Amortization of bond discounts 9,101 Accrued interest payable27,269 Other post employment benefits(53,401) Accreted interest payable(384,336) Net adjustment to decrease [[1036,1522,1799,1575][11][,I,][Arial]]net changes in fund balances- total [[461,1579,914,1632][11][,I,][Arial]]governmental funds [[885,1579,1152,1631][11][,,][Arial]]to arrive at [[1115,1579,1929,1632][11][,I,][Arial]]changes in net assets - governmental [[461,1636,664,1689][11][,I,][Arial]]activities $ (456,501) Note 4 - Stewardship, Compliance, and Accountability: [[375,1889,976,1941][11][B,I,][Arial]]A. Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. All annual appropriations lapse at fiscal year end. The City follows these procedures set forth below in establishing the budgetary data reflected in the financial statements. st 1. On or before July 1 of each year, the City Manager submits a Proposed Budget to st the City Commission for the fiscal year beginning the following October 1. The budget includes proposed revenues, expenditures and a description of capital activities for the ensuing fiscal year. 2. The City Commission then holds informal workshops, wherein the public is invited to attend. th 3. On or before September 30 of each year, two public hearings are convened and the Commission establishes the ad valorem tax millage followed by the adoption of the final budget. 4. The budget may be formally amended by the City Commission at any time. Budgeted amounts presented in the accompanying financial statements have been adjusted for any legally authorized revisions of the annual budgets during the year. 47 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 4 - Stewardship, Compliance, and Accountability (Continued): [[375,692,1236,744][11][B,I,][Arial]]A. Budgetary Information (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 appropriations among programs within one department. The legal level of budgetary control is the departmental level. [[375,1066,1441,1118][11][B,I,][Arial]]B. Appropriations in Excess of Funds Available Appropriations for the Oak Forest Debt Service Fund were in excess of anticipated revenue and prior years’ fund balance. [[375,1336,1390,1388][11][B,I,][Arial]]C. Excess Expenditures Over Appropriations Expenditures of the Special Law Enforcement Trust Fund-Federal Special Revenue Fund exceed appropriations. These over-expenditures were funded by greater than anticipated revenues and available fund balance. [[375,1660,1383,1712][11][B,I,][Arial]]D. Deficit Net Assets and Deficit Fund Equity The Development Services fund had a deficit net asset balance of $236,181 at September 30, 2012. The Oak Forest Debt service fund has a deficit fund balance of $217,020 at September 30, 2012. Note 5 - Deposits and Investments: Deposits At year-end, the carrying amount of the City’s deposits was $3,267,371 and the bank balance was $2,320,050. Petty cash funds of $1,660 are not on deposit with a financial institution, and fiduciary fund cash of $435,973 held by the pension fund is not in the City’s bank. All bank deposits were covered by Federal Depository Insurance or held in banks that are members of the State of Florida’s Collateral Pool as specified under Florida law. Florida Statutes provide for collateral pooling by banks and savings and loans. This limits local government deposits to “authorized depositories”. 48 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 5 - Deposits and Investments (Continued): Investments The City’s investment policies are governed by State Statutes and City ordinances. City ordinance allows investments in any financial institution that is a qualified public depository of the State of Florida as identified by the State Treasurer, in accordance with Chapter 280 of the Florida Statutes. Authorized investments are: 1. Florida Local Government Surplus Funds Trust Fund Investment Pool (SBA LGIP) 2. U.S. Government securities 3. U.S. Government Agency securities 4. Federal Instrumentalities (U.S. Government sponsored agencies) 5. Interest bearing time deposit or savings accounts 6. Repurchase agreements 7. Commercial paper 8. Bankers’ acceptances 9. State and/or local government taxable and/or tax-exempt debt 10. Registered investment companies (money market mutual funds) 11. Intergovernmental investment pool The City’s investment policy limits credit risk by restricting authorized investment to those described above. The policy requires that the investment in federal instrumentalities be guaranteed by the full faith and credit of the U.S. Government sponsored agency and that investments in money market mutual funds have a Standard & Poors (S & P) rating of AAm or AAm-G. Investments in commercial paper and bankers’ acceptances must be rated, at a minimum, “P-1” by Moody’s Investors Services and “A-1” by S & P. Investment in state and/or local government taxable and/or tax-exempt debt must be rated at least “Aa” by Moody’s and “AA” by S & P for long-term debt, or rated at least “MIG-2” by Moody’s and “SP-2” by S & P for short-term debt. Custodial Credit Risk In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The city’s investment policy requires that the bank deposits be secured as provided by Chapter 280, Florida Statutes. This law requires local governments to deposit funds only in financial institutions designated as qualified public depositories by the Chief Financial Officer of the State of Florida, and creates the Public Deposits Trust Fund, a multiple financial institution pool with the ability to assess its member financial institutions for collateral shortfalls if a default or insolvency has occurred. At September 30, 2012, all of the city’s bank deposits were in qualified public depositories. For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2012, none of the investments listed are exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form. 49 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 5 - Deposits and Investments (Continued): Investments (Continued) Concentration of Credit Risk The City’s investment policy requires diversification, and places limits on the percentage of funds that may be invested with an individual issuer and type of investment. Interest Rate Risk The policy limits investment in U.S. Government securities and agencies and federal instrumentalities to a maximum length to maturity of five years. The maximum length to maturity for an investment in any state or local government debt security is three years. Certificates of deposit maximum maturity is one year and commercial paper and bankers’ acceptances are 180 days. The maximum length to maturity for repurchase agreements is 90 days. Additional Investment Information During 2009, the City withdrew all of the funds invested in Pool A of the State Board of Administration (SBA) Local Government Investment Pool and is withdrawing funds from Fund B as they become available. The SBA is not a registrant with the Securities and Exchange Commission (SEC); however, the State of Florida does provide regulatory oversight. The Board has adopted operating procedures consistent with the requirements for a 2a-7 like fund for the Florida Prime Fund. Therefore, the pool account balance can be used as fair value for financial reporting. Fund B is accounted for as a fluctuating NAVPOOL, not a 2a-7 like money market fund. It is important to note that due to the lack of an actively traded market for Fund B securities, their “fair value” is an estimate of current liquidation value that has been determined through a collaborative process among various pricing experts and sources in the marketplace. Investments held by the City at September 30, 2012 are detailed below. Weighted Credit Average InvestmentsFair ValueRatingMaturity Local Government Investment Pool (Fund B)485,508$ Not rated4.08 years Local Government Investment Pool (Fund B)14,091Not rated4.08 years Commercial Paper2,895,905A-1+108.76 days Fidelity Institutional Money Market Government Portfolio910,279 Not rated US Treasury Notes6,424,257 TSY371 days Federal Agency Bond Note14,532,198 AAA431 days Fidelity Institutional Money Market Government Portfolio716,732 Not rated $25,978,970 50 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 5 - Deposits and Investments (Continued): Investments: Pension Funds The City’s Pension Trust Fund (Trust) investment policies are governed by State Statutes and City ordinances. City ordinance allows investments in any financial institution that is a qualified public depository of the State of Florida as identified by the State Treasurer, in accordance with Chapter 280 of the Florida Statutes. Authorized investments are: 1. Interest bearing time deposit or savings accounts 2. U.S. Government securities 3. U.S. Government Agency securities 4. Federal Instrumentalities (U.S. Government sponsored agencies) 5. State of Florida Local Government Surplus Fund (SBA) 6. Commercial paper 7. Bankers’ acceptances 8. State and/or local government taxable and/or tax-exempt debt 9. Intergovernmental investment pool 10. Common and preferred stocks, commingled funds, mutual funds, bonds and structured mortgage or asset backed securities 11. Real Estate and real estate securities 12. Repurchase agreements 13. Foreign securities 14. Registered investment companies (money market mutual funds) The investments held by the City’s Pension Trust Fund at September 30, 2012 are detailed below: Weighted Average InvestmentsMaturity (Years) Fair Value Stocks18,034,152$ N/A Bonds6,731,591 4.95 years Real Estate1,668,088 N/A Total Investments26,433,831 Cash and Cash Equivalents435,973 Total Cash and Investments26,869,804$ 51 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 5 - Deposits and Investments (Continued): Investments: Pension Funds (Continued) Credit Risk The City’s Trust investment policy limits credit risk by restricting authorized investment to those described above. The policy requires that the investments in: federal instrumentalities be guaranteed by the full faith and credit of the U.S. Government sponsored agency; deposit accounts be insured by the Federal Deposit Insurance Corporation and may not exceed maximum insured amount; commercial paper be rated in the highest category by a nationally recognized rating service; Letters of Credit (LOC) backing commercial paper, the long-term debt of the LOC provider be rated A or better by at least two nationally recognized rating services; bankers’ acceptances of the United States Banks or federally chartered domestic office of a foreign bank, which are eligible for purchase by the Federal Reserve System, be rated in the highest category by a nationally recognized rating service; General Obligation and/or Revenue Bonds of state or local government taxable or tax-exempt debt be rated A, for long-term debt, by a nationally recognized rating service or rated “MIG-2” or “SP-2”, for short term debt, by a nationally recognized rating service; intergovernmental investment pools be authorized to the Florida Interlocal Cooperation Act provided in Section 163.01, Florida Statutes; equities be traded on a national exchange; money market mutual funds have a rating of “A1” by Standard & Poor’s (S&P) or “P1” by Moody’s Investor Services (Moody’s); fixed income securities be investment grade as measured by S&P or Moody’s; and any bonds or notes that fall below investment quality must be liquidated immediately. Custodial Credit Risk Custodial risk is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2012, none of the Trust investments listed are exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form. Concentration of Credit Risk The City’s Trust investment policy requires diversification, and places limits on the percentage of funds that may be invested with an individual issuer and type of investment. The policy limits an individual issuer of common or capital stock to no more than 5% of the fund’s assets; the aggregate investment in any one stock issuing company to no more than 5% of the outstanding capital stock of the company; and the value of bonds issued by any single corporation to no more than 3% of the total fund. The policy limits investments in corporate common stock and convertible bonds to no more than 75% of the fund assets at market value; foreign securities to no more than 20% of fund assets at market value; and alternative investments, such as timber and real estate, to no more than 15% of the fund assets at market value. At September 30, 2012, there were no security investments in the Trust that were over their respective limitations. 52 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 5 - Deposits and Investments (Continued): Investments: Pension Funds (Continued) Interest Rate Risk The Pension investment policy allows for investment in commingled funds administered by national or state banks, and mutual funds. Authorized investments criteria with the exception of commingled funds, apply to security level investments. All fixed income investments in the Pension portfolio are commingled funds. The Pension fixed income portfolio may be invested in securities with a maturity up to (30) years, as long as the average duration of the portfolio will not exceed +/- 125% of the duration of the Policy benchmark. There were no security level fixed income investments in the Pension Portfolio. Note 6 - Receivables: Receivables as of year end for the City’s individual major funds and nonmajor funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: Allowance for Accounts Uncollectible FundReceivableAccountsNet Receivable General206,635$ -$ 206,635$ Road Improvements Special Revenue3,834,631 - 3,834,631 Solid Waste/Recycling Special Revenue225,812 - 225,812 TLBD Debt Service1 - 1 Central Winds GO Debt Service6 - 6 Water & Sewer Utility1,535,352 (48,899) 1,486,453 Stormwater Utility Fund106,213 - 106,213 Nonmajor Governmental627 - 627 $ (48,899)5,909,277$ 5,860,378$ There is an amount of $3,834,631 included in accounts receivable above in the Road Improvements Special Revenue Fund that is not considered to be available to liquidate liabilities of the current period. There are also special assessments receivable of $2,374,180 that are not available to liquidate liabilities of the current period. These receivables totaling $6,208,811 are reported as deferred revenue in the governmental funds balance sheet. 53 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 7 - Capital Assets: Capital asset activity for the year ended September 30, 2012 was as follows: Beginning Ending BalanceIncreasesDecreasesBalance Governmental activities: Capital assets, not being depreciated: Land9,959,395$ -$ -$ 9,959,395$ Construction in Progress565,314 1,100,786 (365,846) 1,300,254 Total capital assets, not being depreciated 1,100,78610,524,709 (365,846) 11,259,649 Capital assets, being depreciated: Buildings12,826,046 - - 12,826,046 Improvements12,387,015 3,499 (7,506) 12,383,008 Intangible assets721,816 229,127 (3,667) 947,276 Machinery and equipment6,687,294 519,384 (880,941) 6,325,737 Infrastructure57,234,605365,846 - 57,600,451 Total capital assets, being depreciated 1,117,85689,856,776 (892,114) 90,082,518 Less accumulated depreciation for: Buildings(4,256,769) (424,670) - (4,681,439) Improvements(4,240,547) (422,760) 912 (4,662,395) Intangible assets(667,305) (46,776) 3,667 (710,414) Machinery and equipment(5,300,917) (582,709) 862,325 (5,021,301) Infrastructure(26,375,115) (1,220,939) (27,596,054) Total accumulated depreciation (2,697,854)(40,840,653) 866,904 (42,671,603) Total capital assets, being depreciated, net (1,579,998)49,016,123 (25,210) 47,410,915 Governmental activities capital assets, net $ (479,212)59,540,832$ (391,056)$ 58,670,564$ Increases in accumulated depreciation for governmental activities includes accumulated depreciation on assets transferred from business-type activities, therefore total increases is not the same as depreciation expense discussed below. This difference is $17,345. 54 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 7 - Capital Assets (Continued): Beginning Ending BalanceIncreasesDecreasesBalance Business-type activities: Capital assets, not being depreciated: Land7,170,177$ -$ -$ 7,170,177$ Construction in Progress3,261,409 2,651,384 (3,338,532) 2,574,261 Total capital assets, not being depreciated 2,651,38410,431,586 (3,338,532) 9,744,438 Capital assets, being depreciated: Buildings759,515 - - 759,515 Improvements51,182,942 4,715,743 - 55,898,685 Intangible assets110,410 - - 110,410 Machinery and equipment3,584,417 101,930 (81,524) 3,604,823 Total capital assets, being depreciated 4,817,67355,637,284 (81,524) 60,373,433 Less accumulated depreciation for: Buildings(520,127) (25,118) - (545,245) Improvements(26,847,324) (1,735,361) - (28,582,685) Intangible assets(95,727) (4,762) - (100,489) Machinery and equipment(2,892,049) (198,350) 62,858 (3,027,541) Total accumulated depreciation (1,963,591)(30,355,227) 62,858 (32,255,960) Total capital assets, being depreciated, net 2,854,08225,282,057 (18,666) 28,117,473 Business-type activities capital assets, net $ 5,505,46635,713,643$ (3,357,198)$ 37,861,911$ Increases in accumulated depreciation for business-type activities include accumulated depreciation on assets transferred from governmental activities. This difference is $21,158. 55 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 7 - Capital Assets (Continued): Depreciation expense was charged to functions/programs as follows: Governmental activities: General government117,958$ Public safety470,617 Physical environment1,713,080 Culture and recreation378,854 Total depreciation expense - governmental activities2,680,509$ Business-type activities: Water and sewer1,660,324$ Development services298 Stormwater281,811 Total depreciation expense - business-type activities1,942,433$ Note 8- Long-Term Debt: Revenue Bonds The City issues bonds where the City pledges revenue derived from the acquired or constructed assets to pay debt service. Revenue bonds have been issued for both governmental and business-type activities. The 1999 Improvement Refunding Bonds are secured by Electric Franchise fees and Public Service tax revenue. The total principal and interest remaining to be paid on this series is $14,025,000. For the fiscal year, there was no principal and interest paid on this series and total pledged revenue was $5,711,307. The 2001 Special Assessment Bonds are secured by a first lien and pledge of assessments levied on the property within the assessed area as well as the first $160,000 of half-cent sales tax received by the City each year. These bonds were refunded in the current year. For the fiscal year, principal and interest paid on this series was $1,902,588 and total pledged revenue was $144,955. The 2003 Improvement Refunding Bonds are secured by Electric Franchise fees and Public Service tax revenue. The total principal and interest remaining to be paid on this series is $6,118,059. For the fiscal year, principal and interest paid on this series was $881,098 and total pledged revenue was $5,711,307. The 2000 Water and Sewer Refunding bonds are secured by net revenue from the water and sewer system. The total principal and interest remaining to be paid on this series is $20,071,250. For the fiscal year, principal and interest paid on this series was $103,124 and total pledged net revenue was $4,503,452. 56 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 8 - Long-Term Debt (Continued): Revenue Bonds (Continued) The original amount of revenue bonds issued in prior years, as well as revenue bonds outstanding at year end, are as follows: Interest Balance Rates and Original September 30, DatesMaturityAmount2012 Governmental Activities Improvement Refunding Revenue Bonds- Series 1999 10/1/2020 (excludes $3,596,775 of accreted 3.25 - 5.25%to interest on capital appreciation bonds)(4/1 & 10/1)10/1/20297,998,970$ 3,498,970$ 10/1/2004 Improvement Refunding2.0 - 3.7%to Revenue Bonds- Series 2003 (4/1 & 10/1)10/1/20188,870,000$ 5,430,000 Total$8,928,970 Business-Type Activities Water and Sewer Refunding Revenue Bonds- Series 2000 10/1/2022 (excludes $3,632,729 of accreted 4.5 - 5.5%to interest on capital appreciation bonds)(4/1 & 10/1)10/1/20306,969,191$ 5,669,191$ Total$5,669,191 Annual debt service requirements to maturity for revenue bonds are as follows: Year EndingGovernmental ActivitiesBusiness-Type Activities September 30,PrincipalInterestPrincipalInterest 2013700,000$ 174,447$ -$ 103,125$ 2014725,000 150,385 - 103,125 2015750,000 125,698 - 103,125 2016775,000 100,910 - 103,125 2017800,000 74,522 - 103,125 2018-20222,863,442 3,165,708 397,498 2,810,490 2023-20271,568,569 4,850,119 2,313,075 7,717,500 2028-2031746,959 2,572,300 2,958,618 3,358,444 $ 11,214,0898,928,970$ 5,669,191$ 14,402,059$ 57 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 8 - Long-Term Debt (Continued): Current Refunding of Bonds Payable The City issued Special Assessment Revenue Refunding Note, Series 2011, to refund the 2001 Special Assessment Bonds. The refunding was undertaken to reduce total future debt service payments. This transaction resulted in an economic gain of $252,584 and a reduction of $336,749 in future debt service payments. General Obligation Bonds During 2003, the City issued limited general obligation bonds for the acquisition of property to expand Central Winds Park. These bonds are payable from and secured by a pledge of the faith, credit and taxing power of the City, provided that the levy of ad valorem taxes by the City in each year for the payment of debt service on the Series 2003 Bonds shall not exceed one quarter (1/4) of one mil on all of the taxable property in the City. These bonds were refunded in the current year. For the fiscal year, principal and interest paid on this series was $2,909,208, including payment of $2,770,000 to refunding agent, and total pledged revenue was $167,640. Current Refunding of General Obligation Bonds Payable The City issued Limited General Obligation Refunding Note, Series 2012, to refund the Limited General Obligation Bond, Series 2003. The refunding was undertaken to reduce total future debt service payments. This transaction resulted in an economic gain of $283,176 and a reduction of $392,079 in future debt service payments. Notes Payable The City issued a Special Assessment Revenue Note Series 2006, in the amount of $430,000 to provide financing for the Tuscawilla Lighting and Beautification Project, Phase II. The Special Assessment Revenue Note Series 2006 is secured by a first lien and pledge of assessments levied on the property within the assessed area. The total principal and interest remaining to be paid on this series is $158,620. For the fiscal year, principal and interest paid on this series was $44,976 and total pledged revenue was $40,381. The 2011 Improvement Refunding Revenue Note is secured by Electric Franchise fees and Public Service tax revenue. The total principal and interest remaining to be paid on this series is $1,474,741. For the fiscal year, principal and interest paid on this series was $44,423 and total pledged revenue was $5,711,307. The 2011 Special Assessment Revenue Refunding Note is secured by a first lien and pledge of assessments levied on the property within the assessed area. The total principal and interest remaining to be paid on this series is $2,344,241. For the fiscal year, no principal was paid and interest was paid on this series was $25,016 and total pledged revenue was $144,955. 58 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 8 - Long-Term Debt (Continued): Notes Payable (Continued) The 2012 Limited General Obligation Refunding Note is secured a pledge of the faith, credit and taxing power of the City, provided that the levy of ad valorem taxes by the City in each year for the payment of debt service on the Note shall not exceed one quarter (1/4) of one mil on all of the taxable property in the City. The total principal and interest remaining to be paid on this series is $3,847,147. For the fiscal year, no principal was paid on this series and interest paid was $11,942 and total pledged revenue was $167,640. The 2011A Water and Sewer Refunding Note is secured by net revenue from the water and sewer system. The total principal and interest remaining to be paid on this series is $8,672,887. For the fiscal year, principal and interest paid on this series was $1,099,181 and total pledged net revenue was $4,503,452. The 2011B Water and Sewer Refunding Note is secured by net revenue from the water and sewer system. The total principal and interest remaining to be paid on this series is $881,469. For the fiscal year, principal and interest paid on this series was $99,238 and total pledged net revenue was $4,503,452. The 2011C Water and Sewer Refunding Note is secured by net revenue from the water and sewer system. The total principal and interest remaining to be paid on this series is $4,198,207. For the fiscal year, principal and interest paid on this series was $99,219 and total pledged net revenue was $4,503,452. In April 2012, the City executed Clean Water State Revolving Fund Loan agreement WW590600 for the Lake Jessup reclaimed water augmentation facility. The agreement provides for total funding of $2,831,985. The loan period is for 20 years with an interest rate of 2.77 percent. As of September 30, 2012, the City has not drawn any loan funds. Subsequent to year end, in November 2012, the City drew $1,433,552 on the loan. The note is secured by gross revenues from the water and sewer utility net of operation and maintenance costs. 59 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 8 - Long-Term Debt (Continued): Notes Payable (Continued) The City has notes payable for both governmental and business-type activities. Outstanding notes payable at year end are as follows: Governmental Activities SpecialAssessmentRevenueNote,Series2006-Principalpayable annuallybeginningJuly1,2007andinterestpayablesemi-annually onJanuary1andJuly1.MaturityisJuly1,2021andinterestis 4.10%.Principalpaymentsof$37,915weremadeinfiscalyear 2012. $ 141,890 ImprovementRefundingRevenueNote,Series2011-payablein annualprincipalinstallmentsstarting10/1/11through10/1/18and interest paid semi-annually at 2.36%1,353,398 SpecialAssessmentRefundingRevenueNote,Series2011-payable inannualprincipalinstallmentsstarting10/1/12through10/1/29and interest paid semi-annually at 3.25%1,765,000 LimitedGeneralObligtaionRefundingNote,Series2012-payablein annualprincipalinstallmentsstarting7/1/13through7/1/31and interest paid semi-annually at 3.65%2,739,107 $ 5,999,395 Business-Type Activities WaterandSewerSystemRevenueRefundingNote,Series2011A- payableinannualprincipalinstallmentsstarting4/1/12through4/1/20 and interest paid semi-annually at 3.28%7,629,676$ WaterandSewerSystemRevenueRefundingNote,Series2011B- payableinannualprincipalinstallmentsstarting10/1/11through 10/1/20 and interest paid semi-annually at 2.65%792,377 WaterandSewerSystemRevenueRefundingNote,Series2011C- payableinannualprincipalinstallmentsstarting10/1/12through 10/1/21 and interest paid semi-annually at 2.66%3,730,050 $ 12,152,103 60 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 8 - Long-Term Debt (Continued): Notes Payable (Continued) Annual debt service requirements to maturity for notes payable are as follows: Year EndingGovernmental ActivitiesBusiness-Type Activities September 30,PrincipalInterestPrincipalInterest 2013306,633$ 192,646$ 1,255,278$ 345,767$ 2014371,000 182,461 1,296,196 306,297 2015400,942 170,865 1,334,768 265,618 2016419,859 158,611 1,375,953 223,721 2017437,964 145,842 1,424,794 180,433 2018-20221,596,387 555,630 5,465,114 278,624 2023-20271,346,597 331,967 - - 2028-20311,120,013 87,332 - - $ 1,825,3545,999,395$ 12,152,103$ 1,600,460$ Changes in Long-Term Liabilities Long-term liability activity for the year ended September 30, 2012 was as follows: Beginning EndingDue Within BalanceAdditionsReductionsBalanceOne Year Governmental activities: Bonds payable- Revenue bonds9,613,970$ -$ (685,000)$ 8,928,970$ 700,000$ Special assessment debt with government commitment1,825,000 - (1,825,000) - - Limited general obligation bonds2,770,000 - (2,770,000) - - Less deferred amounts: Issuance discounts(15,465) - 15,465 - - Issuance premiums48,746 - (6,964) 41,782 - On refunding(76,657) - 10,951 (65,706) - Total bonds payable14,165,594 - (5,260,548) 8,905,046 700,000 Accreted interest payable3,212,439 384,336 - 3,596,775 - Notes payable- Capital improvement notes1,557,051 1,765,000 (61,763) 3,260,288 206,047 Limited general obligation note- 2,739,107 - 2,739,107 100,586 Less deferred amounts: On refunding- (90,314) 4,562 (85,752) - Total notes payable1,557,051 4,413,793 (57,201) 5,913,643 306,633 Other post employment benefits165,30053,401 - 218,701 - Compensated absences589,738 632,710 (589,738) 632,710 127,000 Governmental activity long- term liabilities $ 5,484,24019,690,122$ (5,907,487)$ 19,266,875$ 1,133,633$ 61 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 8 - Long-Term Debt (Continued): Changes in Long-Term Liabilities (Continued) Beginning EndingDue Within BalanceAdditionsReductionsBalanceOne Year Business-type activities: Bonds payable- Revenue bonds5,669,191$ -$ -$ 5,669,191$ -$ Less deferred amounts: Issuance discounts(19,818) - 840 (18,978) - On refunding(577,890) - 58,335 (519,555) - Total bonds payable5,071,483 - 59,175 5,130,658 - Accreted interest payable3,211,189 421,540- 3,632,729 - Notes payable- Revenue notes13,065,573 - (913,470) 12,152,103 1,255,278 Less deferred amounts: On refunding(245,681) - 26,583 (219,098) - Total notes payable12,819,892 - (886,887) 11,933,005 1,255,278 Other post employment benefits56,700 14,348- 71,048 - Compensated absences158,093156,846 (158,093) 156,846 31,100 Governmental activity long- term liabilities $ 592,73421,317,357$ (985,805)$ 20,924,286$ 1,286,378$ Note 9 - Interfund Receivables, Payables and Transfers: The composition of interfund advances as of September 30, 2012 is as follows: Receivable FundPayable FundAmount GeneralDevelopment Services161,287$ GeneralOther Governmental Funds229,870 $ 391,157 In prior years, the Development Services fund had been operating at a deficit which was being funded by an advance from the General Fund. In the current year, the Development Services fund has excess revenue of $470,602 and reduced the payable to the General Fund by $502,889. The advance to other governmental funds represents Resolution 2010-36 adopted June 2010 formally establishing the interfund loan (original amount $318,464) between the City’s General Fund and the Oak Forest Debt Service Fund. The terms of the note are 2.7510% paid quarterly through June 2017. 62 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 9 - Interfund Receivables, Payables and Transfers (continued): Interfund transfers for the year ended September 30, 2012 are summarized below: Transfers In Central Other Water and Governmental Winds GO Governmental Sewer Utility Capital Assets Transfers OutGeneral FundDebt ServiceFundsFund(Not a Fund)Total General Fund $ 55,500-$ $1,142,192$-$ 1,197,692-$ TLBD Debt Service 500 - -- -500 Solid Waste/Recycling Special Revenue Fund 132,134 - -- 132,134- Other Governmental Funds 123,309 411,000- 14,563 548,872- Water and Sewer Utility Fund 1,481,743 100,000- -16,8071,598,550 Development Services Fund 284,500 - 3,040- 287,540- Stormwater Utility Fund 179,800 - 6,000- 185,800- $ 2,201,986$ 55,500$ 1,653,192$23,603$16,807$3,951,088 Interfund transfers for the year ended September 30, 2012 are detailed below: Recipient FundAmountPurpose TransferfromGeneralFundtopayDebtService 1999 Debt Service Fund$194,300expensesontheImprovementRefundingRevenue Bonds, Series 1999. TransferfromGeneralFundtopayDebtService 2003 Debt Service Fund894,200expensesontheImprovementRefundingRevenue Bonds, Series 2003. TransferfromGeneralFundtopayDebtService Central Winds GO Debt Service Fund 55,500expensesontheGeneralObligationNotesforthe acquisition and expansion of Central Winds Park. TransferfromWaterandSewerUtilityFundforUtility Billingdivisionbudget,fairshareportionofGeneral General Fund 1,481,743 Fundexpenses,suchashumanresources,purchasing, and finance. TransferfromDevelopmentServicesFundforindirect costs,administration,fireprevention,Community General Fund 284,500Development(crossovercosts),InformationServices specialprojects,Kivaprojectandrecordsmanagement project expenses. TransferfromTLBDPhaseIMaintenanceSpecial General Fund 74,931RevenueFundforCityClerk,BeautificationCoordinator and insurance expenses. TransferfromOakForestMaintenanceSpecial General Fund 14,359RevenueFundforCityClerk,BeautificationCoordinator and insurance expenses. 63 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 9 - Interfund Receivables, Payables and Transfers (continued): Recipient FundAmountPurpose TransferfromSolidWaste/RecyclingSpecialRevenue General Fund 132,134 Fund for administration, franchise fees. TransferfromParksImpactFundtocovercostsrelated General Fund 33,019 to an improvement at Trotwood Park. TransferfromStormwaterUtilityFundforadministration General Fund 179,800 and special projects. TransferfromOakForestDebtServicefundfor General Fund 500 administration fees. TransferfromTLBDDebtServiceFundfor General Fund 500 administration fees. TransferfromTLBDPhaseIIDebtServiceFundfor General Fund 500 administration fees. TransferfromGeneralFundtocontributetoprojectsto enhancecustomerserviceatCityHallincludinganew Excellence in Customer Service 53,692phonesoftwareandequipment,upgradestotheERP softwareandimprovementstophysicalspaceinthe City Hall lobby. TransferfromPublicBuildingImpactFeeFundwhich wasclosedinFY12.Theremainingfundbalancewas Excellence in Customer Service 400,546tobeusedtoprovideenhancementstocustomer servicethroughtheExcellenceinCustomerService capital projects. TransferfromCityHallExpansionCapitalProjectFund areinpartaresultfromtherepealofthePublic BuildingsImpactFeeFund.Theremainingfund Excellence in Customer Service 10,454 balanceintheCityHallExpansionCapitalProjects FundweretransferredtotheExcellenceinCustomer Service Fund. TransferfromWaterandSewerFundtocontributeto projectstoenhancecustomerserviceatCityHall Excellence in Customer Service 100,000includinganewphonesoftwareandequipment, upgradestotheERPsoftwareandimprovementsto physical space in the City Hall lobby. TransferfromDevelopmentServicestocoveran Water and Sewer Utility Fund 3,040allocationofservicesforthephoneoperationand customer service call handling. TransferfromArborFundtocoveranallocationof Water and Sewer Utility Fund 14,563 salary/benefits for the City Arborist. TransferfromStormwaterUtilityFundforadministration Water and Sewer Utility Fund 6,000 fees. $3,934,281 64 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 10 - Defined Benefit Pension Plan: Plan Description The City maintains a single-employer defined benefit pension plan that provides retirement benefits to City employees. The pension plan is maintained as a Pension Trust Fund and is included with the fund financial statements. This pension plan does not issue a stand-alone financial report. General employees hired on or after October 1, 2011 are no longer eligible for the defined benefit pension plan, but are eligible for the City’s defined contribution plan. Employees hired as sworn police officers or hired as forensic professionals on or after October 1, 2011 will continue to participate in the defined benefit plan. In October 2008, the City consolidated fire services with Seminole County, and firefighters were given the option to either remain in the City’s pension plan or enroll in the County’s pension plan. As a result, 27 firefighters elected to remain in the City’s pension plan of which 17 remain although they are no longer employees of the City. The Board of Trustees of the plan are appointed by the City Commission to make advisory recommendations regarding the plan’s investment and portfolio strategies. Any recommendations are then taken back to the Commission for final approval. Summary of Significant Accounting Principles The Plan’s financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. The City’s contributions are recognized when due and formal commitment to provide the contributions has been made. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. All Plan investments are reported at fair value. Securities traded on a national exchange are valued at the last reported sales price on the government’s balance sheet date. Securities without an established market are reported at estimated fair value. Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City Commission. Effective October 1, 2011, the Plan has been amended to require Plan members to contribute 5% of their salary to the Plan, which amounted to $374,894, for the year ended September 30, 2012. The City is required to contribute at an actuarially determined rate; the rate from the most recent actuarial valuation as of October 1, 2010 for the year ended September 30, 2012 is 28.1% of covered payroll. As a result of the amendment to increase the Plan member contribution, the City’s contribution was reduced to 24.1% of payroll for fiscal year 2012. The City/County’s contribution for the year ended September 30, 2012 was $1,913,717, which is 25.4% of covered payroll. Administration costs and fees attributable to the plan are paid out of the plan and amounted to $309,874 in 2012. 65 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 10 - Defined Benefit Pension Plan (Continued): Membership in the Defined Benefit Plan consisted of the following as of the most recent valuation date, October 1, 2010: Retirees and beneficiaries receiving benefits51 Terminated plan members entitled to but not receiving benefits98 Active plan members: Vested186 Non-vested24 359 Annual Pension Cost and Net Pension Obligation- The annual pension cost, net pension obligation and required contribution for September 30, 2012 were determined as part of the actuarial valuation of the plan dated October 1, 2010, and the actuarial impact statement dated March 2, 2012. The annual pension cost and net pension obligation based on the most recent valuation is: Annual Required Contribution1,965,643$ Interest on Net Pension Obligation (NPO)(450) Adjustment to Annual Required Contribution504 Annual Pension Cost1,965,697 City Contributions Made(1,913,717) Increase/(Decrease) in NPO51,980 Net Pension Asset, beginning of year(17,878) Net Pension obligation, end of year$ 34,102 [[450,2269,1147,2321][11][B,I,][Arial]]Three Year Trend Information - Fiscal Annual Percentage of Net Pension Year Pension Actual APC Obligation EndingCost (APC)ContributionContributed(Asset) 9/30/20102,331,410$ 2,311,058$ 99.1%14,679$ 9/30/20112,627,713 2,660,270 101.2%(17,878) 9/30/20121,965,697 1,913,717 97.4%34,102 As of October 1, 2010, the most recent actuarial valuation date, the Plan was 59.2% funded. The actuarial accrued liability for benefits was $40,331,000 and the actuarial value of assets was $23,887,000, resulting in an unfunded actuarial liability (UAAL) of $16,444,000. The covered payroll (annual payroll of active employees covered by the plan) was $10,304,000, and the ratio of the UAAL to the covered payroll was 159.6%. 66 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 10 - Defined Benefit Pension Plan (Continued): The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of the plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. The schedule of employer contributions is also presented and shows the extent to which the city has funded the actuarially determined annual required contribution (ARC) over time. The amount legally required as of September 30, 2012 to be reserved for the Plan is $27,039,803. Actuarial Methods and Assumptions - The following is a summary of the actuarial methods and significant actuarial assumptions used in the latest actuarial valuation dated October 1, 2010. The plan was amended October 1, 2004 to increase the benefit formula percentage for service prior to October 1, 2000 of 2.0% by .25% increments each year beginning October 1, 2005 through the plan year beginning October 1, 2008 to 3.0%. : [[469,1664,776,1716][11][B,I,][Arial]]Assumptions Investment Earnings8% compounded annually Salary Increases/Inflation3.0% -7.5%, includes expected inflation at 3.0% RP-2000CombinedMortalityTablewithseparateratesfor Mortality Tablemalesandfemalesandfullygenerationalmortality improvements projected to each future decrement date Normal FormLife annuity with payments for life of participant Retirement AgeAge 65 UsedwithdrawalassumptionsusedinJuly1,2010Florida Withdrawal Rates Retirement System (FRS) Actuarial Valuation. [[469,2374,696,2426][11][B,I,][Arial]]Actuarial [[670,2374,920,2426][11][B,I,][Arial]]Valuation: FrequencyAnnual Actuarial Cost MethodEntry Age Normal Amortization MethodLevel Percentage of Projected Payroll Amortization Period30 Years Closed Asset Valuation Method5 year smoothed market 67 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 11 - Defined Contribution Plan: In March 2012 the City established the Winter Springs Defined Contribution (General Plan) as a defined contribution plan covering all full time employees of the City hired after October 1, 2011, not eligible to participate in the Defined Benefit Pension Plan. This plan is authorized and may be amended by the City Commission. The City makes employer contributions of 5%. Employees are eligible to participate in the General Plan after 6 months of employment. Vesting is 0% for the first 3 years, 60% at the end of year 3, 80% at the end of year 4, 100% at the end of year 5. Benefits are available upon termination subject to IRS regulations, regardless of age, based on vested years of service. Normal retirement age has been designated by the employer as age 65. For the fiscal year ending September 30, 2012, payroll for the employees covered by this plan was $119,358. Employer contributions required and made were $8,243. As of September 30, 2012, participation in the plan consisted of 9 active members. During the year, the General Plan held no securities issued by the employer. Note 12 - Other Post-Employment Benefits: In accordance with Florida Statutes Section 112.0801, the City makes continued group health insurance through the city’s current provider available to retirees and eligible dependents provided certain service requirements and normal age retirement requirements have been met. This plan is a single employer plan. This benefit has no cost to the City, other than the implicit cost of including retirees in the group calculation. All premiums are paid by the retiree. The City has eleven retirees currently receiving benefits. The City has chosen pay-as-you-go funding, but is recording the liability in the government wide financial statements. This plan does not issue stand-alone financial statements. The most recent actuarial report for the City’s Retiree Continuation Insurance plan was prepared as of October 1, 2011. At that point in time, the unfunded actuarial accrued liability (UAAL) for benefits was $754,000 and funded ratio was 0%. The covered payroll was $7,441,000 and the ratio of the UAAL to covered payroll was 10.1 percent. The annual required contribution and Net OPEB Obligation for the fiscal year ended September 30, 2012 is as follows: Annual required contribution$137,000 Interest on net OPEB Obligation9,000 Adjustment to annual required contribution(19,000) Annual OPEB Cost127,000 Employer contributions(58,000) Interest on employer contributions(1,000) Increase in Net OPEB Obligation68,000 Net OPEB Obligation (beginning of year)222,000 Net OPEB Obligation (end of year)$290,000 68 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 12 - Other Post-Employment Benefits (Continued): [[375,692,1095,744][11][B,I,][Arial]]Three Year Trend Information - Annual Required Percentage of Fiscal Year Contribution ARC Net OPEB Ending(ARC)ContributedObligation 9/30/201098,000$ 16.0%155,000$ 9/30/2011133,000 44.0%222,000 9/30/2012137,000 43.0%290,000 Summary of Actuarial Methods & Assumptions - Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. [[375,2431,937,2483][11][B,I,][Arial]]Actuarial Cost Method - [[919,2431,2300,2483][11][,,][Arial]]The projected unit credit cost method was used to determine all liabilities, with the liability for each active employee assumed to accrue over his working lifetime based on elapsed time from his date of hire until retirement. [[375,2647,919,2699][11][B,I,][Arial]]Amortization Method - [[886,2647,2299,2699][11][,,][Arial]]The level-dollar payment with a 15 year open period amortization method was used. Decrements - [[375,2863,631,2915][11][B,I,][Arial]]Mortality - [[596,2863,2300,2915][11][,,][Arial]] Sex-distinct mortality rates set forth in the RP-2000 mortality table to annuitants and non-annuitants, projected to 2012 by Scale AA, as published by the IRS for purposes of IRC section 430. 69 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 12 - Other Post-Employment Benefits (Continued): Summary of Actuarial Methods & Assumptions (Continued) [[375,800,644,852][11][B,I,][Arial]]Disability - [[610,800,2300,852][11][,,][Arial]] Sex-distinct disability rates set forth in the Wyatt 1985 Disability Study; Class 4 rates were used for police officers, Class 1 rates were used for all other employees. [[375,962,1365,1014][11][B,I,][Arial]]Permanent Withdrawal from Active Status - [[1330,962,2300,1014][11][,,][Arial]] Sex-distinct withdrawal rates set forth in the Scale 155 table. [[375,1125,680,1177][11][B,I,][Arial]]Retirement - [[645,1125,2300,1177][11][,,][Arial]] Retirement was assumed to occur as at age 55 for police officers and at age 60 for all other employees [[375,1287,1242,1339][11][B,I,][Arial]]Investment Return (Discount Rate) - [[1213,1287,2300,1339][11][,,][Arial]]4.0% per annum (includes inflation at 2.75% per annum) [[375,1449,1108,1501][11][B,I,][Arial]]Health care Costs Trend Rates - [[1074,1449,2300,1501][11][,,][Arial]] The cost of covered medical services has been assumed to increase in accordance with the following rates, compounded annually: YearIncreaseYear IncreaseYear Increase 20127.50%20156.00%2017 and later 20137.00%20165.50%5.00% 20146.50% [[375,1924,1379,1976][11][B,I,][Arial]]Implied Subsidy (Not Eligible for Medicare) - [[1345,1924,2300,1976][11][,,][Arial]]The implied subsidy for a 60-year old retiree and his spouse for the period October 1, 2011 through September 30, 2012 is assumed to be $3,300 per year and $4,500 per year, respectively. [[375,2140,1243,2192][11][B,I,][Arial]]Implied Subsidy (Dental Insurance) - [[1208,2140,2300,2192][11][,,][Arial]]There is no implied subsidy for dental insurance since it is assumed that the dental insurance costs for covered individuals do not increase with age. [[375,2356,952,2408][11][B,I,][Arial]]Age-Related Morbidity - [[917,2356,2300,2408][11][,,][Arial]]The cost of covered medical services has been assumed to increase with age at the rate of 3.5% per annum. [[375,2518,917,2570][11][B,I,][Arial]]Retiree contributions - [[881,2518,2300,2570][11][,,][Arial]]Retirees electing post-employment healthcare coverage have been assumed to make monthly contributions equal to the premium charged to the active employees and retiree contributions are assumed to increase in accordance with the healthcare cost trend assumption. [[375,2789,911,2841][11][B,I,][Arial]]Medical Plan Choice - [[879,2789,2300,2841][11][,,][Arial]]Retirees have been assumed to elect coverage under the “United Healthcare Medical Plan 6” plan. [[375,2951,1040,3003][11][B,I,][Arial]]Future Participation Rates - [[1008,2951,2300,3003][11][,,][Arial]]25% of eligible employees are assumed to elect healthcare coverage for themselves until age 65 upon retirement or disability; of the retirees election healthcare coverage, 10% are assumed to elect coverage for their spouses until age 65. 70 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 12 - Other Post-Employment Benefits (Continued): Summary of Actuarial Methods & Assumptions (Continued) - [[375,800,879,852][11][B,I,][Arial]]COBRA Assumption [[866,800,2299,852][11][,,][Arial]] Future healthcare coverage provided solely pursuant to COBRA was not included in the OPEB valuation; because the COBRA premium is determined periodically based on plan experience, we assumed that the COBRA premium to be paid by the participant fully covers the cost of providing healthcare coverage during the relevant period. [[375,1124,883,1176][11][B,I,][Arial]]Summary of Benefits [[375,1178,1378,1230][11][B,I,][Arial]]Other Post-Employment Benefits (OPEBs) - [[1343,1178,2300,1230][11][,,][Arial]]The City of Winter Springs provides optional post-employment healthcare and dental insurance coverage to eligible individuals. [[375,1341,872,1393][11][B,I,][Arial]]Eligible Individuals - [[836,1341,2300,1393][11][,,][Arial]]Eligible individuals include all regular employees of the City of Winter Springs who retire from active service and are eligible for retirement or disability benefits under the defined benefit pension plan that is sponsored by the City. Under certain conditions, eligible individuals for healthcare coverage also include spouses and dependent children. [[375,1665,1063,1717][11][B,I,][Arial]]Choice of Healthcare Plans - [[1030,1665,2300,1717][11][,,][Arial]]Eligible individuals may choose healthcare coverage under the “United Healthcare Medical Plan 4” plan, or the “United Healthcare Medical Plan 6” plan. [[375,1827,2002,1879][11][B,I,][Arial]]Required Monthly Premium for Post-Employment Healthcare Coverage - [[1966,1827,2300,1879][11][,,][Arial]]Retirees must pay a monthly premium as determined by the insurance carrier. The premium varies depending on the plan selected and whether the retiree elects single, single plus spouse, single plus children or family coverage. Note 13 - Deferred Compensation Plan: All employees of the City may voluntarily elect to participate in one of two available deferred compensation plans created in accordance with Internal Revenue Code Section 457. The plans are administered by Nationwide Retirement Solutions and ICMA Retirement Corporation. The plans permit participants 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. Because the Plan Assets are held in trust for the exclusive benefit of plan participants and their beneficiaries, the Plan is not accounted for in the City’s fund financials. 71 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 14 - Risk Management: The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; job-related illnesses or injuries to employees; and natural disasters. Risk of loss from above is transferred by the City to various commercial insurers through the purchase of insurance. There has been no significant reduction in insurance coverage from the previous year. There have been no settlements in excess of insurance coverage in any of the prior three fiscal years. Note 15- Commitments and Contingencies: Grants - Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government and the State of Florida. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. Litigation - The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City’s counsel the resolution of these matters will not have a material adverse effect on the financial condition of the City. Commitments Under Construction Contracts - At September 30, 2012, the City had entered into construction contracts in the amount of $513,643. Transportation Impact Fee Credits - The City has entered into a number of agreements with developers under which the developer donates transportation infrastructure improvements or rights of way to the City and receives credit for future transportation impact fee payments. As of September 30, 2012, credit balances for future impact fees total approximately $588,000. 72 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2012 Note 16 - Fund Balance Minimum Fund Balance Policy - In accordance with Resolution 2002-36, the City designates an amount equal to 20 percent of the total operating expenses of the General fund to be maintained as a required minimum unreserved fund balance. The purpose of the policy is to provide capacity to (1) provide sufficient cash flow for daily financial needs, (2) secure and maintain investment grade (i.e. A or above) bond ratings, (3) offset significant economic downturns or revenue shortfalls, and (4) provide funds for unforeseen expenditures related to emergencies. By a super majority vote of the Commission, supplemental appropriation from unassigned General Fund fund balance may be authorized by the Commission for a General Fund purpose reducing the unassigned General Fund fund balance below the 20% minimum provided that the assigned General Fund fund balance is restored to the minimum in the following year budget. At September 30, 2012, the City’s governmental fund balances were as follows: Central Road Winds GO Other Total Improvements Solid Waste/ TLBD Debt DebtGovernmental Governmental Fund BalancesGeneral FundFundRecyclingServiceServiceFundsFunds Non-spendable Inventory/prepaid258,630$ -$ -$ -$ -$ -$ 258,630$ Advances391,157391,157 Spendable Restricted for: Physical environment- 1,214,004 1,508,812 2,722,816 Public safety- - - - - 1,351,923 1,351,923 Culture and recreation- - - - - 141,079 141,079 Debt service- - - 188,352 50,549 15,342 254,243 Committed to: Solid Waste- - 1,383,575 - - - 1,383,575 Arbor- - - - - 303,746 303,746 Assigned to: Storm reserve- - 698,672 - - - 698,672 Emergency Disaster Relief -- 649,208 - - - 649,208 Debt service- - - - - 961,588 961,588 Capital projects- - - - - 3,199,477 3,199,477 Subsequent year expenditures -343,327 - - - 343,327 Unassigned7,838,858 - - - - (217,020) 7,621,838 Total Fund Balance8,831,972$ 1,214,004$ 2,731,455$ 188,352$ 50,549$ 7,264,947$ 20,281,279$ Note 17 - Subsequent Events: The City has evaluated subsequent events through the date of the independent auditors’ report, the date the financial statements were available to be issued. 73 This page intentionally left blank. REQUIRED SUPPLEMENTARY INFORMATION CITY OF WINTER SPRINGS, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION September 30, 2012 Defined Benefit Pension Trust Fund Schedule of Funding Progress (expressed in Thousands) Actuarial UAAL as a Actuarial Accrued % of Actuarial Value of Liability (AAL) Unfunded Funded Covered Covered ValuationAssetsEntry AgeAAL (UAAL)RatioPayrollPayroll Date(a)(b)(b-a)(a/b)( c)(b-a) / c 10/1/20059,716$ 13,178$ 3,462$ 74%9,659$ 35.8% 10/1/200611,951 16,043 4,092 74.5 10,489 39.0 10/1/200715,527 20,114 4,587 77.2 11,190 41.0 10/1/200818,747 32,414 13,667 57.8 10,768 126.9 10/1/200920,789 37,651 16,862 55.2 10,753 156.8 10/1/201023,887 40,331 16,444 59.2 10,304 159.6 Schedule of Employer Contributions Annual Fiscal Required Percentage of YearContributionActualARC Ending(ARC)ContributionContributed 9/30/20071,807,722$ 1,843,147$ 102.0% 9/30/20082,005,100 2,009,085 100.2 9/30/20091,781,651 1,781,197 100.0 9/30/20102,311,058 2,311,058 100.0 9/30/20112,627,659 2,660,270 101.2 9/30/20121,965,643 1,913,717 97.4 74 CITY OF WINTER SPRINGS, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION September 30, 2012 Retiree Continuation Insurance Plan Schedule of Funding Progress Actuarial UAAL as a Actuarial Accrued % of Actuarial Value of Liability (AAL) UnfundedFunded Covered Covered ValuationAssetsEntry AgeAAL (UAAL)RatioPayrollPayroll Date(a)(b)(b-a)(a/b)( c)(b-a) / c 7/1/2009**-$ 505,000$ 505,000$ 0.0%9,230,000$ 5.5% 10/1/2011- 754,000 754,000 0.0%7,441,000 10.1% ** initial valuation date Schedule of Contributions from Employers and Other Contributing Entities Percentage of Annual RequiredARC Net OPEB Fiscal Year EndingContribution (ARC)ContributedObligation 9/30/200993,000$ 17.0%77,000$ 9/30/201098,000 16.0%155,000 9/30/2011133,000 44.0%222,000 9/30/2012137,000 43.0%290,000 75 CITY OF WINTER SPRINGS, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information September 30, 2012 Note 1 The following actuarial assumption/method changes have been implemented with the October 1, 2011 valuation for the Retiree Continuation Insurance Plan: 1. The mortality basis has been changed from the RP-2000 Mortality Table projected to 2007 by Scale AA to the RP-2000 Mortality Table projected to 2013 by Scale AA, both as published by the IRS for purposes of IRC section 430. 2. The healthcare cost trend rates have been changed from 8.87% for the 2011/12 fiscal year graded down to 5.00% for the 2018/19 fiscal year and thereafter to 8.00% for the 2011/12 fiscal year graded down to 5.00% for the 2017/18 fiscal year and thereafter. 3. The implied subsidy for spouses at age 60 has been decreased from $400 per month to $375 per month. 4. The percentage of eligible employees who are assumed to elect healthcare coverage upon retirement or disability has been increased from 10% to 25% 5. The percentage of future retirees who are assumed to elect healthcare coverage for their spouse has been decreased from 80% for males and 50% for females to 10% for all future retirees. Note 2 The following actuarial assumption/method changes have been implemented with the March 2, 2012 actuarial impact statement for the Defined benefit pension plan: 1. Employees working 30 or more hours per week were eligible to join the Plan on the first day of the month following completion of six months of service. 2. Effective October 10, 2011 compensation shall exclude commissions, bonuses, overtime pay in excess of 150 hours per Plan year and payments for accrued leave in excess of the dollar amount of an employee’s accrued leave balance on July 1, 2011. 3. Final average compensation is the average earnings during the best 5 consecutive years out of the last 10 years preceding termination or retirement, but not less than the 3 highest consecutive compensation periods during employment with the City as of September 30, 2011. 4. Benefit for Firefighters, Police Officers and Forensic Professional, 3% times final average compensation multiplied by Accrual Service up to a maximum of 30 years. Benefit for General Employees, 3% time accrual service earned through September 30, 2011 times final average compensation plus 2.5% times accrual service earned after September 30, 2011 times final average compensation up to a maximum of 30 years accrual service. 76 CITY OF WINTER SPRINGS, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information September 30, 2012 Note 2 (Continued) 5. Early retirement eligibility is the earlier of attainment of age 55 and completion of 15 years of service or completion of 25 years of service actuarially reduced if under the age of 55. 6. Participant contributions increased to 5% of compensation for all employees. 7. Participants are 100% vested in required participant contributions. Participant contributions made after October 1, 2000 are include in the deferred vested benefit payable at normal or early retirement date.Upon termination of service prior to normal or early retirement date a participant shall be entitled to a benefit payable at normal or early retirement date calculated as for normal retirement. Based on pay and service at termination multiplied by a percentage- 0% for less than 7 years of service, 100% for 7 or more years of service. 77 This page intentionally left blank. COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES This page intentionally left blank. MAJOR GOVERNMENTAL FUNDS Debt Service Fund TLBD Debt Service Fund -This fund was established to account for the accumulation of principal and interest for the 2001 special assessment bond issue which was refinanced in October 2011 with a private placement note payable. Central Winds G.O. Debt - This fund is used to account for accumulation of resources Service Fund and payment of principal and interest for the 2002 limited general obligation bond which was refinanced in May 2012 with private placement note payable. This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA TLBD DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Actual Positive Budgeted Amounts OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments165,698$ 164,298$ 60,000$ (104,298)$ Investment income2,100 2,100 86,534 84,434 Miscellaneous- - 19,399 19,399 Total revenues167,798 166,398 165,933 (465) Expenditures: Current: Physical environment4,645 32,145 31,961 184 Debt Service: Principal60,000 1,825,000 1,825,000 - Interest and other charges92,731 103,036 102,605 431 Total expenditures157,376 1,960,181 1,959,566 615 Excess (Deficiency) of Revenues Over Expenditures (1,793,783)10,422 (1,793,633) 150 Other Financing Sources (Uses) Notes payable- 1,765,000 1,765,000 - Transfers out(500) (500) (500) - Total other financing sources and uses(500) 1,764,500 1,764,500 - Net Change in Fund Balances (29,283)9,922 (29,133) 150 Fund Balances - Beginning 217,485217,485 217,485 - Fund Balances - Ending $ 188,202227,407$ 188,352$ 150$ 78 CITY OF WINTER SPRINGS, FLORIDA CENTRAL WINDS GO DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Variance with Final Budget - Actual Positive Budgeted AmountsAmounts(Negative) OriginalFinal Revenues: Taxes: Property taxes168,500$ 167,600$ 167,640$ 40$ Investment income400 400 745 345 Total revenues168,900 168,000 168,385 385 Expenditures: Current: Culture and recreation- 31,500 31,501 (1) Debt Service: Principal85,000 2,770,000 2,770,000 - Interest and fiscal charges139,731 151,581 151,330 251 Total expenditures224,731 2,953,081 2,952,831 250 Excess (Deficiency) of Revenues Over Expenditures (2,785,081)(55,831) (2,784,446) 635 Other Financing Sources (Uses) Notes payable- 2,739,107 2,739,107 - Transfers in55,500 55,500 55,500 - Total other financing sources (uses)55,500 2,794,607 2,794,607 - Net Change in Fund Balances 9,526(331) 10,161 635 Fund Balances - Beginning 40,38840,388 40,388 - Fund Balances - Ending $ 49,91440,057$ 50,549$ 635$ 79 NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Police Education Fund - This fund is used to account for the $2.00 additional assessment on each traffic citation that is restricted for criminal justice education and training in accordance with Chapter 938.15, Florida Statutes. Special Law Enforcement - This fund was established to receive revenues from local Trust Fund - Local sources derived from confiscated property obtained during the enforcement of illegal operations. Proceeds are restricted for law enforcement purposes. Such purposes may include drug education programs such as G.R.E.A.T (Gang Resistance Education and Training). Transportation - Revenues in this fund are derived from Local Option Improvement Fund Gasoline Tax distribution. Proceeds are restricted for road, right of way, and drainage maintenance and equipment necessary to build or maintain roads, right of ways, and drainage. Transportation Impact Fee - This fund is used to account for collected impact fees on Fund new development which are restricted for use in funding road construction directly related to new growth. Police Impact Fee Fund - This fund is used to account for collected impact fees on new development which are restricted for use in funding capital investment needed to maintain the level of police service directly related to new growth. Fire Impact Fee Fund - This fund is used to account for collected impact fees on new development to defray the cost of capital investment needed to maintain the level of fire service due to future growth. Parks Impact Fee Fund - This fund is used to account for collected impact fees on new development which are restricted for use in funding capital investment needed to develop and improve the parks directly related to new growth. Public Buildings Impact Fee - This fund is used to account for collected impact fees on Fund new development which are restricted for use in funding capital investment needed to maintain public buildings directly related to new growth. Medical Transport Services - This fund is used to receive revenues generated from fees Fundcharged for paramedic services. The proceeds from this fund are used to pay for the incremental costs related to providing these services. NONMAJOR GOVERNMENTAL FUNDS - Continued Special Revenue Funds - Continued Arbor Fund - This fund is used to account for arbor permit revenues committed to new plantings and maintenance of trees and shrubs within the City. TLBD Maintenance Fund - This fund is used to account for collected special assessments restricted for maintenance related to the Tuscawilla Lighting and Beautification District for Phases I and II of project. Phase II was accounted for in a separate fund prior to Fiscal Year 2008. Oak Forest Maintenance - This fund is used to account for collected special Fund assessments restricted for maintenance related to the Oak Forest subdivision wall. Special Law Enforcement - This fund was established to receive revenues from Trust Fund - Federal federal sources derived from confiscated property obtained during the enforcement of illegal operations. Proceeds are restricted for law enforcement purposes. Such purposes may include drug education programs such as G.R.E.A.T (Gang Resistance Education and Training). NONMAJOR GOVERNMENTAL FUNDS - Continued Debt Service Funds 1999 Debt Service Fund - This fund is used to account for the accumulation of resources and payment of principal and interest for the 1999 bond issue and Improvement Refunding Note Series 2011, which partially refunded the 1999 bond issue. 2003 Debt Service Fund - This fund is used to account for the accumulation of resources and payment of principal and interest for the 2003 bond issue. Oak Forest Debt Service - This fund is used to account for the accumulation of Fund resources and payment of principal and interest to the General Fund for the 2010 interfund loan which paid off the Capital Improvement Revenue Note, Series 2004A. TLBD Phase II Debt - This fund is used to account for the accumulation of Service Fund resources and payment of principal and interest for the TLBD Phase II Improvements. This page intentionally left blank. NONMAJOR GOVERNMENTAL FUNDS - Continued Capital Projects Funds 1999 Construction Capital - This fund was established for the acquisition and Projects Fund construction of City - owned Capital Improvements. Revolving Rehab Capital - This fund was established to fund capital improvements Projects Fund and economic development within the City. City Hall Expansion Capital - This fund was established to account for expansion of City Projects Fund Hall. This fund was closed in 2012 and the residual equity was transferred to Excellence in Customer Service. Public Facilities Fund - This fund was established to account for construction of additional public facilities. Excellence in Customer - This fund was established to account for the acquisition of Service software and equipment to improve the level of customer service performance. CITY OF WINTER SPRINGS, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS September 30, 2012 Special Revenue Special Law PoliceEnforcementTransportation EducationTrust Fund- ImprovementTransportation FundLocalFundImpact Fee Fund Assets: Cash and cash equivalents2,386$ 2,896$ 59,602$ 60,367$ Investments21,936 26,625 547,876 554,909 Receivables, net625 - - - Special assessments receivable- - - - Restricted assets: Cash and cash equivalents- 800 - - Total assets24,947$ 30,321$ 607,478$ 615,276$ Liabilities and Fund Balances: Accounts payable-$ 1,668$ 15,477$ 35,023$ Due to other funds- - - - Deferred revenue- - - - Total liabilities- 1,668 15,477 35,023 Fund balances: Restricted24,947 28,653 592,001 580,253 Committed- - - Assigned- - - - Unassigned- - - - Total fund balances24,947 28,653 592,001 580,253 Total liabilities and fund balances24,947$ 30,321$ 607,478$ 615,276$ 80 Special Revenue TLBD Police Impact Fire Impact Parks Impact Maintenance Fee FundFee FundFee FundArbor FundFund $ 112,6099,709$ 15,961$ 30,102$ 28,917$ 1,035,12489,246 146,718 276,709 265,808 -- - - 2 -- - - - -- - - - $ 1,147,73398,955$ 162,679$ 306,811$ 294,727$ $ 12,6006,401$ 21,600$ 3,065$ 10,375$ -- - - - -- - - - 12,6006,401 21,600 3,065 10,375 1,135,13392,554 141,079 - 284,352 -- - 303,746 - -- - - - -- - - - 1,135,13392,554 141,079 303,746 284,352 $ 1,147,73398,955$$162,679$306,811$294,727 (Continued) 81 CITY OF WINTER SPRINGS, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS September 30, 2012 Special Revenue Special Law Oak Forest Enforcement MaintenanceTrust Fund - Total Special FundFederalRevenue Assets: Cash and cash equivalents5,294$ 6,938$ 334,781$ Investments48,662 63,780 3,077,393 Receivables, net- - 627 Special assessments receivable- - - Restricted assets: Cash and cash equivalents- - 800 Total assets53,956$ 70,718$ 3,413,601$ Liabilities and Fund Balances: Accounts payable1,750$ 82$ 108,041$ Due to other funds- - - Deferred revenue- - - Total liabilities1,750 82 108,041 Fund balances: Restricted52,206 70,636 3,001,814 Committed- - 303,746 Assigned- - - Unassigned- - - Total fund balances52,206 70,636 3,305,560 Total liabilities and fund balances53,956$ 70,718$ 3,413,601$ 82 Debt Service Oak Forest TLBD Phase 2003 Debt 1999 Debt Debt Service II Debt Service FundService FundFundService FundTotal $ 161,701793,595$ 1,284$ 1,505$ 958,085$ -6,292 11,800 13,837 31,929 -- - - - -- 458,938 210,242 669,180 -- - - - $ 161,701799,887$ 472,022$ 225,584$ 1,659,194$ $ --$ 234$ -$ 234$ -- 229,870 - 229,870 -- 458,938 210,242 669,180 -- 689,042 210,242 899,284 -- - 15,342 15,342 -- - - - 161,701799,887 - - 961,588 -- (217,020) - (217,020) 161,701799,887 (217,020) 15,342 759,910 $ 799,887$161,701$ 472,022$225,584$1,659,194 (Continued) 83 CITY OF WINTER SPRINGS, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS September 30, 2012 Capital Projects 1999PublicExcellence in ConstructionRevolvingFacilitiesCustomer FundRehab FundFundService Assets: Cash and cash equivalents89,806$ 101,574$ 94,746$ 27,790$ Investments825,519 933,692 870,925 255,448 Receivables, net- - - - Special assessments receivable- - - - Restricted assets: Cash and cash equivalents- - - - Total assets915,325$ 1,035,266$ 965,671 283,238$ Liabilities and Fund Balances: Accounts payable-$ 23$ -$ -$ Due to other funds- - - - Deferred revenue- - - - Total liabilities- 23 - - Fund balances: Restricted- - - - Committed- - - - Assigned915,325 1,035,243 965,671 283,238 Unassigned- - - - Total fund balances915,325 1,035,243 965,671 283,238 Total liabilities and fund balances915,325$ 1,035,266$ 965,671$ 283,238$ 84 Capital Projects Nonmajor Governmental TotalFunds $ 1,606,782313,916$ 5,994,9062,885,584 627- 669,180- 800- $ 8,272,2953,199,500$ $ 108,29823$ 229,870- 669,180- 1,007,34823 3,017,156- 303,746- 4,161,0653,199,477 (217,020)- 7,264,9473,199,477 $ 8,272,2953,199,500$ 85 CITY OF WINTER SPRINGS, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended September 30, 2012 Special Revenue PoliceSpecial Law Transportation EducationEnforcementImprovementTransportation FundTrust Fund- LocalFundImpact Fee Fund Revenues: Taxes: Permits and fees $ --$ -$ -$ Intergovernmental revenues -- 505,728 - Charges for services -- 13,995 - Fines and forfeitures 19,5789,130 - - Impact fees/assessments -- - 46,355 Investment income 195200 3,873 4,691 Miscellaneous -849 1,675 - Total revenues10,179 19,773 525,271 51,046 Expenditures: Current: General government -- - - Public safety 8,60018,627 - - Physical environment -- 109,823 1,084 Debt Service: Principal -- - - Interest and fiscal charges -- - - Issuance costs -- - - Capital Outlay: General government -- - - Public safety -- - - Physical environment -- 373,219 - Culture and recreation -- - - Total expenditures 8,60018,627 483,042 1,084 Excess (Deficiency) of Revenues Over Expenditures 11,173(8,448) 42,229 49,962 Other Financing Sources (Uses): Transfers in -- - - Transfers out -- - - Total other financing sources(uses) -- - - Net Change in Fund Balances 11,173(8,448) 42,229 49,962 Fund Balances - Beginning 17,48033,395 549,772 530,291 Fund Balances - Ending $ 28,65324,947$ 592,001$ 580,253$ 86 Special Revenue Police Impact Fee Fire Impact Fee Parks Impact Fee Public Buildings FundFundFundImpact Fee FundArbor Fund $ --$ -$ -$ 15,172$ -- - - - -- - - - -- - - 1,750 98,24848,338 148,800 - - 8,609806 742 990 2,441 -- - - 500 106,85749,144 149,542 990 19,863 -- - - - -- - - - -- - - 11,949 -- - - - -- - - - -- - - - -- - - - -35,012 - - - -- - - - -- - - - -35,012 - - 11,949 106,85714,132 149,542 990 7,914 -- - - - -- (33,019) (400,546) (14,563) -- (33,019) (400,546) (14,563) 106,85714,132 116,523 (399,556) (6,649) 1,028,27678,422 24,556 399,556 310,395 $ 1,135,13392,554$ 141,079$ -$ 303,746$ (Continued) 87 CITY OF WINTER SPRINGS, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended September 30, 2012 Special Revenue Special Law TLBDOak Forest Enforcement MaintenanceMaintenanceTrust Fund - FundFundFederalTotal Revenues: Taxes: Permits and fees $ --$ -$ 15,172$ Intergovernmental revenues -- - 505,728 Charges for services -- - 13,995 Fines and forfeitures -- 60,934 91,392 Impact fees/assessments 52,263491,150 - 885,154 Investment income 5143,375 462 26,898 Miscellaneous -1,403 - 4,427 Total revenues495,928 52,777 61,396 1,542,766 Expenditures: Current: General government -- - - Public safety -- 22,608 49,835 Physical environment 32,191435,972 - 591,019 Debt Service: - Principal -- - - Interest and fiscal charges -- - - Issuance costs -- - - Capital Outlay: General government -- - - Public safety -- 10,956 45,968 Physical environment -- - 373,219 Culture and recreation -- - - Total expenditures 32,191435,972 33,564 1,060,041 Excess (Deficiency) of Revenues Over Expenditures 20,58659,956 27,832 482,725 Other Financing Sources (Uses): Transfers in -- - - Transfers out (14,359)(74,931) - (537,418) Total other financing sources(uses) (14,359)(74,931) - (537,418) Net Change in Fund Balances 6,227(14,975) 27,832 (54,693) Fund Balances - Beginning 45,979299,327 42,804 3,360,253 Fund Balances - Ending $ 52,206284,352$ 70,636$ 3,305,560$ 88 Debt Service TLBD Phase II 2003 Debt Service 1999 Debt Service Oak Forest Debt Debt Service FundFundService FundFundTotal $ --$ -$ -$ -$ -- - - - -- - - - -- - - - -- 16,826 37,915 54,741 8324,444 20,368 2,704 28,348 -- 21,029 - 21,029 8324,444 58,223 40,619 104,118 10,100- - 915 11,015 -- - - - -- 3,909 - 3,909 - 23,848685,000 - 37,915 746,763 20,575196,098 7,096 7,061 230,830 -- - - - -- - - - -- - - - -- - - - -- - - - 54,523881,098 11,005 45,891 992,517 (53,691)(876,654) 47,218 (5,272) (888,399) 194,300894,200 - - 1,088,500 -- (500) (500) (1,000) 194,300894,200 (500) (500) 1,087,500 140,60917,546 46,718 (5,772) 199,101 21,092782,341 (263,738) 21,114 560,809 $ 161,701799,887$ (217,020)$ 15,342$ 759,910$ (Continued) 89 CITY OF WINTER SPRINGS, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended September 30, 2012 Capital Projects 1999 ConstructionRevolvingCity Hall Public Facilities FundRehab FundExpansion FundFund Revenues: Taxes: Permits and fees $ --$ -$ -$ Intergovernmental revenues -- - - Charges for services -- - - Fines and forfeitures -- - - Impact fees/assessments -- - - Investment income 8,2457,301 - 7,683 Miscellaneous -- - - Total revenues 8,2457,301 - 7,683 Expenditures: Current: General government 1,729- - - Public safety -- - - Physical environment -- - - Debt Service: Principal -- - - Interest and fiscal charges -- - - Issuance costs -- - - Capital Outlay: General government -- - - Public safety -- - - Physical environment -- - - Culture and recreation -2,400 - - Total expenditures2,400 1,729 - - Excess (Deficiency) of Revenues Over Expenditures 6,5164,901 - 7,683 Other Financing Sources (Uses): Transfers in -- - - Transfers out -- (10,454) - Total other financing sources(uses) -- (10,454) - Net Change in Fund Balances 6,5164,901 (10,454) 7,683 Fund Balances - Beginning 1,028,727910,424 10,454 957,988 Fund Balances - Ending $ 1,035,243915,325$ -$ 965,671$ 90 Capital Projects Nonmajor Excellence in Governmental Customer ServiceTotalFunds $ --$ 15,172$ -- 505,728 -- 13,995 -- 91,392 -- 939,895 24,4121,183 79,658 7,1187,118 32,574 31,5308,301 1,678,414 3,5001,771 14,515 -- 49,835 -- 594,928 -- 746,763 -- 230,830 -- - 287,984287,984 287,984 -- 45,968 -- 373,219 2,400- 2,400 293,884289,755 2,346,442 (262,354)(281,454) (668,028) 564,692564,692 1,653,192 (10,454)- (548,872) 554,238564,692 1,104,320 291,884283,238 436,292 2,907,593- 6,828,655 $ 3,199,477283,238$ 7,264,947$ 91 CITY OF WINTER SPRINGS, FLORIDA POLICE EDUCATION FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Fines and forfeitures12,000$ 9,200$ 9,130$ (70)$ Investment income250 250 200 (50) Miscellaneous- 849 849 - Total revenues12,250 10,299 10,179 (120) Expenditures: Current: Public Safety18,000 18,849 18,627 222 Total expenditures18,000 18,849 18,627 222 Excess (Deficiency) of Revenues Over Expenditures (8,550)(5,750) (8,448) 102 Net change in fund balances (8,550)(5,750) (8,448) 102 Fund balances - beginning 33,39533,395 33,395 - Fund balances - ending $ 24,84527,645$ 24,947$ 102$ 92 CITY OF WINTER SPRINGS, FLORIDA SPECIAL LAW ENFORCEMENT TRUST FUND - LOCAL SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Fines and forfeitures-$ 19,700$ 19,578$ (122)$ Investment income75 75 195 120 Total revenues75 19,775 19,773 (2) Expenditures: Current: Public Safety7,800 9,300 8,600 700 Total expenditures7,800 9,300 8,600 700 Excess (Deficiency) of Revenues Over Expenditures 10,475(7,725) 11,173 698 Net change in fund balances 10,475(7,725) 11,173 698 Fund balances - beginning 17,48017,480 17,480 - Fund balances - ending $ 27,9559,755$ 28,653$ 698$ 93 CITY OF WINTER SPRINGS, FLORIDA TRANSPORTATION IMPROVEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Intergovernmental revenues517,000$ 517,000$ 505,728$ (11,272)$ Charges for services13,582 13,582 13,995 413 Investment income4,900 4,900 3,873 (1,027) Miscellaneous- - 1,675 1,675 Total revenues535,482 535,482 525,271 (10,211) Expenditures: Current: Physical environment175,700 175,800 109,823 65,977 Capital Outlay Physical environment400,300 400,200 373,219 26,981 Total expenditures576,000 576,000 483,042 92,958 Excess (Deficiency) of Revenues Over Expenditures (40,518)(40,518) 42,229 82,747 Net change in fund balances (40,518)(40,518) 42,229 82,747 Fund balances - beginning 549,772549,772 549,772 - Fund balances - ending $ 509,254509,254$ 592,001$ 82,747$ 94 CITY OF WINTER SPRINGS, FLORIDA TRANSPORTATION IMPACT FEE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments-$ 65,425$ 46,355$ (19,070)$ Investment income5,000 5,000 4,691 (309) Total revenues5,000 70,425 51,046 (19,379) Expenditures: Current: Physical environment2,000 4,500 1,084 3,416 Capital Outlay Physical environment25,000 22,500 - 22,500 Total expenditures27,000 27,000 1,084 25,916 Excess (Deficiency) of Revenues Over Expenditures 43,425(22,000) 49,962 6,537 Net change in fund balances 43,425(22,000) 49,962 6,537 Fund balances - beginning 530,291530,291 530,291 - Fund balances - ending $ 573,716508,291$ 580,253$ 6,537$ 95 CITY OF WINTER SPRINGS, FLORIDA POLICE IMPACT FEE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments26,500$ 54,500$ 48,338$ (6,162)$ Investment income750 750 806 56 Total revenues27,250 55,250 49,144 (6,106) Expenditures: Capital Outlay Public Safety- 35,100 35,012 88 Total expenditures- 35,100 35,012 88 Excess (Deficiency) of Revenues Over Expenditures 20,15027,250 14,132 (6,018) Net change in fund balances 20,15027,250 14,132 (6,018) Fund balances - beginning 78,42278,422 78,422 - Fund balances - ending $ 98,572105,672$ 92,554$ (6,018)$ 96 CITY OF WINTER SPRINGS, FLORIDA FIRE IMPACT FEE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments48,000$ 48,000$ 98,248$ 50,248$ Investment income10,000 10,000 8,609 (1,391) Total revenues58,000 58,000 106,857 48,857 Excess (Deficiency) of Revenues Over Expenditures 58,00058,000 106,857 48,857 Net change in fund balances 58,00058,000 106,857 48,857 Fund balances - beginning 1,028,2761,028,276 1,028,276 - Fund balances - ending $ 1,086,2761,086,276$ 1,135,133$ 48,857$ 97 CITY OF WINTER SPRINGS, FLORIDA PARKS IMPACT FEE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments88,500$ 88,500$ 148,800$ 60,300$ Investment income150 150 742 592 Total revenues88,650 88,650 149,542 60,892 Excess (Deficiency) of Revenues Over Expenditures 88,65088,650 149,542 60,892 Other Financing Sources (Uses) Transfers out- (33,020) (33,019) 1 Total other financing sources and uses- (33,020) (33,019) 1 Net change in fund balances 55,63088,650 116,523 60,893 Fund balances - beginning 24,55624,556 24,556 - Fund balances - ending $ 80,186113,206$ 141,079$ 60,893$ 98 CITY OF WINTER SPRINGS, FLORIDA PUBLIC BUILDINGS IMPACT FEE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Investment income-$ 990$ 990$ -$ Total revenues- 990 990 - Excess (Deficiency) of Revenues Over Expenditures 990- 990 - Other Financing Sources (Uses) Transfers out(393,730) (400,546) (400,546) - Total other financing sources and uses(393,730) (400,546) (400,546) - Net change in fund balances (399,556)(393,730) (399,556) - Fund balances - beginning 399,556399,556 399,556 - Fund balances - ending $ -5,826$ -$ -$ 99 CITY OF WINTER SPRINGS, FLORIDA ARBOR FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Permits and fees18,500$ 18,500$ 15,172$ (3,328)$ Fines and forfeitures1,000 1,000 1,750 750 Investment income2,800 2,800 2,441 (359) Miscellaneous- - 500 500 Total revenues22,300 22,300 19,863 (2,437) Expenditures: Current: Physical environment26,550 26,550 11,949 14,601 Total expenditures26,550 26,550 11,949 14,601 Excess (Deficiency) of Revenues Over Expenditures (4,250)(4,250) 7,914 12,164 Other Financing Sources (Uses) Transfers out(14,563) (14,563) (14,563) - Total other financing sources and uses(14,563) (14,563) (14,563) - Net change in fund balances (18,813)(18,813) (6,649) 12,164 Fund balances - beginning 310,395310,395 310,395 - Fund balances - ending $ 291,582291,582$ 303,746$ 12,164$ 100 CITY OF WINTER SPRINGS, FLORIDA TLBD MAINTENANCE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments495,000$ 495,000$ 491,150$ (3,850)$ Investment income2,300 2,300 3,375 1,075 Miscellaneous- 1,404 1,403 (1) Total revenues497,300 498,704 495,928 (2,776) Expenditures: Current: Physical environment480,630 482,034 435,972 46,062 Total expenditures480,630 482,034 435,972 46,062 Excess (Deficiency) of Revenues Over Expenditures 16,67016,670 59,956 43,286 Other Financing Sources (Uses) Transfers out(74,931) (74,931) (74,931) - Total other financing sources and uses(74,931) (74,931) (74,931) - Net change in fund balances (58,261)(58,261) (14,975) 43,286 Fund balances - beginning 299,327299,327 299,327 - Fund balances - ending $ 241,066241,066$ 284,352$ 43,286$ 101 CITY OF WINTER SPRINGS, FLORIDA OAK FOREST MAINTENANCE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments52,940$ 52,940$ 52,263$ (677)$ Investment income375 375 514 139 Total revenues53,315 53,315 52,777 (538) Expenditures: Current: Physical environment39,935 39,935 32,191 7,744 Total expenditures39,935 39,935 32,191 7,744 Excess (Deficiency) of Revenues Over Expenditures 13,38013,380 20,586 7,206 Other Financing Sources (Uses) Transfers out(14,359) (14,359) (14,359) - Total other financing sources and uses(14,359) (14,359) (14,359) - Net change in fund balances (979)(979) 6,227 7,206 Fund balances - beginning 45,97945,979 45,979 - Fund balances - ending $ 45,00045,000$ 52,206$ 7,206$ 102 CITY OF WINTER SPRINGS, FLORIDA SPECIAL LAW ENFORCEMENT TRUST FUND - FEDERAL SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Fines and forfeitures-$ 59,000$ 60,934$ 1,934$ Investment income50 50 462 412 Total revenues50 59,050 61,396 2,346 Expenditures: Current: Public Safety9,000 22,758 22,608 150 Capital Outlay Public Safety- 6,132 10,956 (4,824) Total expenditures9,000 28,890 33,564 (4,674) Excess (Deficiency) of Revenues Over Expenditures 30,160(8,950) 27,832 (2,328) Net change in fund balances 30,160(8,950) 27,832 (2,328) Fund balances - beginning 42,80442,804 42,804 - Fund balances - ending $ 72,96433,854$ 70,636$ (2,328)$ 103 CITY OF WINTER SPRINGS, FLORIDA 2003 DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Investment income6,000$ 3,000$ 4,444$ 1,444$ Total revenues6,000 3,000 4,444 1,444 Expenditures: Debt Service: Principal685,000 685,000 685,000 - Interest and other charges196,550 196,650 196,098 552 Total expenditures881,550 881,650 881,098 552 Excess (Deficiency) of Revenues Over Expenditures (878,650)(875,550) (876,654) 1,996 Other Financing Sources (Uses) Transfers in894,200 894,200 894,200 - Total other financing sources and uses894,200 894,200 894,200 - Net change in fund balances 15,55018,650 17,546 1,996 Fund balances - beginning 782,341782,341 782,341 - Fund balances - ending $ 797,891800,991$ 799,887$ 1,996$ 104 CITY OF WINTER SPRINGS, FLORIDA 1999 DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Investment income1,000$ 1,000$ 832$ (168)$ Total revenues1,000 1,000 832 (168) Expenditures: Current: General government- 10,100 10,100 - Debt Service: Principal141,000 23,848 23,848 - Interest and other charges20,500 21,075 20,575 500 Total expenditures161,500 55,023 54,523 500 Excess (Deficiency) of Revenues Over Expenditures (54,023)(160,500) (53,691) 332 Other Financing Sources (Uses) Transfers in194,300 194,300 194,300 - Total other financing sources and uses194,300 194,300 194,300 - Net change in fund balances 140,27733,800 140,609 332 Fund balances - beginning 21,09221,092 21,092 - Fund balances - ending $ 161,36954,892$ 161,701$ 332$ 105 CITY OF WINTER SPRINGS, FLORIDA OAK FOREST DEBT SERVICES FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments58,400$ 58,400$ 16,826$ (41,574)$ Investment income100 100 20,368 20,268 Miscellaneous- - 21,029 21,029 Total revenues58,500 58,500 58,223 (277) Expenditures: Current: Physical environment4,175 4,175 3,909 266 Debt Service: Principal44,904 44,904 - 44,904 Interest and other charges7,096 7,096 7,096 - Total expenditures56,175 56,175 11,005 45,170 Excess (Deficiency) of Revenues Over Expenditures 2,3252,325 47,218 44,893 Other Financing Sources (Uses) Transfers out(500) (500) (500) - Total other financing sources and uses(500) (500) (500) - Net change in fund balances 1,8251,825 46,718 44,893 Fund balances - beginning (263,738)(263,738) (263,738) - Fund balances - ending $ (261,913)(261,913)$ (217,020)$ 44,893$ 106 CITY OF WINTER SPRINGS, FLORIDA TLBD PHASE II DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Impact fees/assessments40,588$ 40,588$ 37,915$ (2,673)$ Investment income225 225 2,704 2,479 Total revenues40,813 40,813 40,619 (194) Expenditures: Current: General government1,075 1,075 915 160 Debt Service: Principal41,700 41,700 37,915 3,785 Interest and other charges7,400 7,400 7,061 339 Total expenditures50,175 50,175 45,891 4,284 Excess (Deficiency) of Revenues Over Expenditures (9,362)(9,362) (5,272) 4,090 Other Financing Sources (Uses) Transfers out(500) (500) (500) - Total other financing sources and uses(500) (500) (500) - Net change in fund balances (9,862)(9,862) (5,772) 4,090 Fund balances - beginning 21,11421,114 21,114 - Fund balances - ending $ 11,25211,252$ 15,342$ 4,090$ 107 CITY OF WINTER SPRINGS, FLORIDA 1999 CONSTRUCTION FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Investment income4,400$ 4,400$ 7,301$ 2,901$ Total revenues4,400 4,400 7,301 2,901 Expenditures: Capital Outlay Culture and recreation1,200,000 10,000 2,400 7,600 Total expenditures1,200,000 10,000 2,400 7,600 Excess (Deficiency) of Revenues Over Expenditures (5,600)(1,195,600) 4,901 10,501 Other Financing Sources (Uses) Transfers in300,000 - - - Total other financing sources and uses300,000 - - - Net change in fund balances (5,600)(895,600) 4,901 10,501 Fund balances - beginning 910,424910,424 910,424 - Fund balances - ending $ 904,82414,824$ 915,325$ 10,501$ 108 CITY OF WINTER SPRINGS, FLORIDA REVOLVING REHAB FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Investment income10,000$ 10,000$ 8,245$ (1,755)$ Total revenues10,000 10,000 8,245 (1,755) Expenditures: Current: General government3,500 3,500 1,729 1,771 Total expenditures3,500 3,500 1,729 1,771 Excess (Deficiency) of Revenues Over Expenditures 6,5006,500 6,516 16 Net change in fund balances 6,5006,500 6,516 16 Fund balances - beginning 1,028,7271,028,727 1,028,727 - Fund balances - ending $ 1,035,2271,035,227$ 1,035,243$ 16$ 109 CITY OF WINTER SPRINGS, FLORIDA CITY HALL EXPANSION FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Investment income-$ -$ -$ -$ Total revenues- - - - Excess (Deficiency) of Revenues Over Expenditures -- - - Other Financing Sources (Uses) Transfers out(10,416) (10,454) (10,454) - Total other financing sources and uses(10,416) (10,454) (10,454) - Net change in fund balances (10,454)(10,416) (10,454) - Fund balances - beginning 10,45410,454 10,454 - Fund balances - ending $ -38$ -$ -$ 110 CITY OF WINTER SPRINGS, FLORIDA PUBLIC FACILITIES FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Budgeted Amounts Final Budget - Actual Positive OriginalFinalAmounts(Negative) Revenues: Investment income4,500$ 4,500$ 7,683$ 3,183$ Total revenues4,500 4,500 7,683 3,183 Expenditures: Capital Outlay Physical environment905,000 - - - Total expenditures905,000 - - - Excess (Deficiency) of Revenues Over Expenditures 4,500(900,500) 7,683 3,183 Net change in fund balances 4,500(900,500) 7,683 3,183 Fund balances - beginning 957,988957,988 957,988 - Fund balances - ending $ 962,48857,488$ 965,671$ 3,183$ 111 CITY OF WINTER SPRINGS, FLORIDA EXCELLENCE IN CUSTOMER SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended September 30, 2012 Variance with Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues: Investment income20$ 20$ 1,183$ 1,163$ Miscellaneous- 7,118 7,118 - Total revenues20 7,138 8,301 1,163 Expenditures: Current: General government- 1,775 1,771 4 Capital Outlay General government400,000 565,338 287,984 277,354 Total expenditures400,000 567,113 289,755 277,358 Excess (Deficiency) of Revenues Over Expenditures (559,975)(399,980) (281,454) 278,521 Other Financing Sources (Uses) Transfers in404,146 564,692 564,692 - Total other financing sources and uses404,146 564,692 564,692 - Net change in fund balances 4,7174,166 283,238 278,521 Fund balances - beginning -- - - Fund balances - ending $ 4,7174,166$ 283,238$ 278,521$ 112 STATISTICAL SECTION This page intentionally left blank. STATISTICAL SECTION This part of the [[628,564,1105,617][11][,I,][Arial]]City of Winter Springs [[1078,564,2300,616][11][,,][Arial]]’ comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the government’s overall health. ContentsPage Financial Trends 113 These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. Revenue Capacity 120 These schedules contain information to help the reader assess the government’s most significant local revenue. Debt Capacity 125 These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. There are no limitations placed upon the amount of debt the [[1777,1829,2109,1882][11][,I,][Arial]]City of Winter [[510,1881,692,1934][11][,I,][Arial]]Springs [[666,1881,2109,1933][11][,,][Arial]] may issue by either the City’s Charter or the City’s Code or by Florida Statutes. Demographic and Economic Information 131 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. Operating Information 133 These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. This page intentionally left blank. CITY OF WINTER SPRINGS, FLORIDA GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Business Tax 12 Fiscal YearProperty TaxFranchise Tax Utility TaxReceipts Total 20035,057 1,304 3,461 - 9,822 20045,653 1,360 3,447 - 10,460 20056,198 1,480 3,504 - 11,182 20067,383 1,919 3,832 - 13,134 20078,265 1,921 3,920 - 14,106 20087,130 - 3,976 140 11,246 20095,013- 4,106709,189 20104,538- 4,5362049,278 20114,209- 4,1691198,497 20123,901- 3,9631067,970 Taxes included in Unrestricted Intergovernmental Revenues State Revenue Fiscal YearSales TaxSharingOtherTotal 20032,134 764 136 3,034 20042,258 843 142 3,243 20052,447 1,076 158 3,681 20062,701 1,123 147 3,971 20072,443 1,108 201 3,752 20082,261 1,021 163 3,445 20091,944 907 109 2,960 20101,852 893 152 2,897 20111,873 916 226 3,015 20121,918 962 164 3,044 Note 1 Franchise fees were classified as taxes prior to fiscal year 2008 2 Business tax receipts (formerly known as Occupational licenses) were classified as licenses and permits prior to fiscal year 2008 116 CITY OF WINTER SPRINGS, FLORIDA PRINCIPAL PROPERTY TAXPAYERS September 30, 2012 (amounts expressed in thousands) 20122003 PercentagePercentage of Total of Total TaxableTaxableTaxableTaxable AssessedAssessedAssessedAssessed Taxpayer ValueRankValueValueRankValue Progress Energy Florida Corporation23,716$ 11.49%12,173$ 3 0.96% Laurel Oaks LLC19,810 21.24%22,627 1 1.79% Courtney Springs LLC16,524 31.04%13,801 2 1.09% Summer Falls LLC8,787 40.55%0.00% Bright House Networks LLC6,973 50.44%0.00% United Dominion Realty Trust6,377 60.40%7,379 4 0.58% Winter Springs Holdings, Inc5,466 70.34%0.00% Baxley Robert & Annmarie TRS3,944 80.25%0.00% Pathfinder Landology Isis3,912 90.25%0.00% Hacienda Village Co-Op Inc.3,863 100.24%4,775 6 0.38% Tuscawilla Cay LLC & Trsc 54th LLC - - 6,088 50.48% Centex Homes - - 3,291 90.26% Time Warner Entertainment - - 3,489 70.28% Bell South Communication - - 3,338 80.26% Winter Springs Golf LLC - - 3,190 100.25% Totals$ 99,3726.24%80,151$ 6.33% Source: Seminole County Property Appraiser (www.scpafl.org) 123 CITY OF WINTER SPRINGS, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years Collected within the Fiscal Year of the LevyTotal Collections to Date Fiscal Year Collections in Total Tax Levy Percentage of EndedSubsequentPercentage of 12 September 30,for Fiscal Year AmountLevyYearsAmountLevy 20035,277,940 5,048,670 95.66%9,160 5,057,830 95.83% 3 20046,215,233 96.26%7,2845,982,716 5,990,000 96.38% 3 20056,748,179 97.00%11,3856,546,002 6,557,387 97.17% 3 20067,890,100 96.21%12,1897,591,158 7,603,347 96.37% 3 20078,820,491 96.09%2,2148,475,408 8,477,622 96.11% 3 20087,442,693 96.00%11,3187,145,070 7,156,388 96.15% 3 20095,186,450 96.96%14,5865,028,524 5,043,110 97.24% 3 20104,671,821 96.41%34,3244,503,950 4,538,274 97.14% 3 20114,355,923 96.49%6,2424,203,079 4,209,321 96.63% 3 20124,080,271 96.41%3,9693,933,840 3,937,809 96.51% Note Gross taxes before discount of 1% - 4%, depending on month paid; Source: Seminole County 1 Property Appraiser (www.scpafl.org) Source: Seminole County Tax Collector (www.seminoletax.org) 2 Includes voted debt service not to exceed .25 mills for Central Winds General Obligation Debt 3 124 CITY OF WINTER SPRINGS, FLORIDA LEGAL DEBT MARGIN September 30, 2012 Neither the City of Winter Springs Charter or Code, nor the Florida State Statutes limits the amount of debt the City of Winter Springs can issue. 125 CITY OF WINTER SPRINGS, FLORIDA RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA Last Ten Fiscal Years Ratio of Net Bonded GrossNetDebt toNet Bonded FiscalAssessedBondedLess DebtBondedAssessedDebt per 1234 PopulationValueDebtService Fund YearDebtValueCapita 200332,572 1,266,969,000 3,335,000 24,260 3,310,740 0.261%102 200432,955 1,365,985,000 3,270,000 53,373 3,216,627 0.235%98 200533,321 1,483,116,250 3,205,000 46,967 3,158,033 0.213%95 200634,621 1,661,074,000 3,140,000 51,743 3,088,257 0.186%89 200734,899 2,003,805,968 3,070,000 47,572 3,022,428 0.151%87 200834,639 2,220,522,082 3,000,000 46,254 2,953,746 0.133%85 200934,340 2,009,169,114 2,925,000 36,610 2,888,390 0.144%84 201034,149 1,809,808,0242,850,000 38,879 2,811,121 0.155%82 201133,282 1,687,434,2062,770,000 40,388 2,729,612 0.162%82 201233,599 1,593,864,1532,739,107 50,549 2,688,558 0.169%80 Note 1 Source: Synergos Technologies Inc.: PopStats at June 2008; Previous years statistics may have come from multiple sources including East Central Florida Regional Planning Council or University of Florida Bureau of Economic and Business Research and Metro Orlando Economic Development Commission (www.orlandoedc.com). 2 Source: Seminole County Property Appraiser (www.scpafl.org) 3 Amount does not include special assessment bonds and revenue bonds 4 Amount available for repayment of limited general obligation note which in fiscal year 2012 served to refinance the 2002 general obligation bonds. 126 CITY OF WINTER SPRINGS, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT As of September 30, 2012 (amounts expressed in thousands) Estimated Estimated Share of Percentage Overlapping 1 Debt OutstandingApplicableDebt Governmental Unit Overlapping Debt: Seminole County General Obligation Debt4,340$ 6.66%289$ Subtotal, overlapping debt Direct Debt: 2 City of Winter Springs General Obligation Debt 100%2,7392,739 Total direct and overlapping debt7,079$ 3,028$ Note Sources: Seminole County Property Appraiser (www.scpafl.org) Seminole County Finance Department Seminole County School Board 1 Ratio of assessed valuation of taxable property in overlapping unit to that within the City of Winter Springs. 2 The City of Winter Springs has a "limited" general obligation note that is being repaid through a levy not to exceed one quarter of one mill on all taxable property in the City. 128 CITY OF WINTER SPRINGS, FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Fiscal Years Personal Education Income Level in (amounts Years of expressed in Per Capita Median Formal School Unemploy- 11 1112 3 Fiscal YearPopulationthousands)Personal IncomeAgeSchooling Enrollment ment Rate 200332,572****7,4135.3% 200432,955****7,4764.6% 200533,321****7,4923.8% 200634,621979,42828,29039.313.977,3423.2% 200734,899971,62327,84139.813.937,1153.6% 200834,6391,028,95129,7054013.726,8045.0% 200934,3401,053,17330,66940.313.726,7549.7% 201034,1491,047,58930,6774113.826,45411.8% 201133,2821,161,67534,90439.314.716,3169.5% 201233,5991,183,55835,2263613.816,3416.8% *Data not available Note 1 Source: DemographicsNow.com 2 Source: Seminole County Public Schools Source: 2012 unemployment rate from Bureau of Labor Statistics. Prior years may not reflect such a regionally-specific 3 rate. 131 CITY OF WINTER SPRINGS, FLORIDA PRINCIPAL EMPLOYERS Current Year and Nine Years Ago 1 20122003 Percentage of Percentage Total City of Total City 2 EmployeesRankEmployment EmployeesRankEmployment Employer Seminole County School Board1,775 128.85%*** City of Winter Springs217 23.53%256 2* Dearborn Electronics130 42.11%*** Publix (Winter Springs Town Center)115 31.87%*** Tuscawilla Country Club113 51.84%*** Modern Plumbing80 61.30%*** United States Post Office48 70.78%*** Dittmer Architectural Aluminum44 80.72%*** Longwood Kia / Mitsubishi40 90.65%*** The Grove Counseling Center37 100.60%*** Total2,59942.25% Note * Data Not Available 1 Per telephone survey of major local businesses and e-mail correspondence 2 Per Metro Orlando Economic Development Commission (www.orlandoedc.com), the City of Winter Springs has an estimated daytime working population of 6153 FTEs with approximately 864 business establishments as of 2012. 132 CITY OF WINTER SPRINGS, FLORIDA BUDGETED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Last Ten Fiscal Years Full-time Equivalent Employees as of September 30, Function2003200420052006200720082009201020112012 Development Services 8 8 10101010554 4 .46 General Government 36 3 741444444454241 3 6.79 Public Safety: Police Sworn Officers 59 6464707070707070 68.00 Non sworn officers - -00000000 1 Civilians 20 2020.7520.7520.7520.7520.7520.7520.75 1 8.45 2 Fire Firefighters and officers 49 50505151510000 Civilians 1 222220000 Public Works 21 23232121212120.7318.7318 Culture and Recreation 20 2132.3433.6735.7836.6334.0731.8629.1025.68 Utilities 35 404242434545454237 Stormwater 7 779999999 Total 256 272292.09303.42306.53309.38249.82244.34234.58 217.38 Part-time Employees*23******** 3 Part-time FTEs **11.0912.4214.5315.3816.3216.3417.5818.38 Note * Data not available 1 Police civilians include emergency communications center operations personnel. 2 Department was consolidated 10/02/08 with Seminole County Fire Department 3 FTEs - Full-time Equivalent Units; this statistic replaces part-time employee count starting in Fiscal Year 2005 and these units are included in the appropriate function totals for FY 2005 - 2009. 133 OTHER REPORTS This page intentionally left blank. REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH [[908,787,1821,839][11][B,I,][Arial]]GOVERNMENT AUDITING STANDARDS Honorable Mayor and City Commissioners [[300,998,958,1051][11][,I,][Arial]]City of Winter Springs, Florida We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of [[1955,1209,2300,1262][11][,I,][Arial]]City of Winter [[300,1262,647,1315][11][,I,][Arial]]Springs, Florida [[623,1262,2300,1314][11][,,][Arial]], as of and for the year ended September 30, 2012, which collectively comprise the City’s basic financial statements and have issued our report thereon dated February 18, 2013. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in [[300,1472,979,1525][11][,I,][Arial]]Government Auditing Standards [[953,1472,2139,1524][11][,,][Arial]] issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting. A[[347,1999,974,2052][11][,I,][Arial]]deficiency in internal control [[941,1999,2300,2051][11][,,][Arial]]exists when the design or operation of a control does not allow management of employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A [[1755,2105,2195,2158][11][,I,][Arial]]material weakness [[2168,2105,2300,2157][11][,,][Arial]]is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. MD&CLLC CDIRMITAVIS OMPANY, ERSSOF 605 .OBINSONTREET,UITE 635 RLANDO,LORIDA 32801 TFE ELEPHONE: 407-843-5406 AX: 407-649-9339 MAIL: INFO@MCDIRMITDAVIS.COM MPCPSAIOCPAFIOCPA EMBERS: RIVATE OMPANIES RACTICE ECTION MERICAN NSTITUTE FERTIFIED UBLIC CCOUNTANTS LORIDA NSTITUTE FERTIFIED UBLIC CCOUNTANTS 137 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under [[375,783,1077,836][11][,I,][Arial]]Government Auditing Standards We noted certain matters that we reported to management of the [[1714,888,2188,941][11][,I,][Arial]]City of Winter Springs [[2161,888,2300,940][11][,,][Arial]] in a separate letter dated February 18, 2013. This report is intended solely for the information and use of management, the City Commission and the Auditor General of the State of Florida, and is not intended to be, and should not be used by anyone other than these specified parties. February 18, 2013 138 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL Honorable Mayor and City Commissioners [[300,998,945,1051][11][,I,][Arial]]City of Winter Springs, Florida Compliance We have audited City of Winter Springs, Florida’s (the City) compliance with the types of compliance requirements described in the [[1215,1262,2299,1315][11][,I,][Arial]]Department of Financial Services’ State Projects [[300,1314,832,1367][11][,I,][Arial]]Compliance Supplement [[795,1314,2300,1366][11][,,][Arial]] that could have a direct and material effect on each of the City’s major state projects for the year ended September 30, 2012. The City’s major state projects are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major state projects is the responsibility of the City’s management. Our responsibility is to express an opinion on the City’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in [[300,1789,983,1842][11][,I,][Arial]]Government Auditing Standards [[956,1789,2300,1841][11][,,][Arial]], issued by the Comptroller General of the United States; and Chapter 10.550, [[644,1841,1269,1894][11][,I,][Arial]]Rules of the Auditor General [[1229,1841,2114,1893][11][,,][Arial]]. Those standards, and Chapter 10.550, [[2080,1841,2300,1894][11][,I,][Arial ]]Rules of [[300,1894,739,1947][11][,I,][Arial]]the Auditor General [[698,1894,2299,1946][11][,,][Arial]], require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a state project occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City’s compliance with those requirements. In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major state projects for the year ended September 30, 2012. MD&CLLC CDIRMITAVIS OMPANY, ERSSOF 605 .OBINSONTREET,UITE 635 RLANDO,LORIDA 32801 TFE ELEPHONE: 407-843-5406 AX: 407-649-9339 MAIL: INFO@MCDIRMITDAVIS.COM MPCPSAIOCPAFIOCPA EMBERS: RIVATE OMPANIES RACTICE ECTION MERICAN NSTITUTE FERTIFIED UBLIC CCOUNTANTS LORIDA NSTITUTE FERTIFIED UBLIC CCOUNTANTS 139 Internal Control over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to state projects. In planning and performing our audit, we considered the City’s internal control over compliance with the requirements that could have a direct and material effect on a major state project to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with Chapter 10.550, [[469,730,1103,783][11][,I,][Arial]]Rules of the Auditor General [[1063,730,2300,782][11][,,][Arial]], but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with the type of compliance requirement of a state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, the City Commissioners, the Auditor General of the State of Florida, and state awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. February 18, 2013 140 CITY OF WINTER SPRINGS, FLORIDA E SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANC Year Ended September 30, 2012 State State grantorCSFAGrant State Grantor program titleNumberNumberExpenditures State of Florida, Department of Environmental Protection: Statewide Surface Water Restoration and Wastewater Projects *37.077WW5906001,433,522$ Passed through St. John's River Water Management District: Water Protection and Sustainability Program*37.066307,418 Total state financial assistance$ 1,740,940 * Denotes a major program See accompanying Notes to Schedule of Expenditures of State Financial Assistance 141 CITY OF WINTER SPRINGS, FLORIDA NOTES TO SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE Year Ended September 30, 2012 Note 1 - Basis of Presentation: The accompanying schedule of expenditures of state financial assistance includes the state grant activity of the City of Winter Springs, Florida (the City) under programs of the state government for the year ended September 30, 2012. The information in the schedule of expenditures of state financial assistance is presented in accordance with the requirements of Section 215.97, Florida Statutes. Because the Schedules present only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net assets or cash flows of the City. Note 2 - Summary of Significant Accounting Policies: Expenditures reported on the accompanying schedules are reported on the accrual basis of accounting. Therefore, amounts reported on the schedule are based on expenditures incurred as of September 30, 2012, even if grant or loan was received subsequent to that date. 142 CITY OF WINTER SPRINGS, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - STATE FINANCIAL ASSISTANCE PROJECTS Year Ended September 30, 2012 Part A - Summary of Auditor’s Results: 1. The auditor’s report expresses an unqualified opinion on the City of Winter Springs, Florida (the City) basic financial statements. 2. No significant deficiencies relating to the audit of the financial statements are reported in the Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with [[450,1046,1117,1099][11][,I,][Arial]]Government Auditing Standards [[1090,1046,1140,1098][11][,,][Arial]]. 3. No instances of noncompliance material to the financial statements of the City, which would be required to be reported in accordance with [[1579,1204,2265,1257][11][,I,][Arial]]Government Auditing Standards [[2237,1204,2287,1256][11][,,][Arial]], were disclosed during the audit. 4. No significant deficiencies relating to the audit of the major federal award programs or state projects are reported in the Independent Auditor’s Report on Compliance with Requirements Applicable to each Major Program and on Internal Control over Compliance in Accordance with the types of compliance requirements described in the Department of Financial Services’ State Projects Compliance Supplement, Florida Department of Environmental Protection Water Protection and Sustainability Program (CSFA 37.066). 5. The auditor’s report on compliance with requirements that could have a direct and material effect on each major state project for the City expresses an unqualified opinion. 6. Our audit did not disclose any findings related to state projects required to be disclosed under Chapter 10.557. 7. The programs tested as major programs included: Florida Department of Environmental Protection Statewide Surface Water Restoration and Wastewater Projects (CSFA 37.077) and Florida Department of Environmental Protection Water Protection and Sustainability Program (CFSA 37.066). 8. The threshold used for distinguishing between Type A and B programs was $300,000. 9. The City did not qualify as a low-risk auditee. Part B - Findings – Financial Statement Audit: None Part C - Findings and Questioned Costs – State Financial Assistance Projects: None Part D - Findings and Questioned Costs – Major State Financial Assistance Projects Audit: None 143 This page intentionally left blank. MANAGEMENT LETTER Honorable Mayor and City Commissioners [[300,787,945,840][11][,I,][Arial]]City of Winter Springs, Florida We have audited the financial statements of the City of [[1424,945,1752,998][11][,I,][Arial]]Winter Springs [[1725,945,1775,997][11][,,][Arial]], [[1751,945,1916,998][11][,I,][Arial]]Florida [[1891,945,2299,997][11][,,][Arial]], as of and for the fiscal year ended September 30, 2012, and have issued our report thereon dated February 18, 2013. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in [[1825,1209,2300,1262][11][,I,][Arial]]Government Auditing [[300,1262,532,1315][11][,I,][Arial]]Standards [[505,1262,2300,1314][11][,,][Arial]], issued by the Comptroller General of the United States; and Chapter 10.550 Rules of the Florida Auditor General. We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on and Audit of the Financial Statements Performed in Accordance with Government Auditing Standards, Independent Auditor’s Report on Compliance with Requirements That Could Have a Direct and Material Effect on each Major State Project and on Internal Control over Compliance in Accordance with Chapter 10.550 Rules of the Florida Auditor General, and Schedule of Findings and Questioned Costs. Disclosures in those reports, which are dated February 18, 2013, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter is includes the following information, which is not included in the aforementioned auditor’s reports or schedule: Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. There were no prior year findings. Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the [[1957,2427,2133,2480][11][,I,][Arial]]City of [[2117,2427,2284,2480][11][,I,][Arial]]Winter [[450,2480,632,2533][11][,I,][Arial]]Springs [[605,2480,655,2532][11][,,][Arial]], [[631,2480,821,2533][11][,I,][Arial]]Florida [[784,2480,1802,2532][11][,,][Arial]]complied with Section 218.415, Florida Statutes. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any findings and recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. MD&CLLC CDIRMITAVIS OMPANY, ERSSOF 605 .OBINSONTREET,UITE 635 RLANDO,LORIDA 32801 TFE ELEPHONE: 407-843-5406 AX: 407-649-9339 MAIL: INFO@MCDIRMITDAVIS.COM MPCPSAIOCPAFIOCPA EMBERS: RIVATE OMPANIES RACTICE ECTION MERICAN NSTITUTE FERTIFIED UBLIC CCOUNTANTS LORIDA NSTITUTE FERTIFIED UBLIC CCOUNTANTS 144 Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of provisions of contracts and grant agreements or abuse that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but more than inconsequential. In connection with our audit, we did not have any such findings. Section 10.554(1)(i)5., Rules of the Auditor General, provides that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud, illegal acts or abuse, and (2) Deficiencies in internal control that are not significant deficiencies. In connection with our audit, we did not have any such findings. Section 10.554(1)(i)6., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information has been disclosed in the notes to the financial statements. Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to whether or not the local governmental entity has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the [[1961,1480,2135,1533][11][,I,][Arial]]City of [[2118,1480,2285,1533][11][,I,][Arial]]Winter [[450,1533,632,1586][11][,I,][Arial]]Springs [[605,1533,655,1585][11][,,][Arial]], [[640,1533,804,1586][11][,I,][Arial]]Florida [[780,1533,2300,1585][11][,,][Arial]] did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the annual financial report for the [[1345,1747,1517,1800][11][,I,][Arial]]City of [[1498,1747,1831,1800][11][,I,][Arial]]Winter Springs [[1804,1747,1854,1799][11][,,][Arial]], [[1835,1747,1999,1800][11][,I,][Arial]]Florida [[1974,1747,2299,1799][11][,,][Arial]] for the fiscal year ended September 30, 2012, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2012. We determined that these two reports are in agreement. Pursuant to Sections 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General, we applied financial condition assessment procedures. It is management’s responsibility to monitor the entity’s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information of the [[1966,2488,2138,2541][11][,I,][Arial]]City of [[2118,2488,2300,2541][11][,I,][Arial]]Winter [[300,2541,482,2594][11][,I,][Arial]]Springs [[455,2541,505,2593][11][,,][Arial]], [[486,2541,650,2594][11][,I,][Arial]]Florida [[626,2541,2300,2593][11][,,][Arial]] and management, and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. February 18, 2013 145 Honorable Mayor and City Commissioners [[300,524,958,577][11][,I,][Arial]]City of Winter Springs, Florida We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information, of the[[1954,735,2300,788][11][,I,][Arial]] City of Winter [[300,787,651,840][11][,I,][Arial]]Springs, Florida [[626,787,2300,839][11][,,][Arial]] for the year ended September 30, 2012. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards,[[543,893,1254,946][11][,I,][Arial]]Government Auditing Standards [[1227,893,2300,945][11][,,][Arial]], as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated November 19, 2012. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings [[300,1262,1234,1315][11][,I,][Arial]]Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the [[1178,1420,1818,1473][11][,I,][Arial]]City of Winter Springs, Florida [[1794,1420,2300,1472][11][,,][Arial]] are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2012. We noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statement were: Management’s estimate for the allowance for doubtful account is based on historical loss levels, and an analysis of the individual accounts. We evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate for the allowance for depreciation is based on the estimated useful lives of the capital assets. We evaluated the reasonableness of the useful lives as well as the depreciation methods in determining that it is reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. MD&CLLC CDIRMITAVIS OMPANY, ERSSOF 605 .OBINSONTREET,UITE 635 RLANDO,LORIDA 32801 TFE ELEPHONE: 407-843-5406 AX: 407-649-9339 MAIL: INFO@MCDIRMITDAVIS.COM MPCPSAIOCPAFIOCPA EMBERS: RIVATE OMPANIES RACTICE ECTION MERICAN NSTITUTE FERTIFIED UBLIC CCOUNTANTS LORIDA NSTITUTE FERTIFIED UBLIC CCOUNTANTS 146 [[300,309,1311,362][11][,I,][Arial]]Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. [[300,572,1211,625][11][,I,][Arial]]Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. The uncorrected misstatement of the financial statements is not accruing additional Ad Valorem Revenue and receivable in the General Fund of $34,977. Management has determined that the effects are immaterial, both individually and in the aggregate, to the financial statements as a whole. In addition, the remaining misstatements detected as a result of audit procedures and corrected by management were not material, either individually or in the aggregate, to the financial statements taken as a whole. [[300,1152,1032,1205][11][,I,][Arial]]Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. [[300,1521,964,1574][11][,I,][Arial]]Management Representations We have requested certain representations from management that are included in the management representation letter dated February 18, 2013. [[300,1792,1662,1845][11][,I,][Arial]]Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. [[300,2319,966,2372][11][,I,][Arial]]Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. 147 Other Matters With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statement, or to the financial statements themselves This information is intended solely for the use of management, the City Commission and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, February 18, 2013 148 This page intentionally left blank. This page intentionally left blank.