Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
2021 04 26 Regular 501 - 2020 Comprehensive Annual Financial Report (CAFR)
+ , REGULAR AGENDA ITEM 501 CITY COMMISSION AGENDA I APRIL 26, 2021 REGULAR MEETING TITLE 2020 Comprehensive Annual Financial Report SUMMARY The Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2020 was prepared and presented by the City's external auditors McDirmit Davis. The Comprehensive Annual Financial Report is prepared and presented to give the City Commission, citizens, and other users a greater understanding of the City's financial standing. Our 2020 financial statements received an unmodified opinion (best possible) by the auditors. Additionally, the 2020 Comprehensive Annual Financial Report will be submitted to the Government Finance Officers Association for consideration of their Certificate of Achievement award as we believe it continues to conform to the program's stringent requirements. The City's Annual Report has previously been awarded GFOA's Certificate of Achievement award for the past 20 consecutive years. RECOMMENDATION Staff recommends the City Commission accept the Comprehensive Annual Financial Report as presented for the Fiscal Year Ended September 30th 2020. 1 lc : rrY of S 202 deft COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 20202 This page intentionally left blank. Xt4TZR o` s� .01x Incorporated 1959 0©WE 3 City of Winter Springs, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Year Ended September 30, 2020 J���TER Incorporated • 1959 ' I�vC00 WEI�J�� Prepared by: Finance Department 4 This page intentionally left blank. Xt4TZR o` s� .01x Incorporated 1959 0©WE 5 INTRODUCTORY SECTION This section contains the following subsections: ■ Table of Contents ■ Letter of Transmittal ■ GFOA Certificate of Achievement ■ List of Principal Officials ■ Organizational Chart 6 This page intentionally left blank. Xt4TZR o` s� .01x Incorporated 1959 0©WE 7 City of Winter Springs, Florida Table of Contents 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 3-15 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position 16 Statement of Activities 17 Fund Financial Statements: Balance Sheet-Governmental Funds 18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 19 Statement of Revenues, Expenditures and Changes in Fund Balances-Governmental Funds 20 Reconciliation of the Statement of Revenues,Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 21 Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual: General Fund 22 Road Improvements Special Revenue Fund 23 Solid Waste/Recycling Special Revenue Fund 24 Statement of Net Position-Proprietary Funds 25-26 Statement of Revenues, Expenses and Changes in Fund Net Position-Proprietary Funds 27 Statement of Cash Flows-Proprietary Funds 28-29 Statement of Fiduciary Net Position-Fiduciary Funds 30 Statement of Changes in Fiduciary Net Position-Fiduciary Funds 31 i $ City of Winter Springs, Florida Table of Contents Page II. Financial Section-Continued: Notes to Financial Statements 32-59 Required Supplementary Information Schedule of Changes in the City's Net OPEB Liability and Related Ratios-Plan Retiree Continuation Insurance Plan 60 Schedule of Changes in Net Pension Liability and Related Ratios 61 Schedule of Contributions 62-63 Schedule of Investment Returns 64 Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Combining Balance Sheet-Nonmajor Governmental Funds 65-70 Combining Statement of Revenues, Expenditures and Changes In Fund Balances-Nonmajor Governmental Funds 71-76 Schedule of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual: Special Revenue Funds 77-88 Debt Service Funds 89-91 Capital Projects Funds 92-95 III. Statistical Section: Financial Trends Net Position by Component 96 Changes in Net Position 97-98 Governmental Activities Tax Revenues by Source 99 Fund Balances of Governmental Funds 100 Changes in Fund Balances of Governmental Funds 101-102 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 103 Property Tax Rates, Direct and Overlapping Governments 104 Special Assessment Billings and Collections 105 Principal Property Taxpayers 106 Property Tax Levies and Collections 107 ii g City of Winter Springs, Florida Table of Contents Page III. Statistical Section-Continued: Debt Capacity Legal Debt Margin 108 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita 109 Ratio of Outstanding Debt by Type 110 Direct and Overlapping Governmental Activities Debt 111 Pledged-Revenue Coverage 112-113 Demographic and Economic Information Demographic and Economic Statistics 114 Principal Employers 115 Operating Information Budgeted Full-time Equivalent City Government Employees by Function 116 Operating Indicators by Function 117 Capital Asset Statistics by Function 118 IV. Other Reports: Independent Auditor's Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 119 Management Letter 120-121 Independent Accountant's Report on Compliance with the Requirements of Section 218.415, Florida Statutes 122 Impact Fee Affidavit 123 iii 10 J4�NTER CITY OF WINTER SPRINGS, FLORIDA Incorporated • 1959 ' 'ti�oD wE tR�y� 1126 EAST STATE ROAD 434 WINTER SPRINGS, FLORIDA 32708-2799 Telephone(407)327-1800 March 24th, 2021 To the Honorable Mayor, City Commission and Citizens of the City of Winter Springs, Florida: It is with great pleasure that we present to you the City of Winter Springs, Florida Comprehensive Annual Financial Report for the fiscal year ended September 30, 2020. Florida Statutes, Chapter 166.241 and the rules of the Florida Auditor General, Chapter 10.550 require that all general-purpose local governments publish a complete set of financial statements presented in conformity with Generally Accepted Accounting Principles (GAAP) and that they be audited in accordance with Generally Accepted Auditing Standards (GAAS) by a firm of licensed Certified Public Accountants Management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Winter Springs has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Winter Springs'financial statements inconformity with GAAP. Because the cost of internal controls should not outweigh their benefit, the City of Winter Springs' comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, to the best of our knowledge and belief,we assert that this financial report is complete and reliable in all material respects. The City of Winter Springs' financial statements have been audited by McDirmit Davis, a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City of Winter Springs for the fiscal year ended September 30, 2020 are free of material misstatement. The independent audit involved examination of evidence,on a test basis,supporting the amounts and disclosures in the financial statements; assessment of the accounting principles used and significant estimates made by management; and an evaluation of the overall financial statement presentation. Based upon the audit, the independent auditor concluded that reasonable basis existed to render an unmodified opinion that the City of Winter Springs'financial statements for the fiscal year ended September 30, 2020 are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. The City of Winter Springs' Management's Discussion and Analysis (MD&A) can be found immediately following the report of the independent auditors and provides a narrative introduction,overview,and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Profile of the Government The City of Winter Springs,incorporated in 1959,is located in Seminole County,which is a part of the greater Orlando metropolitan area in East Central Florida. The City currently has a land area of approximately 13.3 square miles and a population of approximately 38,000 iv 11 The City operates according to a Council/Manager form of government, with an appointed City Manager, five elected City Commissioners and a separately elected Mayor. The Mayor and Commission are elected for four-year terms. The governing body is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring the City's Manager, Clerk and Attorney. The City Manager is responsible for carrying out the policies and ordinances of the governing body, for overseeing the day-to-day operations of the government and for hiring the directors of the various departments. The City of Winter Springs provides a full range of services, including police protection;the construction and maintenance of highways, streets and other infrastructure; and recreational facilities, activities and cultural events. The City maintains both a Water and Sewer Utility Fund, a Stormwater Utility Fund, and a Development Services Fund,which function, in essence, as departments of the City of Winter Springs and therefore have been included as an integral part of the City of Winter Springs'financial statements. The annual budget serves as the foundation for the City of Winter Springs' financial planning and control. All departments of the City of Winter Springs are required to submit requests for appropriation to the City Manager. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents the proposed budget to the City Commission for review on or before July 1. The City Commission is required to hold public hearings on the proposed budget and to adopt a final budget no later than September 30,the close of the City's fiscal year. The appropriated budget is prepared by fund (e.g., General Fund), department (e.g., Police Department) and division (e.g., Criminal Investigation). The City Manager may make transfers of appropriations within a department. Transfers of appropriations between departments, however, require the special approval of the City Commission. Original and final amended budget-to-actual comparisons are provided in this report for each individual governmental fund.The General Fund,the Road Improvements Fund and the Solid Waste/Recycling Fund, are presented on pages 22-24 as part of the basic financial statements for the governmental funds. The non-major governmental funds' budget comparisons are presented in the governmental fund subsection of this report which starts on page 77. Factors Affecting Financial Condition The information presented in the financial statements is best understood when it is considered from the broader perspective of the specific environment within which the City of Winter Springs operates. Seminole County has adopted a one-cent local government infrastructure sales tax which will be in effect from January 1, 2015 through December 31, 2024. The intent of this legislation is to improve the infrastructure of the Seminole County public school system and other public infrastructure within the County and its municipalities. Per the interlocal agreement, 2.99% of net revenues are to be distributed to the City of Winter Springs. It is estimated that this distribution will be in excess of$2M for the fiscal year 2020-2021. Approximately 84%of the City's tax base is comprised of residential properties with a small amount of retail office and light industrial developments. Per the DR 422 (Certificate of Final Taxable Value)and relative to the 2019-2020 fiscal year (tax year 2019), the gross taxable value reflects an increase of 9.41% from the prior year. During fiscal year 2019-2020 (tax year 2019), through prudent fiscal management, the City was able to maintain the operating millage rate at 2.43 and was able to forgive voted debt millage, therefore reducing total millage by.0500 mils. At the local level, revenues such as review and permit fees, investment income and state sales tax revenues continue to hold steady. New construction in Winter Springs has been robust for the past several years. Tuskawilla crossings is a single-family residential project currently still under construction and set for completion in late 2021. Single- family attached projects include Seminole Crossings Townhomes (114 units)and The Hawthorne, located near the Cross Seminole Trail on SR 434. Commercial construction projects started in 2020 include Wendy's, while Chau Medical Center, Chase Bank, and Winter Springs Marketplace have started the permitting process and should begin construction in 2021. V 12 Seminole County Public School system is the 12th largest in the state and widely recognized as a Premier National School District. It boasts an above average graduation rate and is ranked #1 in STEM. Winter Springs is home to four elementary schools, one middle and one high school in the district. Winter Springs is also home to Choices in Learning Charter School, Willow School, The Primrose School, and Creative Inspiration Journey School which provide diverse educational options. Nearby Seminole State College and University of Central Florida offer our community an affordable and excellent higher education choice.The City also continues its partnership with the UCF Business Incubation Program to foster the development of early-stage businesses in Central Florida. The City of Winter Springs continues to offer its citizens the highest quality services and community-minded events. Due to the COVID pandemic this year the City had to get creative with revising the structure and layout of community events. Movie in the Park was an added event allowing citizens to come together while keeping their distance. The City also hosts a number of community seasonal events including Spring Explore Outdoors with free tree giveaways, Celebration of Freedom, Hometown Harvest, a salute to our veterans in the Veteran's Day Ceremony, and Winter Wonderland Parade. The City's Sports Partnerships include traditional sports such as Babe Ruth Baseball/Softball, Florida Kraze Krush Soccer&Winter Springs Basketball and Football Leagues. Our very popular summer camp program offers affordable day camp options and spectacular field trips. With additional protocols in place we are expecting to bring these back next summer. The Winter Springs Police Department also coordinates events in the community. In the summer months, the department hosts its annual Community Youth Outreach program.This program is designed to engage our youth, in an effort to promote positive interaction and bridge the gap with Law Enforcement. During the holiday season,children and families in need from Winter Springs are nominated to participate in our annual `Shop with a Cop'festivities.Through the school supply drive the Winter Springs Police Department provides school supplies to over 200 children with in our community. The City has a "Perk up Parks" program which is a multi-million dollar Parks initiative with numerous park upgrades including a new and expanded "Torcaso Cove" at Torcaso Park, which is an ocean, water, and pirate themed adventure."Mount Trotwood"received an entrance facelift,and a Trailhead Restroom is being added at Central Winds Park along with a paved parking lot at the lower baseball fields. Together with the Winter Springs Senior Association, a number of activities and outings are offered to our seniors, such as yoga, ceramics and the ever-popular therapy pool. Due to COVID restrictions several of the senior center activities have been suspended but will reopen in the near future.While being closed the senior center has gone through several upgrades as well. Long-term financial planning. The City Commission updated and adopted a 5-year Capital Improvements Plan (CIP) in September 2017 for fiscal years 2018 through 2022. The CIP is a multi-year prioritized schedule of improvements that lists each capital improvement with the year of intended purchase/ commencement; annual expenditure; and method of financing. As a part of the update to the City's Comprehensive Plan, City staff are preparing an updated 5-year plan to present to the City Commission. Each year,the plan is reviewed to ensure that all necessary capital improvements are incorporated into the budget process. It should be noted however,that the CIP is not a static document but a flexible and dynamic one that may change to reflect changing priorities, opportunities, costs, or financing approach. Relevant Financial Policies. In fiscal year 2020, the City implemented GASB Statement No. 89, Accounting forInterest Cost Incurred before the End of Construction Period.This statement eliminates the requirement to capitalize interest on enterprise fund construction projects.The City also implemented GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. This pronouncement provides temporary relief to governments and other stakeholders in light of the COVID-19 pandemic by postponing the effective dates of provisions in certain other statements. There was no effect on the beginning balances of the City for the implementation of either statement. Vi 13 Major Initiatives. Continued improvements in customer service and information reporting are on-going, such as upgrades in several behind the scenes technological systems. Upgrades and refurbishment of the City's Water and Wastewater Plants and recreational facilities. Infrastructure replacement and improvement in transportation such as bridge and roadway replacement. There have also been and will continue to be city-wide safety improvements across parks, sidewalk replacements, and roadway improvements. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Winter Springs for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2019. This was the twentieth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government must publish an easily readable and efficiently-organized Comprehensive Financial Report. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current annual report continues to meet the Certificate of Achievement Program requirements and will be submitting it to the GFOA to determine its eligibility for another fiscal year. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department. We would like to express our appreciation to all members of the department who assisted and contributed to its preparation. Other City departments, although not extensively involved in year-end audit activities, contributed significantly by ensuring the accuracy and integrity of accounting information compiled throughout the year. Without their diligence, the work of the Finance Department would have been considerably more difficult. Appreciation must also be expressed to the City's auditors whose suggestions and attention to detail enhanced the quality of this report. In closing,we would also like to express appreciation to the Mayor and the City Commission for their support and for maintaining high standards of professionalism in the management of the City of Winter Springs' finances. Respectfully submitted, Shawn D. Boyle Marialaina Sonksen City Manager Finance Director A 14 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Winter Springs Florida For its Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2019 Executive Director/CEO 15 Page I viii City of Winter Springs, Florida List of Principal Officers Mayor Charles Lacey Deputy Mayor/Commissioner Ted Johnson Commissioner Jean Hovey Commissioner Kevin Cannon Commissioner TiAnna Hale Commissioner Geoff Kendrick CITY MANAGER Shawn Boyle CITY CLERK Christian Gowan LEGAL COUNSEL Anthony Garganese Garganese,Weiss&D'Agresta, P.A. DEPARTMENT DIRECTORS Community Development Christopher Schmidt Finance Maria Sonksen Operations Casey Howard Police Chief Chris Deisler Utility/Public Works Lena Rivera Page I ix 16 r o c C U 4.1-, N V E - = cc 0 i OU E L N -O c — a Q O O c�6 > O W rn OC U a U E 0 c cn (D +r E .r v) im = E M C (Q c ,0 F.— 3 Q � C •L 3 N U d Q L- Z, a) L c E a) 'c c p � L U > � a0 &Z aoc V p ca c W a) — Q a —iw a UCS U ca c O L L L � N p � U � Yau ' 3a� y (D -0 i O O O a) r aj O i '� cu to p 0 caw ' Cc 5, 3 U � E •j' c +; a - cam $ Q 0 V a 0 p p O d 00 fn O m fn O O L C O U S > U (D c � C a) v p U fn ++ to 01 W fG C O O -0 w •� � a) c6 � C � � Cc CO LCD Ea' o +, C � 2 U li +� Q O O Y O 2 CD co p U U O � x O N ca 4 0) r� > 4- OL C 2oC � � 5ixt000aa C +, O o v '4-J a) •� N C V •� O � ca E ca U � 13) � O a) c c a) c U) y fC ++ ca o '� L v O = O O 2 a) CoO +� y � L 0 cts U a) O O 0 Qom a H U w w . 0 0 0 17 Financial Section 18 934 North Magnolia Avenue,Suite 100 McDirmit Davis Orlando,Florida 32803 Tel.407-843-5406 www.mcdirmitdavis.davis.com INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Commissioners City of Winter Springs,Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of tMnter Springs, Florida, (the "City")as of and for the year ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements The City's management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America;this includes the design,implementation,and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion,the financial statements referred to above present fairly,in all material respects,the respective financial position of the governmental activities, the business-type activities,each major fund,and the aggregate remaining fund information of The City, as of September 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund, road improvements special revenue fund, and solid waste/recycling special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, budgetary comparison information, pension and other postemployment benefits disclosures as listed in the table of contents, 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 the LlUbR�u partner 19 of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise The City's basic financial statements. 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 combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion,the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and,accordingly,we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards,we have also issued a report dated March 24,2021 on our consideration of The City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws,regulations,contracts, and grant agreements and other matters.The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering The City's internal control over financial reporting and compliance. &Q.uu D IHw' o Orlando, Florida March 24,2021 Page 12 20 City of Winter Springs, Florida 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, 2020. 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-vi of this report. Financial Highlights • The assets and deferred outflows of the City of Winter Springs exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by$133,403,012 (net position). Of this amount, $32,437,711 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. • As a result of the current year's activities,the government's total net position increased by$12,474,213 or 10.32%from the prior year. • As of the dose of the current fiscal year,the City of Winter Springs'governmental funds reported combined ending fund balances of$38,408,217. Approximately 22% of this total amount, $8,560,892, 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$8,597,379,or 58%of total general fund expenditures. • As a result of current year's activities,the City of Winter Springs'total debt decreased by$2,071,359 (6%). 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 government-wide financial statements 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 Statement of Net Position presents information on all of the City of Winter Springs' assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Winter Springs is improving or declining. The Statement of Activities presents information showing how the government's net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods(e.g.,uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Winter Springs that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of 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. Page 13 21 City of Winter Springs, Florida Management's Discussion and Analysis The government-wide financial statements include only the City of Winter Springs itself(known as the primary government). 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 16-17 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Winter Springs, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Al of the funds of the City of Winter Springs can be divided into three categories:governmental funds,proprietary funds,and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government- wide financial statements. However, unlike the government-wide financial statements,governmental fund financial statements focus on near-term inflows and outflows of spendable resources,as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating 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 governmental funds with similar information presented for governmental activities in the government- wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Winter Springs maintains 22 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, and Solid Waste/Recycling Special Revenue Fund, all three of which are considered to be major funds. Data from the other 19 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City of 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 22-24. Budgetary comparison schedules have been provided for the nonmajor funds on pages 78-95. The basic governmental fund financial statements can be found on pages 18-21 of this report. Proprietary Funds The City of Winter Springs maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented as business-type activities 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 25-29 of this report. Page 14 22 City of Winter Springs, Florida Management's Discussion and Analysis Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City's 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 30-31 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 32-59 of this report. Required Supplementary Information(RSI) RSI can be found on pages 60-64 of this report. Other Information The combining statements referred to earlier in connection with nonmajor governmental funds are presented after this. Combining and individual fund statements and schedules can be found on pages 65-76 of this report. Government-wide Financial Analysis Statement of Net Position As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of Winter Springs, assets and deferred outflows of resources exceeded liabilities and deferred outflows by$133,403,012 at the close of the most recent fiscal year. Of the City of Winter Springs' net position, $82,307,317 or 62%, 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 position subject to external restrictions as to how it may be used total$18,657,984(14%). The remaining balance of unrestricted net position($32,437,711 or 24%)may be used to meet the government's ongoing obligations to citizens and creditors. At September 30,2020,the City of Winter Springs is able to report positive balances in all three categories of net position,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. THIS SECTION INTENTIONALLY LEFT BLANK Page 15 23 City of Winter Springs, Florida Management's Discussion and Analysis The following table reflects the condensed Statement of Net Position for the current and prior year. For more detail see the Statement of Net Position on page 16. Statement of Net Position as of September 30 Governmental Activities Business-type Activities Total Primary Government 2020 2019 2020 2019 2020 2019 Assets: Current and other assets $ 41,378,922 $ 39,448,813 $ 35,955,685 $ 32,374,040 $ 77,334,607 $ 71,822,853 Restricted assets 88,934 78,774 746,540 742,089 835,474 820,863 Capital assets 59,122,076 58,397,153 40,475,153 37,650,254 99,597,229 96,047,407 Total assets 100,589,932 97,924,740 77,177,378 70,766,383 177,767,310 168,691,123 Deferred Outflows of Resources: Deferred charge on refunding $ 9,289 $ 10,218 $ 73,829 $ 164,735 $ 83,118 $ 174,953 Deferred outflow of pension and OPEB 903,153 919,865 247,794 235,951 1,150,947 1,155,816 912,442 930,083 321,623 400,686 1,234,065 1,330,769 Liabilities: Current liabilities 1,922,542 1,701,831 970,389 1,310,989 2,892,931 3,012,820 Long term liabilities 18,616,145 20,590,397 23,064,438 24,644,351 41,680,583 45,234,748 Other liabilities 86,344 75,884 664,554 662,169 750,898 738,053 Total liabilities 20,625,031 22,368,112 24,699,381 26,617,509 45,324,412 48,985,621 Deferred Inflows of Resources: Deferred inflow of pension and OPEB $ 196,564 $ 80,728 $ 77,387 $ 26,744 $ 273,951 $ 107,472 Net Position: Net investment in capital assets 54,921,943 53,683,006 27,385,374 22,712,599 82,307,317 76,395,605 Restricted 18,010,777 17,089,058 647,207 612,971 18,657,984 17,702,029 Unrestricted 7,748,059 5,633,919 24,689,652 21,197,246 32,437,711 26,831,165 Total net position $ 80,680,779 $ 76,405,983 $ 52,722,233 $ 44,522,816 $ 133,403,012 $ 120,928,799 THIS SECTION INTENTIONALLY LEFT BLANK Page 6 24 City of Winter Springs, Florida Management's Discussion and Analysis Statement of Changes in Net Position The following table reflects the Statement of Changes in Net Position for the current and prior year. For more detailed information see the Statement of Activities on page 17. As a result of the current year's activities,the government's total net position increased by$12,474,213 or 10.32%from the prior year. The previous fiscal year,2019,net position increased by$11,309,586. Governmental activities increased net position by$4,274,796 in fiscal year 2020 compared to an increase of$6,325,542 in 2019. The increase in net position for fiscal year 2020 is less than the prior year's increase primarily due to recognition of FEMA reimbursement in the prior year. Business-type activities increased net position by$8,199,417 in fiscal year 2020 compared to an increase of$4,984,044 in 2019. The increase in net position in fiscal year 2020 is more than the prior fiscal year's increase primarily due to contributed assets and grant revenues. Following the Changes in Net Position 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-type activities can be found in the section entitled Financial Analysis of Government's Funds on page 11. 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 specific program revenues. "THIS SECTION INTENTIONALLY LEFT BLANK" Page 17 25 City of Winter Springs, Florida Management's Discussion and Analysis Changes in Net Position for the year ended September 30 Governmental Activities Business-type Activities Total Primary Government 2020 2019 2020 2019 2020 2019 Revenues: Program Revenues: Charges for services $ 6,296,917 $ 6,582,071 $ 14,857,885 $ 14,983,246 $ 21,154,802 $ 21,565,317 Operating grants and contributions 31,297 1,274,449 589,693 926,115 620,990 2,200,564 Capital grants and contributions 5,691,969 5,131,068 4,907,862 1,483,528 10,599,831 6,614,596 General Revenues: Property taxes 5,869,671 5,487,217 - - 5,869,671 5,487,217 Utility taxes 4,510,783 4,212,706 4,510,783 4,212,706 Business tax receipts 112,450 122,362 112,450 122,362 Intergovernmental-unrestricted 3,858,262 4,036,045 - - 3,858,262 4,036,045 Investment income and miscellaneous 1,046,551 1,244,035 690,966 825,339 1,737,517 2,069,374 Total revenues 27,417,900 28,089,953 21,046,406 18,218,228 48,464,306 46,308,181 Expenses: General government 7,663,967 7,052,183 - - 7,663,967 7,052,183 Public safety 5,278,449 6,891,732 5,278,449 6,891,732 Physical environment 6,677,419 6,562,502 6,677,419 6,562,502 Culture and recreation 2,826,528 2,282,091 2,826,528 2,282,091 Interest and other fiscal charges on long-term debt 603,264 673,202 - - 603,264 673,202 Water and sewer - - 10,051,311 8,568,757 10,051,311 8,568,757 Development services 1,129,984 647,180 1,129,984 647,180 Stormwater - - 1,759,171 2,320,948 1,759,171 2,320,948 Total expenses 23,049,627 23,461,710 12,940,466 11,536,885 35,990,093 34,998,595 Increase(Decrease)In Net Position Before Transfers 4,368,273 4,628,243 8,105,940 6,681,343 12,474,213 11,309,586 Transfers (93,477) 1,697,299 93,477 (1,697,299) - - Increase In Net Position 4,274,796 6,325,542 8,199,417 4,984,044 12,474,213 11,309,586 Net position,October 1 76,405,983 70,080,441 44,522,816 39,538,772 120,928,799 109,619,213 Net position,September 30 $ 80,680,779 $ 76,405,983 $ 52,722,233 $ 44,522,816 $ 133,403,012 $ 120,928,799 Page 18 26 City of Winter Springs, Florida Management's Discussion and Analysis Governmental Program Specific Revenues and Expenses 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 — 5,000,000 4,000,000 Revenues 3,000,000 Expenses 2,000,000 1,000,000 0 General Public Safety Physical Culture & Interest on Government Environment Recreation Long-Term Debt Governmental Revenues by Source Investment Income and Miscellaneous 4% Charges for Services Taxes 23% 38% Capital and Operating Grants and Contributions 21% Intergovernmental Revenues 14% Page 9 27 City of Winter Springs, Florida Management's Discussion and Analysis Business-type Activities Revenues and Expenses 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 ■ Revenues ■ Expenses 6,000,000 4,000,000 2,000,000 16:� 0 Water and Sewer Development Services Stormwater Business-type Activities Revenues by Source Investment Income and Miscellaneous Capital and 3% Operating Grants and Contri buti ons 26% Charges for Services 71% Page 110 28 City of Winter Springs, Florida 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' governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Winter Springs'financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of September 30, 2020, the City of Winter Springs' governmental funds reported combined ending fund balances of $38,408,217, an increase of$1,804,582 over the prior year. Approximately 22% or$8,560,892 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 $8,597,379, while total fund balance was $8,935,394. 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 58% and 60% respectively, of total General Fund expenditures. The increase in fund balance of$237,283 is primarily the result of increased taxes and reduced capital outlay. The Road Improvements Fund balance increased $1,074,289 due to the deferral of budgeted capital projects. The Solid Waste Fund net position decreased by$266,454. This decrease is primarily due to increased collection costs. 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 position of the Water and Sewer Utility Fund at the end of the year amounted to $17,024,692 and total net position increased$5,107,501 to$36,751,107. The increase in net position in fiscal year 2020 is more than the prior fiscal year's increase primarily due to increased consumption and contributed capital assets. The Development Services Fund net position increased as a result of current year activities by$1,144,058 to$6,371,018 at the end of the fiscal year. The increase in net position is less than the prior fiscal year's increase due to reduced development activity caused by the COVID-19 pandemic. The Stormwater Utility Fund net position increased as a result of current fiscal year activities by$1,947,858 to$9,600,108 at the end of the fiscal year. This increase in net position is due to capital contributions and a decrease in repair and maintenance costs. General Fund Budgetary Highlights Differences between the original General Fund budget and the final amended General Fund budget resulted in a minor decrease of$7,240 in appropriation to fund balance. Page 111 29 City of Winter Springs, Florida Management's Discussion and Analysis The actual results of General Fund for the year show an appropriation to fund balance of$237,283 compared to a final budgeted appropriation to fund balance of $129,695. The favorable variance of $107,588 is comprised of a favorable revenues and expenditure variance, as well as an unfavorable transfers variance. The favorable expenditure variance of$149,422 is displayed in the departmental cost centers below: General Government $ 92,234 Public Safety 1,314 Physical Environment 5,625 Culture&Recreation 50,249 Total $ 149,422 This favorable variance is represented by the following expenditure categories as both amounts and percentage of budget: Payroll $ (23,796) -0.1% Other Operating 213,581 1.4% Capital (40,363) -0.3% Total $ 149,422 1.0% Although payroll reflects a slight negative variance it should be noted that this was due to payroll budget transfers and movement of employees between cost centers. Total payroll costs did not exceed that which was originally budgeted and was more than offset by favorable variances within the respective departmental cost centers as reflected above. The comparison of budgeted results to actual results for the General Fund is shown on pages 22. 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, 2020, amounts to $99,597,229 (net of accumulated depreciation), for an increase of $3,549,822 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 3.70%(a 1.24%increase for governmental activities,and a 7.5%increase for business-type activities). THIS SECTION INTENTIONALLY LEFT BLANK Page 112 30 City of Winter Springs, Florida Management's Discussion and Analysis Major capital asset events during the current fiscal year included the following: • The purchase of the following capital assets: • Agenda Management Software at a cost of approximately$14,700 • Decontamination system at a cost of approximately$15,600 • ProjectDox ePlan Solution Software at a cost of approximately$17,800 • Police Department fire alarm system upgrade at a cost of approximately$24,500 • DocuSign Enterprise Pro Software at a cost of approximately$37,400 • New vehicles for the Utility, Community Development and Development Services departments at a total cost of approximately$79,600 • New generator and AC upgrades for the Senior Center at a total cost of approximately$140,700 • New equipment for the Public Works/Utilities departments at a cost of approximately$569,950 • The completion and capitalization of the following projects: • Central Winds Park stage at a cost of approximately$75,200(approximately$57,270 spent in prior years) • Central Winds Park storage bin design and installation at a cost of approximately$58,400 • Community Garden at a cost of approximately$5,200 • Torcaso Park upgrades and renovations to the playground, splash pad, basketball court, and restrooms at a total cost of approximately$501,700(approximately$242,380 spent in prior years) • Police Department breakroom remodel at a cost of approximately$19,600(spent in prior year) • Trotwood Park upgrades and renovations to the playground and fitness zone at a total cost of $405,300 (approximately$161,450 spent in prior years) • Trotwood Park family pavilion pier design and installation at a cost of approximately$92,860 • City Hall breakroom remodel, carpet renovation, and upgrades to the conference room and East restroom at a total cost of approximately$136,140 (approximately$100,700 spent in prior year) • City Hall carpet renovation at a cost of approximately$57,560(spent in prior year) • Senior Center carpet and front lobby restroom renovations at a cost of approximately $23,720 (approximately $6,650 spent in prior year) • Road reconstruction and resurfacing at a total cost of approximately$1,526,180 • East Waste Water Treatment Plan facility improvements and filtration rehabilitation at a total cost of approximately $10,800 • Replacement and upgrades to bypass pumps for the Water & Sewer / Utility departments at a cost of approximately$305,300 • The capitalization of donated assets as a result of new residential and commercial building projects including: • Northern Oaks Subdivision additions to the water and sanitary system infrastructure at a value of approximately $469,038 • Tuskawilla Crossings - Phase 1 additions to the water, sanitary, and storm system infrastructure at a value of approximately$3,141,160 • Tuskawilla Crossings - Phase 2 additions to the water, sanitary, and storm system infrastructure at a value of approximately$735,840 • Beginning and continued construction on the following projects: • Torcaso park site improvement at an approximate cost of $203,570(approximately$16,400 spent in prior years) • Ranchland Park site improvements and upgrades at an approximate cost of$28,150 • Town Center parking area improvements at an approximate cost of$488,280 (approximately $31,480 spent in prior years) • Water Treatment Plants equipment evaluations, upgrades, and power reliability enhancements at an approximate cost of$276,420 Additional information on the City of Winter Springs'capital assets can be found in Note 6 on pages 44-45 of this report. Page 113 31 City of Winter Springs, Florida Management's Discussion and Analysis Capital Assets(Net of Depreciation)as of September 30 Governmental Activities Business-type Activities Total Primary Government 2020 2019 2020 2019 2020 2019 Land $ 9,897,945 $ 9,946,795 $ 7,170,177 $ 7,170,177 $ 17,068,122 $ 17,116,972 Buildings 7,620,095 8,000,031 1,431,227 1,499,724 9,051,322 9,499,755 Improvements Other Than Buildings 6,897,019 7,071,144 25,458,364 23,081,399 32,355,383 30,152,543 Machinery and Equipment 3,030,911 2,529,024 5,537,738 5,483,161 8,568,649 8,012,185 Intangibles 114,855 570,333 154,757 154,499 269,612 724,832 Infrastructure 30,102,665 28,808,753 - - 30,102,665 28,808,753 Construction in Progress 1,458,586 1,471,073 722,890 261,294 2,181,476 1,732,367 Total $ 59,122,076 $ 58,397,153 $ 40,475,153 $ 37,650,254 $ 99,597,229 $ 96,047,407 Long-term debt At September 30, 2020, the City of Winter Springs had total debt outstanding of$32,132,873, a decrease of$2,071,359 from $34,204,232 at September 30, 2019. Total bonded debt of the City at the end of the current fiscal year was$6,875,280. This amount does not include accreted interest of$14,759,843. The City of Winter Springs'bonded debt represents bonds and notes are secured solely by specified revenue sources. 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. THIS SECTION INTENTIONALLY LEFT BLANK Page 114 32 City of Winter Springs, Florida Management's Discussion and Analysis Additional information on the City of Winter Springs'long-term debt can be found in Note 7 on pages 46-49 of this report. Long Term Debt as of September 30 Governmental Activities Business-type Activities Total Primary Government 2020 2019 2020 2019 2020 2019 Improvement Refunding Revenue Bonds,Series 1999 $ 3,081,089 $ 3,498,970 $ - $ - $ 3,081,089 $ 3,498,970 Water&Sewer Refunding Revenue Bonds,Series 2000 - - 3,794,191 3,794,191 3,794,191 3,794,191 Special Assessment Revenue Notes, Series 2011 1,128,333 1,225,395 1,128,333 1,225,395 Revenue Refunding Note Series 2016 - - 1,167,000 2,715,000 1,167,000 2,715,000 Revenue Refunding Note Series 2018 1,894,000 1,924,000 1,894,000 1,924,000 State Revolving Fund Loans - - 6,308,417 6,669,199 6,308,417 6,669,199 Accreted Interest Payable 6,686,253 6,979,057 8,073,590 7,398,420 14,759,843 14,377,477 Total $ 10,895,675 $ 11,703,422 $ 21,237,198 $ 22,500,810 $ 32,132,873 $ 34,204,232 The above information does not include the interfund loan balances related to the repayment of the general obligation note. Economic Factors and Next Year's Budgets and Rates Through conservative fiscal policies and aggressive budget oversight, the City Manager and City Commission maintained the operating millage rate at 2.4300 for FY2020 and reduced the operating millage for FY2021 to 2.4100.The voted debt millage rate was eliminated for FY2020. The gross property tax values in Winter Springs increased in FY2020 by 9.4% and have increased an approximate 7.9% in FY2021. In May 2014, a countywide precinct referendum resulted in an additional 1%local government infrastructure sales surtax, which will largely be utilized for transportation related to infrastructure improvements. The surtax is expected to result in$2.0 million in additional revenues each year and expires in 2024. The General Funds's FY2020 adopted expenditure budget of$19,101,792 (inclusive of transfers) marked an increase of 2.8% from the previous year. For FY2021 the adopted expenditure budget is$18,143,551, a slight decrease of 5%from FY2020. The total combined expenditure budget of FY 2021 $51,095,990 (inclusive of transfers) is $374,076 or .8% less than the adopted budget of FY2020. 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 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 www.wintersprin,qsfi.org. Page 115 33 Basic Financial Statements 34 This page intentionally left blank. Xt4TZR o` s� .01x Incorporated 1959 0©WE 35 Government-Wide Financial Statements 36 City of Winter Springs, Florida Statement of Net Position September 30, 2020 Governmental Business-type Activities Activities Total Assets Cash and cash equivalents $ 2,979,600 $ 2,717,363 $ 5,696,963 Investments 36,858,210 32,679,776 69,537,986 Receivables,net 178,730 537,166 715,896 Inventories,at cost 30,664 15,600 46,264 Prepaid costs 263,384 5,780 269,164 Restricted Assets: Cash and cash equivalents 88,934 746,540 835,474 Receivables,long-term 1,068,334 - 1,068,334 Capital Assets Capital assets not being depreciated 11,356,531 7,893,067 19,249,598 Capital assets being depreciated,net of accumulated depreciation 47,765,545 32,582,086 80,347,631 Total assets 100,589,932 77,177,378 177,767,310 Deferred Outflows of Resources Deferred charge on refunding 9,289 73,829 83,118 Deferred outflow of pension and OPEB 903,153 247,794 1,150,947 912,442 321,623 1,234,065 Liabilities Accounts payable and accrued expenses 1,735,178 910,864 2,646,042 Due to other governments 68,638 - 68,638 Unearned revenue 100,391 - 100,391 Accrued interest payable 18,335 59,525 77,860 Liabilities payable from restricted assets 86,344 664,554 750,898 Noncurrent Liabilities: Due within one year 1,482,606 1,381,381 2,863,987 Due in more than one year 17,133,539 21,683,057 38,816,596 Total liabilities 20,625,031 24,699,381 45,324,412 Deferred Inflows of Resources Deferred inflows of pension and OPEB 196,564 77,387 273,951 196,564 77,387 273,951 Net Position Net investment in capital assets 54,921,943 27,385,374 82,307,317 Restricted for: Capital projects 5,987,779 - 5,987,779 Debt service 60,069 - 60,069 Renewal and replacement - 647,207 647,207 Physical environment 11,888,261 - 11,888,261 Public safety 74,668 - 74,668 Unrestricted 7,748,059 24,689,652 32,437,711 Total net position $ 80,680,779 $ 52,722,233 $ 133,403,012 The accompanying Notes to Financial Statements are an integral part of these statements. Page 116 37 co M O G 0 Lc) V V V O V O O N N co c0 V M (A t` W Lf) M W ()) C F O � O V N V c') O [0 r- V C\! Lf) ccN P- O p LO CO _ V M M 7 a0 N V 7 O O_ N c0 r— 00 7 W co (0 N O N 7 LO c0 LO M c0 r— N O • O M CO O ocO Ln V O cclC7 CI r- O 7 O 7 p .L(�. .L(�. N .N. I.- M LO co CO N O M IL N M N Z y ..+ a) d y ' ' ' ' ' ' O V O V V ' ' ' ' O � M O MM c a :: R cn CA Ln m CO I— V V Cl) m 6) ()) O V 00 N y •� V CO N V V O M V O N N Cq LO oc O LL V V COO O Cb 6) LLc ti c c N Il- N V LCV LO y dm > d a d cnLiz c0 L() V V ' ' ' ' V CO O N I� O co M O y w O N NCC) c0 V I� 07 LO (0 LO I— O M ti c C O t` O N V c0 ti N Lf) V N f� O ti d7 E .� U') CO V M M m m O_ N CC) c0 M V 7 f) O L C' (O N O N N c0 Lf) V O) O I— O 00 K c c") O M c0 O (= M Lf) CI O M N V (0 lJJ a7 Q Ln Lf) N N LO co L27 O O > � 00 O Z � co O O ' O ' N L9 O M � C:, � � 000 CC) y 7 LO M O co ID O c L N cc N co O O Lp N M C0 M Ln ()) Lf) C.7 O Cc7 Lf7 M V O p � U .Q Lv U 61> IV> w y c o m rn Cl) rn m y i N N O c0 O > j Q) O O Q1 L co Cl) co 00 N .L LO Lf) (0 E c = ` m U6 a) o a-a d m f i a) E w V ti m N M O � M 00U') O Z3 C T y O M Lf) O ococO LL y N I— O m 0) CO V co 7I- V C L a) o O CS) ti O) I' M K) Ln ca ' L N co co N V a) en U O O A-- 0 m c O c Im c c rfl v3 ca Q m > Q a0 c E CL y _ s v co CT O co V ti 00 M CO O N � O C c c _ a V V L N cc co cr V to O c (v X E ,� C a) co c0 I— O co 0) (T O O O N X U 6 C y N y 0 — a 9 ti f` N O V CC) N LO V O N 6/ 01 O O �( O N co c0 co O O r- O O a X y N a) lJ.l I` Cf) C0 N M O N L() 'C +6 N >O y cc a a C6 N Mt6 Q .O Z5a) O L d G122) y O = w a) > N F U Z Z (o d mcn 1.1> 1 O E N O co N ( O M U f6 y C E d L L O � 'j LL- LL Q a) vl a) Z E Ln N d L4 m C a) •+ N of p CL > y 0 c rn w > Z -6 y a) C N E y a) U O 0) CL ua) [6 01 U) Q L j R c v E o a`U) c v c O p E Q Zu o > Q a) y ca CL C r a p 01 m wm O aT E a E d C7 a) Ln M .N a) O y a`) a) °J ~ c «5 aa) o ~ ~ a) o c > c� a a U m Cl U) U V) LL. Li a` C7 m This page intentionally left blank. Xt4TZR o` s� .01x Incorporated 1959 0©WE 39 Fund Financial Statements 40 City of Winter Springs, Florida Balance Sheet Governmental Funds September 30,2020 Special Revenue Road Other Total Improvements Solid Waste I Governmental Governmental General Fund Fund Recycling Funds Funds Assets: Cash and cash equivalents $ 701,256 $ 776,650 $ 153,425 $ 1,348,269 $ 2,979,600 Investments 9,457,208 9,340,551 1,845,201 16,215,250 36,858,210 Receivables, net 43,144 754 134,832 - 178,730 Inventories,at cost 30,664 - - - 30,664 Prepaids 261,994 - - 1,390 263,384 Special assessments receivable - - - 1,068,334 1,068,334 Advances to other funds 45,357 - - - 45,357 Restricted assets: Cash and cash equivalents 86,344 - - 2,590 88,934 Total assets $ 10,625,967 $ 10,117,955 $ 2,133,458 $ 18,635,833 $ 41,513,213 Liabilities and Fund Balances: Accounts payable $ 579,608 $ 108 $ 234,825 $ 65,045 $ 879,586 Accrued liabilities 854,796 - - - 854,796 Unearned revenue 100,391 - - - 100,391 Retainage payable 796 - - - 796 Due to other funds - - - 45,357 45,357 Due to other governments 68,638 - - - 68,638 Payable from restricted assets 86,344 - - - 86,344 Total liabilities 1,690,573 108 234,825 110,402 2,035,908 Deferred Inflows of Resources Unavailable revenue-county taxes - 754 - - 754 Unavailable revenue-special assessments - - - 1,068,334 1,068,334 Total deferred inflows of resources - 754 - 1,068,334 1,069,088 Fund Balances: Nonspendable 338,015 - - 1,390 339,405 Restricted - 10,117,093 - 7,892,930 18,010,023 Committed - - 660,945 1,240,354 1,901,299 Assigned - - 1,237,688 8,358,910 9,596,598 Unassigned 8,597,379 - - (36,487) 8,560,892 Total fund balances 8,935,394 10,117,093 1,898,633 17,457,097 38,408,217 Total liabilities,deferred inflows of resources and fund balances $ 10,625,967 $ 10,117,955 $ 2,133,458 $ 18,635,833 $ 41,513,213 The accompanying Notes to Financial Statements are an integral part of these statements. Page 118 41 City of Winter Springs, Florida Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position September 30,2020 Total Fund Balance,governmental funds $ 38,408,217 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds. 59,122,076 Other long-term assets are not available to pay for current period expenditures and, therefore,are deferred in the funds. 1,069,088 Deferred inflows and outflows of resources related to pension earnings are not recognized in the governmental funds, however, they are recorded in net position under full accrual accounting 706,589 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. (12,537,464) Net pension liabilities are not due and payable in the current period and therefore, are not reported in the funds (6,087,727) Net Position of Governmental Activities in the Statement of Net Position $ 80,680,779 The accompanying Notes to Financial Statements are an integral part of these statements. Page 19 42 City of Winter Springs, Florida Statement of Revenues,Expenditures,and Changes in Fund Balances Governmental Funds Year Ended September 30,2020 Special Revenue Road Other Total Improvements Solid Waste I Governmental Governmental General Fund Fund Recycling Funds Funds Revenues: Taxes: Property taxes $ 5,869,644 $ - $ - $ 27 $ 5,869,671 Utility taxes 4,510,783 - - - 4,510,783 Business tax receipts 112,450 - - - 112,450 Permits and fees 2,395,505 - - 2,320 2,397,825 Intergovernmental revenues 3,826,963 2,271,433 87,211 562,250 6,747,857 Charges for services 594,695 - 2,572,661 44,225 3,211,581 Fines and forfeitures 76,546 - - 32,556 109,102 Impact fees/assessments - - - 1,348,358 1,348,358 Investment income 276,061 208,395 34,961 393,166 912,583 Miscellaneous 130,143 - - 3,825 133,968 Total revenues 17,792,790 2,479,828 2,694,833 2,386,727 25,354,178 Expenditures: Current: General government 4,699,790 - - 11,028 4,710,818 Public safety 6,493,065 - - 29,954 6,523,019 Physical environment 1,040,078 - 2,961,287 1,250,262 5,251,627 Culture and recreation 1,964,813 - - - 1,964,813 Debt Service: Principal - - - 514,943 514,943 Interest and fiscal charges - - - 896,717 896,717 Capital Outlay: General government 69,410 - - 65,395 134,805 Public safety 68,464 - - - 68,464 Physical environment 127,882 1,405,539 - 828,893 2,362,314 Culture and recreation 408,528 - - 620,071 1,028,599 Total expenditures 14,872,030 1,405,539 2,961,287 4,217,263 23,456,119 Excess(Deficiency)of Revenues Over Expenditures 2,920,760 1,074,289 (266,454) (1,830,536) 1,898,059 Other Financing Sources(Uses) Transfers in 546,523 - - 3,515,201 4,061,724 Transfers out (3,230,000) - - (925,201) (4,155,201) Total other financing sources(uses) (2,683,477) - - 2,590,000 (93,477) Net Change in Fund Balances 237,283 1,074,289 (266,454) 759,464 1,804,582 Fund balances,beginning 8,698,111 9,042,804 2,165,087 16,697,633 36,603,635 Fund balances,ending $ 8,935,394 $ 10,117,093 $ 1,898,633 $ 17,457,097 $ 38,408,217 The accompanying Notes to Financial Statements are an integral part of these statements. Page 120 43 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 Year Ended September 30,2020 Net Change in Fund Balances-total governmental funds: $ 1,804,582 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. (921,889) The net effect of various miscellaneous transactions involving capital assets(i.e.sales,trade-ins and disposals)is to decrease net position. (513,972) Contributions of capital assets are not reported as revenues in the governmental funds. 2,160,784 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 position. Also, governmental funds report the effect of 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 Iona-term debt and related items. 514,943 The payment of accreted interest that was recognized in a prior year is not reported as an expense on the statement of activities. 857,119 Special assessment revenue reported in the funds must be eliminated from the statement of activities since revenue was recognized in a prior year. (97,062) Cash pension contributions reported in the funds were less than the calculated pension expense on the statement of activities,and therefore decreased net position. 1,062,862 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. (592,571) Change in net position of governmental activities $ 4,274,796 The accompanying Notes to Financial Statements are an integral part of these statements. Page 21 44 City of Winter Springs, Florida General Fund Statement of Revenues,Expenditures,and Changes in Fund Balance-Budget and Actual Year Ended September 30,2020 Variance with Final Budget- Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Taxes: Property Taxes $ 5,873,221 $ 5,873,221 $ 5,869,644 $ (3,577) Utility taxes 4,043,000 4,514,090 4,510,783 (3,307) Business tax receipts 100,000 111,800 112,450 650 Permits and fees 2,303,990 2,395,310 2,395,505 195 Intergovernmental revenues 3,994,992 3,806,172 3,826,963 20,791 Charges for services 676,354 573,304 594,695 21,391 Fines and forfeitures 115,200 75,200 76,546 1,346 Investment income 150,000 273,500 276,061 2,561 Miscellaneous 70,001 131,161 130,143 (1,018) Total revenues 17,326,758 17,753,758 17,792,790 39,032 Expenditures: Current: General government 6,885,435 4,861,434 4,769,200 92,234 Public safety 7,205,604 6,562,843 6,561,529 1,314 Physical environment 1,333,620 1,173,585 1,167,960 5,625 Culture and recreation 2,387,133 2,423,590 2,373,341 50,249 Total expenditures 17,811,792 15,021,452 14,872,030 149,422 Excess(deficiency)of revenues over expenditures (485,034) 2,732,306 2,920,760 188,454 Other Financing Sources(Uses): Transfers in 1,912,149 627,389 546,523 (80,866) Transfers out (1,290,000) (3,230,000) (3,230,000) - Netotherfinancingsources 622,149 (2,602,611) (2,683,477) (80,866) Net change in fund balances 137,115 129,695 237,283 107,588 Fund balances, beginning 8,698,111 8,698,111 8,698,111 - Fund balances,ending $ 8,835,226 $ 8,827,806 $ 8,935,394 $ 107,588 The accompanying Notes to Financial Statements are an integral part of these statements. Page 122 45 City of Winter Springs, Florida Road Improvements Special Revenue Fund Statement of Revenues,Expenditures,and Changes in Fund Balance-Budget and Actual Year Ended September 30,2020 Variance with Final Budget- Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Intergovernmental revenues $ 2,317,500 $ 1,950,000 $ 2,271,433 $ 321,433 Investment income 115,000 115,000 208,395 93,395 Total revenues 2,432,500 2,065,000 2,479,828 414,828 Expenditures: Current: Physical environment 25,000 14,500 - 14,500 Capital Outlay: Physical environment 775,000 1,555,500 1,405,539 149,961 Total expenditures 800,000 1,570,000 1,405,539 164,461 Excess(deficiency)of revenues over expenditures 1,632,500 495,000 1,074,289 579,289 Other financing sources(uses) Transfers out (3,212,000) - - - Total other financing sources(uses) (3,212,000) - - - Net Change in Fund Balances (1,579,500) 495,000 1,074,289 579,289 Fund balances, beginning 9,042,804 9,042,804 9,042,804 - Fund balances,ending $ 7,463,304 $ 9,537,804 $ 10,117,093 $ 579,289 The accompanying Notes to Financial Statements are an integral part of these statements. Page 123 46 City of Winter Springs, Florida Solid Waste/Recycling Special Revenue Fund Statement of Revenues,Expenditures,and Changes in Fund Balance-Budget and Actual Year Ended September 30,2020 Variance with Final Budget- Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Intergovernmental revenues $ 48,780 $ 87,082 $ 87,211 $ 129 Charges for services 2,547,410 2,580,717 2,572,661 (8,056) Investment income 18,500 34,606 34,961 355 Total revenues 2,614,690 2,702,405 2,694,833 (7,572) Expenditures: Current; Physical environment 2,831,721 2,962,111 2,961,287 824 Total expenditures 2,831,721 2,962,111 2,961,287 824 Excess(Deficiency)of Revenues Over Expenditures (217,031) (259,706) (266,454) (6,748) Other Financing Sources(Uses) Transfers out (24,315) - - - Total other financing sources(uses) (24,315) - -Net Change in Fund Balances (241,346) (259,706) (266,454) (6,748) Fund balances, beginning 2,165,087 2,165,087 2,165,087 - Fund balances,ending $ 1,923,741 $ 1,905,381 $ 1,898,633 $ (6,748) The accompanying Notes to Financial Statements are an integral part of these statements. Page 24 47 This page intentionally left blank. Xt4TZR o` s� .01x Incorporated 1959 0©WE 48 City of Winter Springs, Florida Statement of Net Position Proprietary Funds September 30,2020 Business-type Activities-Enterprise Funds Water and Sewer Development Stormwater Utility Utility Fund Services Fund Fund Total Assets Current Assets: Cash and cash equivalents $ 2,085,423 $ 500,502 $ 131,438 $ 2,717,363 Investments 25,080,804 6,018,201 1,580,771 32,679,776 Receivables,net 486,688 - 50,478 537,166 Inventories 15,600 - 15,600 Prepaid expense 5,780 - 5,780 Total current assets 27,674,295 6,518,703 1,762,687 35,955,685 Noncurrent Assets: Restricted investments 746,540 - - 746,540 Capital Assets: Land,buildings and equipment 75,504,172 388,715 14,709,145 90,602,032 Construction in progress 604,273 - 118,617 722,890 Less Accumulated depreciation (43,939,458) (182,080) (6,728,231) (50,849,769) Total capital assets(net of accumulated depreciation) 32,168,987 206,635 8,099,531 40,475,153 Total noncurrent assets 32,915,527 206,635 8,099,531 41,221,693 Total assets 60,589,822 6,725,338 9,862,218 77,177,378 Deferred Outflows of Resources Deferred charge on refunding 73,829 - - 73,829 Deferred outflow pension and OPEB 193,055 19,588 35,151 247,794 Total deferred outflows of resources 266,884 19,588 35,151 321,623 The accompanying Notes to Financial Statements are an integral part of these statements. Page 125 49 Business-type Activities-Enterprise Funds Water and Sewer Development Stormwater Utility Utility Fund Services Fund Fund Total Liabilities Current Liabilities: Accounts payable 471,893 177,300 19,133 668,326 Accrued liabilities 179,462 34,508 28,568 242,538 Compensated absences-current 9,233 1,077 2,053 12,363 Customer deposits payable 664,554 - - 664,554 Notes payable-current 1,369,018 1,369,018 Accrued interest payable 59,525 - - 59,525 Total current liabilities 2,753,685 212,885 49,754 3,016,324 Noncurrent Liabilities: Notes payable 8,000,399 - - 8,000,399 Revenue bonds payable 3,794,191 3,794,191 Accreted interest payable 8,073,590 - - 8,073,590 Compensated absences 36,932 4,308 8,210 49,450 Other noncurrent liabilities 320,975 25,340 76,020 422,335 Net pension liability 1,067,013 126,732 149,347 1,343,092 Total noncurrent liabilities 21,293,100 156,380 233,577 21,683,057 Total liabilities 24,046,785 369,265 283,331 24,699,381 Deferred Inflows of Resources Deferred inflow pension and OPEB 58,814 4,643 13,930 77,387 Total deferred outflows of resources 58,814 4,643 13,930 77,387 Net Position Net investment in capital assets 19,079,208 206,635 8,099,531 27,385,374 Restricted for renewal and replacement 647,207 - - 647,207 Unrestricted 17,024,692 6,164,383 1,500,577 24,689,652 Total net position $ 36,751,107 $ 6,371,018 $ 9,600,108 $ 52,722,233 The accompanying Notes to Financial Statements are an integral part of these statements. Page 126 50 This page intentionally left blank. Xt4TZR o` s� .01x Incorporated 1959 0©WE 51 City of Winter Springs,Florida Statement of Revenues,Expenses,and Changes in Fund Net Position Proprietary Funds Year Ended September 30,2020 Business-type Activities-Enterprise Funds Water and Sewer Development Stormwater Utility Utility Fund Services Fund Fund Total Operating Revenues: User charges $ 11,574,770 $ 2,148,478 $ 1,105,303 $ 14,828,551 Other revenue - - 29,334 29,334 Total operating revenues 11,574,770 2,148,478 1,134,637 14,857,885 Operating Expenses: Salaries and benefits 1,445,959 437,740 433,234 2,316,933 Materials and supplies 671,679 14,331 724,835 1,410,845 Depreciation and amortization 2,628,144 42,406 354,408 3,024,958 Other operating expenses 4,395,120 635,507 246,694 5,277,321 Total Operating Expenses 9,140,902 1,129,984 1,759,171 12,030,057 Operating income(loss) 2,433,868 1,018,494 (624,534) 2,827,828 Nonoperating Revenue(Expenses): Investment income 559,894 125,564 5,508 690,966 Interest expense (235,238) - - (235,238) Accreted interest expense (675,171) - (675,171) Operating grants - 589,693 589,693 Total nonoperating revenue(expenses) (350,515) 125,564 595,201 370,250 Income(loss)before contributions and transfers 2,083,353 1,144,058 (29,333) 3,198,078 Capital Contributions: Connection fees 559,321 - - 559,321 Capital contribution 2,761,350 1,587,191 4,348,541 Transfers In 250,000 390,000 640,000 Transfers Out (546,523) - (546,523) Change in net position 5,107,501 1,144,058 1,947,858 8,199,417 Net position,beginning 31,643,606 5,226,960 7,652,250 44,522,816 Net position,ending $ 36,751,107 $ 6,371,018 $ 9,600,108 $ 52,722,233 The accompanying Notes to Financial Statements are an integral part of these statements. Page 27 52 City of Winter Springs, Florida Statement of Cash Flows Proprietary Funds Year Ended September 30, 2020 Business-type Activities-Enterprise Funds Water and Sewer Development Stormwater Utility Fund Services Fund Utility Fund Total Cash Flows from Operating Activities: Receipts from customers $ 11,455,881 $ 2,148,478 $ 1,003,289 $ 14,607,648 Payments to suppliers (4,854,231) (540,524) (1,502,619) (6,897,374) Payments to employees (1,682,569) (448,941) (457,693) (2,589,203) Net cash provided(used)by operating activities 4,919,081 1,159,013 (957,023) 5,121,071 Cash Flows from Noncapital Financing Activities: Transfers in 250,000 - 390,000 640,000 Transfers out (546,523) - (546,523) Grants 1,334,661 1,334,661 Net cash provided(used)by noncapital financing activities (296,523) 1,724,661 1,428,138 Cash Flows from Capital and Related Financing Activities: Acquisition of capital assets (1,410,489) (84,842) (5,985) (1,501,316) Principal paid (1,938,782) (1,938,782) Interest paid (156,803) (156,803) Connection fees 559,321 559,321 Net cash provided(used)by capital and related financing activities (2,946,753) (84,842) (5,985) (3,037,580) Cash Flows from Investing Activities: Sale(purchase)of investments (1,941,427) (1,081,403) (703,609) (3,726,439) Investment income 559,894 125,564 5,508 690,966 Net cash provided(used)by investing activities (1,381,533) (955,839) (698,101) (3,035,473) Net Increase(Decrease)in Cash and Cash Equivalents 294,272 118,332 63,552 476,156 Cash and cash equivalents,beginning 1,791,151 382,170 67,886 2,241,207 Cash and cash equivalents,end $ 2,085,423 $ 500,502 $ 131,438 $ 2,717,363 The accompanying Notes to Financial Statements are an integral part of these statements. Page 128 53 Business-type Activities-Enterprise Funds Water and Sewer Development Stormwater Utility Fund Services Fund Utility Fund Total Reconciliation of Operating Income(Loss)to Net Cash Provided by Operating Activities Operating income(loss) $ 2,433,868 $ 1,018,494 $ (624,534) $ 2,827,828 Adjustments Not Affecting Cash: Depreciation and amortization 2,628,144 42,406 354,408 3,024,958 Change in Assets and Liabilities: Decrease(increase)in accounts receivable (121,274) - (5,453) (126,727) Decrease(increase)in inventories (1,742) - (1,742) Decrease(increase)in deferred outflows (6,825) (463) (4,555) (11,843) Increase(decrease)in accounts payable 214,310 109,314 (531,090) (207,466) Increase(decrease)in accrued liabilities (9,519) 13,336 1,414 5,231 Increase(decrease)in customer deposits 2,385 - - 2,385 Increase(decrease)in unearned revenue - (125,895) (125,895) Increase(decrease)in accrued compensated absences (17,613) (7,939) (205) (25,757) Increase(decrease)in deferred inflows 38,213 2,840 9,590 50,643 Increase(decrease)in net pension liability (248,742) (19,597) (32,568) (300,907) Increase(decrease)in net OPEB liability 7,876 622 1,865 10,363 Total adjustments (142,931) 98,113 (686,897) (731,715) Net Cash Provided By Operating Activities $ 4,919,081 $ 1,159,013 $ (957,023) $ 5,121,071 Noncash Capital and Financing Activities: Contributed capital assets $ 2,761,350 $ - $ 1,587,191 $ 4,348,541 The accompanying Notes to Financial Statements are an integral part of these statements. Page 129 54 City of Winter Springs, Florida Statement of Fiduciary Net Position Fiduciary Fund September 30,2020 Defined Benefit Pension Trust Fund Assets: Cash and cash equivalents $ 515,192 Receivables: Employee contributions 24,638 Employer contributions 611,054 Total receivables 635,692 Investments,at fair value: Common funds,equity 38,703,802 Common funds, bonds 10,198,150 Other investments 8,492,153 Total Investments 57,394,105 Total assets 58,544,989 Liabilities: Accounts payable 35,123 Net Position: Net position restricted for pensions $ 58,509,866 The accompanying Notes to Financial Statements are an integral part of these statements. Page 30 55 City of Winter Springs, Florida Statement of Changes in Fiduciary Net Position Fiduciary Fund Year Ended September 30,2020 Defined Benefit Pension Trust Fund Additions: Contributions: Employer $ 3,223,305 Plan Members 208,596 Total contributions 3,431,901 Investment Income: Net increase in fair value of investments 3,741,524 Interest 793,551 Investment-related expenses (316,197) Net investment income 4,218,878 Total additions 7,650,779 Deductions: Benefits 3,821,626 Administrative expenses 32,984 Total deductions 3,854,610 Change in net position 3,796,169 Net position, beginning 54,713,697 Net position,ending $ 58,509,866 The accompanying Notes to Financial Statements are an integral part of these statements. Page 31 56 This page intentionally left blank. Xt4TZR o` s� .01x Incorporated 1959 0©WE 57 Notes to Financial Statements 58 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The City of Winter Springs, Florida (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. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities,which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1)charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds,and fiduciary funds,even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Measurement Focus,Basis of Accounting,and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Page 132 59 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period.All other revenue items are considered to be measurable and available only when cash is received by the City. The government reports the following funds: Major Governmental Funds General Fund- is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Road Improvements Special Revenue Fund - accounts for collected one-cent sales tax revenues restricted for use for transportation,safety,capacity and infrastructure consistent with 212.055, F.S. Solid Waste/Recycling Special Revenue Fund-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. Nonmajor Governmental Fund Types Special Revenue Funds - 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. Debt Service Funds-account for the accumulation of resources for and the payment of principal and interest on certain general governmental obligations. Capital Projects Funds-account for financial resources segregated for the acquisition or construction of major capital facilities. Major Proprietary Funds Water and Sewer Utility Fund - 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. Development Services Fund- 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. Stormwater Utility Fund- 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. Page 133 60 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) Fiduciary Fund The Pension Trust Fund accounts for contributions to the defined benefit plan. As a general rule,the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are other charges between the City's water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise,general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's water, sewer 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. Assets,Liabilities, Deferred Outflows/Inflows of Resources and Net Position or Fund Balance Deposits and Investments The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of less than 2 years from the date of acquisition. Investments for the City are reported at fair value and are categorized within the fair value hierarchy established in accordance with GASB Statement No. 72, Fair Value Measurement and Application. 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 nonspendable 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. Page 134 61 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) All property is reassessed according to its fair value on the lien date, or January 1 of each year.Taxes are levied on October 1 of each year. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January, and 1% in the month of February. The taxes paid in March are without discount. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. On or around May 31 following the tax year, certificates are sold for all delinquent taxes on real property. Inventories and Prepaid Items All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. These are recorded as expenditures when consumed rather than when purchased. Restricted Assets Certain proceeds of the City's enterprise fund revenue bonds and notes, 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. 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 acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Property, plant, and equipment of the City are depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings 30 Improvements 20-50 Infrastructure 30-50 Intangible Assets 3-10 Equipment 3-10 Page 135 62 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. 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. 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 position. Bond premiums and discounts (including deep-discount or capital appreciation bonds), 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. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items that qualify for reporting in this category. The deferred charge on refunding and deferred outflows of pension and OPEB reported in the enterprise and government-wide statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price.This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources.This separate financial statement element,deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: county taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The City also has deferred inflows of pension and OPEB reported in the enterprise and government-wide statement of net position. Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's policy to consider restricted net position to have been depleted before unrestricted net position is applied. Page 136 63 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) 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. 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 a Resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the resolution remains in place until a similar action is taken (the adoption of another resolution)to remove or revise the limitation. Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet 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. The General Fund is the only fund that reports a positive unassigned fund balance. However, in other governmental funds, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. New GASB Statement Implemented In fiscal year 2020,the City implemented Government Accounting Standards Board(GASB)Statement No.89,Accounting for Interest Cost Incurred before the End of a Construction Period. This statement eliminates the requirement to capitalize interest on enterprise fund construction projects. The City also implemented GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance.This pronouncement provides temporary relief to governments and other stakeholder in light of the COVID-19 pandemic by postponing the effective dates of provisions in certain other statements.There was no effect on beginning balances of the City for the implementation of either statement. THIS SECTION INTENTIONALLY LEFT BLANK Page 137 64 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Position The governmental fund balance sheet includes a reconciliation between fund balance-total governmental funds and net position- governmental activities as reported in the government-wide statement of net position.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 difference are as follows: Bonds payable $ (3,081,089) Accreted interest payable (6,686,253) Notes payable (1,128,333) Less:deferred charge on refunding(to be amortized as interest expense) 9,289 Accrued interest payable (18,335) Other post employment benefits (1,072,732) Compensated absences (560,011) Net Adjustment to Reduce Fund Balance,total governmental funds to arrive at net position,governmental activities $ (12,537,464) Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures,and Changes in Fund Balances and the Government-Wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances - total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities.One element of that reconciliation explains that"Governmental funds report capital outlays as expenditures. However,in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense."The details of this difference are as follows: Capital Outlay $ 3,738,360 Depreciation Expense (4,660,249) Net Adjustment to Decrease Net Changes in Fund Balances,total governmental funds to arrive at changes in net position,governmental activities $ (921,889) Another element of that reconciliation states that "the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds,while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of 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 difference are as follows: Principal repayment $ 514,943 Net Adjustment to Increase Net Changes in Fund Balances,total governmental funds to arrive at changes in net position, governmental activities $ 514,943 Page 138 65 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS(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 difference are as follows: Compensated Absences $ 27,349 Amortization of Loss on Refunding (929) Accrued Interest Payable 1,578 Other Post Employment Benefits (56,254) Accreted Interest Payable (564,315) Net Adjustment to Decrease Net Changes in Fund Balance,total governmental funds to arrive at changes in net position,governmental activities $ (592,571) NOTE 3 STEWARDSHIP,COMPLIANCE,AND ACCOUNTABILITY 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. 1. On or before July 1St of each year, the City Manager submits a Proposed Budget to the City Commission for the fiscal year beginning the following October 1St.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. 3. On or before September 30th 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. 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. Deficit Fund Balance As a result of the internal loan,the Tuscawilla Phase III Special Revenue Fund has a deficit fund balance of$36,487 at September 30, 2020. Appropriations in Excess of Funds Available Appropriations for the Tuscawilla Phase III Special Revenue Fund and Central Winds GO Debt Service Fund were in excess of anticipated revenues and prior years'fund balance. Transfers Out in Excess of Appropriations Transfers out in the Excellence in Customer Service Capital Projects Fund were in excess of appropriations. Page 139 66 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 4 DEPOSITS AND INVESTMENTS Deposits 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". 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 & Poor's (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 30,2020,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 30,2020,none of the investments listed are exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form. Concentration of Credit Risk The City's investment policy requires diversification,and places limits on the percentage of funds that may be invested with an individual issuer and type of investment. Page 140 67 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 4 DEPOSITS AND INVESTMENTS(CONTINUED) 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. Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles.The fair value is the price that would be received to sell an asset,or paid to transfer a liability,in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The City uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets,liabilities,or groups of assets and liabilities. Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable, and uses significant unobservable inputs that uses the best information available under the circumstances,which may include the City's own data in measuring unobservable inputs. The City has the following recurring fair value measurements as of September 30,2020: Quoted Prices in Active Markets for Significant Other Identical Assets Observable Inputs Investments Valued by Fair Value Level Fair Value (Level 1) (Level 2) Commercial Paper $ 11,395,991 $ - $ 11,395,991 US Treasury Notes 43,259,757 43,259,757 - Municipal Credit 1,300,992 - 1,300,992 Municipal Bonds 460,814 - 460,814 Federal Agency Bonds 13,120,432 - 13,120,432 $ 69,537,986 $ 43,259,757 $ 26,278,229 Investments held by the City at September 30,2020 are detailed below. Weighted Average Investments Fair Value Credit Rating Maturity Commercial Paper $ 11,395,991 A-1 94 days US Treasury Notes 43,259,757 AA+ 291 days Municipal Credit 1,300,992 AA 600 days Municipal Bonds 460,814 SP-1+ 182 days Federal Agency Bonds 13,120,432 AA+ 650 days $ 69,537,986 Page 141 68 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 4 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. Equities traded on a national exchange 2. Fixed income investments having a minimum rating of investment grade or higher as determined by at least one major credit rating service 3. Money market fund or STIF provided by the Plan's custodian 4. Real estate limited to commingled funds 5. Alternatives 6. Foreign securities limited to fully and easily negotiable securities or commingled funds with investments in such securities 7. Commingled funds/mutual funds and exchange traded funds The investments held by the City's Pension Trust Fund at September 30,2020 are detailed below: Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Investments Fair Value (Level 1) (Level 2) (Level 3) Equity Mutual Funds $ 38,703,802 $ - $ 38,703,802 $ - Bond Mutual Funds 10,198,150 - 10,198,150 - Real Estate Investment Trusts 5,574,338 - - 5,574,338 Other Investments 2,917,815 - 2,917,815 - Total Investments 57,394,105 - 51,819,767 5,574,338 Cash and Cash Equivalents 515,192 - - - Total Cash and Investments $ 57,909,297 $ - $ 51,819,767 $ 5,574,338 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. Page 142 69 City of Winter Springs, Florida Notes to Financial Statements September 30,2020 NOTE 4 DEPOSITS AND INVESTMENTS(CONTINUED) 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, 2020, 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, 2020, there were no security investments in the Trust that were over their respective limitations. 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 5 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 Fund Receivable Accounts Net Receivable General $ 43,945 $ (801) $ 43,144 Road Improvements Special Revenue 754 - 754 Solid Waste/Recycling Special Revenue 145,396 (10,564) 134,832 Water&Sewer Utility 553,914 (67,226) 486,688 Stormwater Utility 55,938 (5,460) 50,478 $ 799,947 $ (84,051) $ 715,896 There is an amount of$754 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$1,068,334 that are not available to liquidate liabilities of the current period.These receivables are reported as deferred inflows of resources in the governmental funds balance sheet. Page 143 70