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HERNANDO COUNTY, FLORIDACOMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDEDSEPTEMBER 30, 2016
PRINCIPAL OFFICIALSas of September 30, 2016
BOARD OF COUNTY COMMISSIONERSJames Adkins, Chairman - District 5
Diane B. Rowden, Vice Chairman - District 3Nicholas W. Nicholson – District 1
Wayne Dukes - District 2Jeff Holcomb - District 4
TAX COLLECTOR SHERIFFSally L. Daniel, CFC Al Nienhuis
PROPERTY APPRAISER SUPERVISOR OF ELECTIONSJohn C. Emerson, CFA Shirley Anderson
CLERK OF COURT AND COMPTROLLERDon Barbee, Jr.
Prepared by the Office of the Clerk of Court and Comptroller, Department of Financial Services
INTRODUCTORY SECTION
This section contains the following:
Table of Contents
Letter of Transmittal
Certificate of Achievement Award
Organizational Chart
HERNANDO COUNTY, FLORIDACOMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTSSeptember 30, 2016
INTRODUCTORY SECTION
LETTER OF TRANSMITTAL I
CERTIFICATE OF ACHIEVEMENT VI
ORGANIZATIONAL CHART VII
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS 2
BASIC FINANCIAL STATEMENTS
Government-wide Financial StatementsStatement of Net Position 3Statement of Activities 5
Fund Financial StatementsGovernmental Fund Financial Statements
Balance Sheet – Governmental Funds 6Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position 8Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds 9Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds to theStatement of Activities 11
Statement of Revenues, Expenditures and Changes inFund Balances – Budget and Actual
General Fund 12Transportation Trust and Gas Taxes 13Hernando County Fire Rescue – Fire 14
Proprietary Fund Financial StatementsStatement of Net Position 15Statement of Revenues, Expenses, and Changes in Fund Net Position 19Statement of Cash Flows 21
Fiduciary Fund StatementsStatement of Fiduciary Net Position 25
Notes to the Financial Statement 26
HERNANDO COUNTY, FLORIDACOMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTSSeptember 30, 2016
REQUIRED SUPPLEMENTARY INFORMATION
FLORIDA RETIREMENT SYSTEM
Other Post Employment Benefit Plan – Schedule of Funding Progress 78Schedule of the County’s Proportionate Share of the Net Pension Liability -
Florida Retirement System and Health Insurance Subsidy Pension Plans 79Schedule of the County’s Contributions – Florida Retirement System and
Health Insurance Subsidy Pension Plans 80Notes to the Required Supplementary Information 81
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet – Non-major Governmental Funds 82Combining Statement of Revenues, Expenditures and Changes
in Fund Balances – Non-major Governmental Funds 87Budgetary Comparison Schedules 92Combining Statement of Net Position – Internal Service Funds 108Combining Statement of Revenues, Expenditures and Changes
in Fund Net Position – Internal Service Funds 110Combining Statement of Cash Flows – Internal Service Funds 112Combining Balance Sheet – Agency Funds 116Combining Statements of Changes in Assets and Liabilities – Agency Funds 118
STATISTICAL SECTION (Unaudited)
Schedule 1 Net Position by Component S-1Schedule 2 Changes in Net Position S-3Schedule 3 Fund Balances of Governmental Funds S-7Schedule 4 Changes in Fund Balances of Governmental Funds S-8Schedule 5 General Government State Shared Revenues by Source S-10Schedule 6 Fair Market, Assessed and Taxable Value of Property S-11Schedule 7 Direct and Overlapping Property Tax Rates S-12Schedule 8 Principal Property Taxpayers S-13Schedule 9 Property Tax Levies and Collections S-14Schedule 10 Ratios of Outstanding Debt by Type S-15Schedule 11 Ratios of General Bonded Debt Outstanding S-16Schedule 12 Computation of Direct and Overlapping Debt S-17Schedule 13A Bond Coverage – Capital Improvement Refunding Revenue
Bonds, 2004 S-18Schedule 13B Debt Coverage – Non-Ad Valorem Refunding Bonds, Note S-18Schedule 13C Bond Coverage – Water and Sewer Revenue Bonds, 2013A S-19Schedule 14 Demographic and Economic Statistics S-20Schedule 15 Principal Employers S-21
HERNANDO COUNTY, FLORIDACOMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTSSeptember 30, 2016
STATISTICAL SECTION (Unaudited) (Continued)
Schedule 16 County Government Employees by Function/Program S-24Schedule 17 Operating Indicators by Function S-26Schedule 18 Capital Asset and Infrastructure Statistics by Function/Program S-28
COMPLIANCE SECTION
SINGLE AUDIT REPORTS/GRANT COMPLIANCE
Independent Auditors’ Report on Internal Control OverFinancial Reporting and on Compliance and OtherMatters Based on an Audit of Financial StatementsPerformed in Accordance with Government AuditingStandards C-1
Independent Auditors’ Report on Compliance forEach Major Federal Program and State Projectand on Internal Control Over Compliance requiredby Uniform Guidance and Chapter 10.550,Rules of the Auditor General C-3
Schedule of Expenditures of Federal Awards andState Financial Assistance C-5
Notes to the Schedule of Expenditures of Federal Awards andState Financial Assistance C-9
Schedule of Findings and Questioned Costs C-11Management Letter C-13Independent Accountants’ Report on Compliance with
Section 218.415, Florida Statutes C-16Independent Accountants’ Report on Compliance with
Section 365.172(10), Florida Statutes C-17
BOND COMPLIANCE (Not covered by auditors’ report)
Bond Compliance Information C-18
Don Barbee Jr. Clerk of Circuit Court & Comptroller, Hernando County FL 20 N. Main Street, Brooksville FL, 34601 (352) 754-4201
March 24, 2017 To the Citizens of Hernando County: The Comprehensive Annual Financial Report (CAFR) of Hernando County, Florida, for the fiscal year ended September 30, 2016 is respectfully submitted. This report was prepared by the Clerk of Circuit Court and Comptroller, Department of Financial Services. Responsibility for both the accuracy of the data presented and the completeness and fairness of the presentation, including all disclosures, rests with the Clerk of Circuit Court and Comptroller (Clerk and Comptroller) as Chief Financial Officer of Hernando County. To provide a reasonable basis in meeting this responsibility, a comprehensive internal control framework has been established that is designed both to protect the County’s assets from loss, theft or misuse, and to compile sufficient reliable information for the preparation of the County’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP). The Management’s Discussion and Analysis in the Financial Section of the CAFR should be read in conjunction with this Letter of Transmittal. Profile of the County Hernando County, population 179,503, is located in the west central region of the State of Florida, allowing easy access to the Tampa and Orlando metropolitan areas. As part of the Tampa Bay Region, it is bound by the Gulf of Mexico on the west, Citrus County to the north, Sumter County to the east, and Pasco County to the south. Hernando County, established in 1843, covers 473 square miles and is named in honor of Spanish explorer Hernando De Soto, who led an expedition through the county in 1539. Hernando County has two incorporated cities: the City of Brooksville, the county seat, with a population of 8,006 is rich in history and traditions; and the City of Weeki Wachee with a population of 5 which incorporated many decades ago to promote its tourism attraction, the Buccaneer Bay/Weeki Wachee Resort, commonly known as the “City of Mermaids.” Hernando County’s unincorporated areas include Ridge Manor, Bayport, Aripeka, Lake Lindsey, Istachatta/Nobleton, Masaryktown, Hernando Beach, and most notably, Spring Hill. Spring Hill, located in the southwest part of the County, is the largest unincorporated Hernando County community. Hernando County is the heart of the Sunshine State’s renowned Nature Coast. Hernando County offers scenic rolling hills, spectacular parks and waterways, some of the best paved bike trails in Florida, and ten locations along the Great Florida Birding Trail. Activities of the Nature Coast include hunting, camping, bird watching and hiking, as well as fishing, boating, paddling and kayaking on the County’s many waterways. Situated at the geographic center of the state with easy access to major highways like the Suncoast Parkway, Interstate 75, State Road 50 and US Highway 41 make Hernando County a strategic business location. Hernando County is unique in the Tampa Bay area with its variety of industrial site options including a vibrant general aviation airport and business complex, private
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land, and existing buildings with significant room for growth. Major industries include manufacturing, precision machining, distribution and healthcare. Growing retail trade and a wide selection of professional services enables Hernando County to offer significant choices for its residents. Hernando County government provides a full range of services including law enforcement, emergency medical services, fire protection, mass transportation services, health and social services, cultural and recreational services, water, sewer, waste disposal and business development. The Hernando County Board of County Commissioners, as the legislative body for Hernando County, budgets and provides all of the funding used by its Departments and the separate Constitutional Officers with the exception of certain fees collected by the Tax Collector, Clerk and Comptroller, Property Appraiser and Sheriff. Hernando County operates under a five-member policy-making elected Board. The Board appoints a county administrator who in turn appoints various department managers. All five Board members and the five constitutional officers are elected to four-year terms. Under the direction of the Clerk and Comptroller, the Department of Financial Services maintains the accounting system for the Board of County Commissioners and the Clerk and Comptroller. The Tax Collector, Property Appraiser, Supervisor of Elections and Sheriff maintain their own accounting systems. All of the Constitutional Officers invest their funds independently. The Clerk and Comptroller manages the investments of the Board of County Commissioners and the Clerk and Comptroller. Formal budgetary integration is employed as a management control device during the year for all significant funds. The Board of County Commissioners adopts budgets on a basis consistent with Generally Accepted Accounting Principles (GAAP). The adoption and amendment of the budget is done consistent with the laws of Florida. The legal level of control is established on a fund basis; however, operational control is maintained during the year at the lower of the department or fund level. Budgetary control is maintained through the use of encumbrances. Factors Affecting Financial and Economic Conditions Local Economy. Following are some highlights of the County’s economic status: The population of the County is currently approximately 179,503 which is an increase of 14%
over what it was 10 years ago. The County’s population is projected to be almost 197,000 five years from now and over 212,000 ten years from now.
As part of the Tampa Bay region, Hernando County enjoys being a part of the largest
consumer market in Florida. Industrial business expansions and new development were welcomed in a number of
sectors. The County recruited three new companies, E-Telequote, Successful Acquisitions, and Airofog, while retaining and growing six existing businesses representing 123,500 square feet of space, 185 new jobs and 119 existing jobs.
Both residential and commercial development are increasing. The inventory of lots in existing
developed subdivisions is decreasing, and new phases are being submitted for approval.
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Commercial development continues to be steady along SR 50 in Spring Hill, a major shopping corridor in the County. In addition, a significant number of developments have been approved and are expected to be of interest to developers as the economy continues to improve. Seville includes provisions for 854,000 square feet of commercial space and 3,900 dwelling units. Glen Lakes, a project vested from the State Developments of Regional Impact (DRI) rule has updated master plans for 1487 residential units. There are also several DRl's that have been approved by the State which remain vested for development. These include the Quarry Preserve DRI, Lake Hideaway DRI, Sunrise DRI and Hickory Hill DRI. In total, these projects would add over 16,000 dwelling units, 425,000 square feet of retail, 850,000 square feet of business park uses, 795,000 square feet of commercial and 108 holes of golf.
Long Term Financial Planning. The County prepares a 5-year Capital Improvement Plan which is adopted by the Board with the annual budget approval. It identifies all public capital facilities, public infrastructure and equipment, with a value over $50,000 and a useful life over 10 years. The plan identifies the funding source (taxes, grants, impact fees, etc) for each project. Major Initiatives. Hernando County government takes pride in its accomplishments for the fiscal year. The County is proud of the infrastructure, public facilities and programs that have been realized for the citizens of our County. Following is a list of some of our achievements for the year: Tourism Development had double digit increases in revenues for three years straight that
brought more marketing dollars to promote the new brand launched last year. It has created a positive economic impact, jobs and tax relief for our residents at a value of of $1,535 per household, according to Visit Florida’s research.
The County maintained and improved 22 county parks by adding pay stations, playground
equipment, a football field, electronic gates and replacing beach sand. They continue to build partnerships with public, private groups, schools and organizations through the Parks and Recreation Department offering both adult and youth events.
TheBus saw a year of growth by adding a new route and realigning and expanding others. It
also increased the frequency of service by 25% and experienced an increase in ridership of 16%. The county improved 19 of the bus stops with boarding and lighting areas to make them fully accessible to riders with disabilities. They will continue this process every year until all bus stops have been upgraded.
The Library System was the host to many outreach programs, such as “Touch a Truck” event
which encouraged citizens to explore the many utility and rescue vehicles used throughout the community. This and other outreach programs like the Brooksville Library 5K attracted almost 5,000 citizens to the Library environment, encouraging them to continue to utilize the County’s Library Services.
The Insurance Services Office ranks fire rescue departments across the country on a scale
from Class 1 to 10 with 1 being highest, based on National Fire Protection Association standards. The classification reflects the relative low risk of fire losses in the county
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compared to other localities across the nation. Hernando County Fire Rescue received a Class 2/2Y rating which may result in residents qualifying for lower property insurance premiums.
The Department of Public Works completed 66 miles of improved roadways along with
creating an Aquatic Services Department to assist and coordinate efforts in preparing a 10 year artificial reef plan.
In an effort to meet the National Resources Vision of the County’s Strategic Plan, the County
planned for enhanced water quality in the springs and springsheds, increased garbage recycling by 36%, removed almost 3000 dangerous plant species in coastal communities, and increased use of reclaimed water to 1.5 million gallons per day.
The Utilities Department which services approximately 60,000 customers moved into their
new administration building in September 2016. The move allowed multiple departments to merge under one roof which offers customers the convenience of conducting business at one centralized location. The building houses Utilities Administration, Engineering, Finance, Water Conservation, Customer Service, Billing and Meter Readers.
In May 2016, the $25 million expansion of the Airport Wastewater Treatment Facility became
operational. The plant’s expansion increased its capacity from 1.25 million gallons per day (MGD) to 3.5 MGD and is designed for future expansion to 6 MGD.
The Supervisor of Elections broke the previous two years’ records during the August Primary
Election by reporting 100% of the unofficial results by 7:29 p.m. The office handled an unprecedented 4,700 party affiliation changes in relation to the Primary and saw an increased number of voters.
The Brooksville-Tampa Bay Regional Airport, a public use general aviation facility finalized
its Master Plan which lays out the foundation for growth over many years to come. Additionally, to meet demand, 40 new T-Hangars for Piston Aircraft were built during the year.
Hernando County has adopted many budgetary and financial policies and continually monitors them for adherence and relevance. The establishment of budgetary and financial policies enables the Board, management and the community to monitor County performance. Following are some of the more significant budgetary policies: the Board annually adopts a balanced budget; fund balances anticipated at the end of a fiscal year are budgeted as the beginning fund balance for the following year; any variance between budgeted fund balance forward and actual fund balance forward is adjusted through a budget amendment; the budget is prepared in compliance with the County’s Budget Reserve Policy and Reserve Stabilization Policy; a minimum reserve policy requires reserves in the General Fund to be maintained at 18.5% and Hernando County maintains a five-year Capital Improvement Program (CIP) and updates it annually.
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Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Hernando County for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2015. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. Hernando County has received a Certificate of Achievement for the last 31 consecutive years. We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we are submitting it to the GFOA. Acknowledgments This report is the product of the dedication of the Department of Financial Services of the Clerk of Circuit Court and Comptroller of Hernando County as Auditor and Comptroller to the Board of County Commissioners. We would like to express our appreciation and thanks to Frances Pioszak, Assistant Director of Financial Services, the County Administration and Budget Offices, and the firm of Purvis, Gray and Company, LLP, who helped us with their comments and advice throughout the year. Respectfully submitted,
Don Barbee, Jr. Clerk of Circuit Court and Comptroller
Amy Gillis, CPA, CGFO Director of Financial Services
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CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCEIN FINANCIAL REPORTING
The Governmental Finance Officers Association of the United States and Canada(GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting toHernando County, Florida for its comprehensive annual financial report for the fiscal
year ended September 30, 2015. The Certificate of Achievement is a prestigiousnational award recognizing conformance with the highest standards for preparation of
state and local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish aneasily readable and efficiently organized comprehensive annual financial report, whose
contents conform to program standards. Such reports must satisfy both generallyaccepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. Hernando Countyhas received a Certificate of Achievement for the last thirty-one consecutive years. We
believe our current report continues to conform to the Certificate of Achievementprogram requirements, and we are submitting it to GFOA.
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Assistant CountyAdministrator
Animal ServicesFacilities Maintenance
Parks & RecreationFleet OperationsMosquito ControlPublic Safety-Fire/Rescue
Assistant CountyAdministrator
Human Resources Technology Services
Office of Management &Budget
PurchasingRisk ManagementWorkers Compensation
Assistant CountyAdministrator
County EngineerDepartment of Public WorksEnvironmental ServicesSolid Waste & RecyclingWater/WastewaterWaterways
Supervisor of Elections
Hernando County Sheriff
Hernando County Citizens
Board of County Commissioners
CountyAttorney
Assistant CountyAdministrator
Code EnforcementCounty ExtensionHealth & Human ServicesLibrary ServicesMass TransitPlanningSensitive LandsVeterans ServicesZoning
Airport OperationsBuilding DivisionBusiness DevelopmentPublic Information ManagerTourist DevelopmentPublic Information Manager
CountyAdministrator
Clerk of Circuit Court
Tax Collector
Property Appraiser
FINANCIAL SECTION
This section contains the following:
Independent Auditor’s Report
Management’s Discussion and Analysis
Basic Financial Statements
Notes to the Financial Statements
Required Supplementary Information
Combining and Individual Fund Statements and Schedules
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INDEPENDENT AUDITORS’ REPORT Distinguished Members of the Board of County Commission Hernando County, 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 Hernando County, Florida (the County) as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements 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. Auditors’ 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 opinions.
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Distinguished Members of the Board of County Commission Hernando County, Florida
INDEPENDENT AUDITORS’ REPORT (Continued)
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 County as of September 30, 2016, and the respective changes in financial position, and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund, the Transportation Trust and Gas Taxes Fund, and the Hernando County Fire Rescue-Fire 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 and other required supplementary information as listed in the table of contents (collectively, the required supplementary information) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The introductory section, combining and individual fund statements and schedules, statistical section, and bond compliance section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and Chapter 10.550, Rules of the Auditor General of the State of Florida, and is also not a required part of the basic financial statements. The combining and individual fund statements and schedules and the schedule of expenditures of federal awards and state financial assistance are the responsibility of management and were derived from and relate 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 fund statements and schedules, and the schedule of expenditures of federal awards and state financial assistance, are fairly stated in all material respects in relation to the basic financial statements as a whole.
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Distinguished Members of the Board of County Commission Hernando County, Florida
INDEPENDENT AUDITORS’ REPORT (Concluded)
Other Matters (Concluded) Other Information (Concluded) The introductory, statistical, and bond compliance 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 our report dated March 24, 2017, on our consideration of the County’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 County’s internal control over financial reporting and compliance. March 24, 2017 Sarasota, Florida
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M A NA GEM ENT’ S D IS C US S IO N A ND A NA L YS IS
This d is c u s s ion and analys is ofH ernand o C ou nty’ s financ ials tatements provid es an overview ofthe financ ialac tivityofthe C ou nty forthe fis c alyearend ed S eptember30 , 2 0 16. W e enc ou rage read ing this narrative in c onju nc tion withthe Trans mittalL etterin the Introd u c tory S ec tion.
FINA NC IA L H IGH L IGH TS
A tthe c los e ofthe mos trec entfis c alyear, S eptember30 , 2 0 16, the C ou nty’ s as s ets and d eferred ou tflows exc eed edits liabilities and d eferred inflows by $556, 8 8 8 , 0 37 . This repres ents an inc reas e of$2 , 50 9, 395 overthe prioryearnetpos ition. O fthe $556, 8 8 8 , 0 37 d ifferenc e between as s ets and liabilities , a negative $599, 7 23, was u nres tric ted .
N etpos ition of governmentalac tivities d ec reas ed $9, 423, 2 8 3. N etpos ition of bu s ines s -type ac tivities inc reas ed$11 , 932 , 67 8 . A c c ord ingly, netpos ition of both the governmentalac tivities and bu s ines s -type ac tivities inc reas ed atotalof$2 , 50 9, 395.
A s ofS eptember30 , 2 0 16, u nas s igned fu nd balanc e in the governmentalfu nd s was $9, 442 , 933; repres enting a 2 7 %d ec reas e from the previou s yearu nas s igned fu nd balanc e of$12 , 992 , 496. The netc hange in fu nd balanc es in thegovernmentalfu nd s inc reas ed from a negative $8 , 8 91 , 67 8 forthe fis c alyear20 14-15 to a negative $1 , 967 , 98 2 forthefis c alyear 20 15-16. The c u rrentinc reas e is pred ominantly d u e to an inc reas e in the fu nd balanc e of N onmajorGovernmentalFu nd s of$4, 7 65, 413 c ompared to an inc reas e of $2 , 32 0 , 8 38 in the prioryear. This was offs etby ad ec reas e in the d ec line offu nd balanc e ofImpac tFee C apitalP rojec tFu nd from $5, 2 7 9, 432 to $38 0 , 7 0 8 in the c u rrentyear. The fu nd balanc e ofthe GeneralFu nd d ec reas ed from a pos itive $421 , 664 in fis c alyear20 14-15 to a negative$663, 548 in fis c alyear20 15-16.
The C ou nty’ s larges tenterpris e fu nd , the W ater& S ewerD is tric t, had an inc reas e in netpos ition of$7 , 633, 1 8 3 fortheyearwith the inc reas e mos tly being in the operating inc ome. The W aterand S eweroperating inc ome of$5, 350 , 2 7 0repres ents a 21% inc reas e overoperating inc ome ofthe previou s year. W as te M anagementhad an inc reas e in netpos ition of$2 , 0 8 7 , 0 7 6 forthe yearc ompared to an inc reas e of$4, 7 52 , 67 2 in the prioryear.
O VERVIEW O F TH E FINA NC IA L S TA TEM ENTS
The C ou nty’ s C omprehens ive A nnu alFinanc ialReport(C A FR) c ons is ts of s even parts : an introd u c tory s ec tion;management’ s d is c u s s ion and analys is (this overview); the bas ic financ ials tatements ; req u ired s u pplementaryinformation; an optionals ec tion thatpres ents c ombinings tatements fornon-majorgovernmentalfu nd s , internals ervic efu nd s and c ertain ind ivid u alfu nd financ ials tatements ; s tatis tic alinformation; and c omplianc e information. The bas icfinanc ials tatements c ons is tofthree parts : government-wid e financ ials tatements , fu nd financ ials tatements and notesto the financ ials tatements . B elow is a d iagram ofthe c omponents ofthe C A FR:
M anagement’ s D is c u s s ion & A nalys is
B as ic Financ ialS tatements
S tatis tic alInformation
Government-W id e Financ ialS tatements
Fu nd Financ ialS tatements
N otes to the Financ ialS tatements
C omplianc e Information
C ombining& Ind ivid u alFu ndS tatements and S c hed u les
Requ ired S u pplementaryInformation
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Governm ent-W id e Financ ialS tatem ents
The government-wid e financ ials tatements provid e read ers withabroad overview ofH ernand o C ou nty’ s financ es u s inga governmentalorbu s ines s -type c las s ific ation. The government-wid e financ ials tatements inc lu d e a s tatementofnetpos ition and a s tatementofac tivities . The government-wid e financ ials tatements d is tingu is h between fu nc tions thatare princ ipally s u pported by taxes and intergovernmentalrevenu es (governmentalac tivities ) and thos e thatareprinc ipally s u pported by u s erfees and c harges (bu s ines s -type ac tivities ). The government-wid e financ ials tatementsare prepared u s ingan ec onomic res ou rc es meas u rementfoc u s and the ac c ru albas is ofac c ou nting.
The statem entofnetposition pres ents information on allas s ets (plu s d eferred ou tflows )and liabilities (plu s d eferredinflows )ofthe C ou nty, with the d ifferenc e reported as netpos ition. O vertime, inc reas es ord ec reas es in netpos itionmay s erve as a u s efu lind ic atorofwhetherthe financ ialpos ition ofH ernand o C ou nty is improvingord eteriorating.
The statem entofac tivities pres ents information on allrevenu es and expens es ofthe C ou nty and the c hange in netpos ition. This s tatementprovid es the expens es of a given fu nc tion orac tivity offs etby related program revenu esres u ltingin the netexpens e orrevenu e forthe fu nc tion orac tivity. Generalrevenu es , s u c has taxes , are then pres entedres u lting in a finalc hange in netpos ition. A llrevenu es and expens es are reported as s oon as the u nd erlying eventgivingris e to the c hange oc c u rs , regard les s ofthe timingofrelated c as hflows .
Fu nd Financ ialS tatem ents
The fu nd financ ials tatements provid e more d etailed information abou tthe C ou nty’ s majorfu nd s ind ivid u ally. A fu ndis agrou pingofrelated ac c ou nts thatis u s ed to maintain c ontroloverres ou rc es thathave been s egregated fors pec ificac tivities orobjec tives . H ernand o C ou nty, like others tate and loc algovernments , u s es fu nd ac c ou ntingto ens u re andd emons trate c omplianc e withfinanc e-related legalreq u irements . S ome fu nd s are requ ired by s tate orloc allaw, bondc ovenants orthe C ou nty’ s d es ire to c ontrol, manage and ac c ou ntford es ignated revenu es orexpens es s eparately. A llofthe fu nd s ofthe C ou nty c an be d ivid ed into three c ategories : governmentalfu nd s , proprietary fu nd s , and fid u c iaryfu nd s .
Governm entalfu nd financ ials tatements u s e the c u rrentfinanc ialres ou rc es meas u rementfoc u s and the mod ifiedac c ru albas is ofac c ou nting, whic hmeas u res c u rrentas s ets and liabilities , c hanges in c u rrentfinanc ialres ou rc es , andc u rrentavailable res ou rc es .
B ec au s e the foc u s ofgovernmentalfu nd financ ials tatements is bas ed on ac c ou nting forres ou rc es on a more c u rrentbas is , itis u s efu lto c ompare with information pres ented forgovernmentalac tivities whic h foc u s more on long-termres ou rc e ac c ou nting. Rec onc iliations of fu nd balanc e in governmentalfu nd s and c hanges in fu nd balanc e to netpos ition and c hanges in netpos ition of governmentalac tivities are provid ed with the governmentalfu nd financ ials tatements .
P roprietary fu nd financ ials tatements c ons is tof two fu nd types : Enterpris e Fu nd s and InternalS ervic e Fu nd s .P roprietary fu nd s u s e an ec onomic res ou rc es meas u rementfoc u s and the ac c ru albas is of ac c ou nting, whic hmeas u res allas s ets and liabilities , c hanges in ec onomic res ou rc es , and totalec onomic res ou rc es .
Fid u c iary fu nd financ ials tatements provid e information c onc erning as s ets held in tru s tby the C ou nty on behalf ofothers . Fid u c iary fu nd s u s e the ec onomic res ou rc es meas u rementfoc u s and the ac c ru albas is of ac c ou nting.Fid u c iary fu nd s are notreflec ted in the government-wid e financ ials tatements bec au s e the res ou rc es ofthos e fu nd sare notavailable to s u pportthe C ou nty’ s own programs .
Notes to the Financ ialS tatem ents
The notes provid e ad d itionald etailc onc erningthe financ ialac tivities and balanc es ofthe C ou nty and are es s entialforthe read erto have a fu llu nd ers tand ingofthe s tatements .
2 c
A N A L YS IS O F TH E GO VERNM ENT-W ID E FINA NC IA L S TA TEM ENTS
H ernand o C ou nty’ s NetP osition
A s noted earlier, netpos ition may s erve overtime as a u s efu lind ic atorofa government’ s financ ialpos ition. In thec as e ofH ernand o C ou nty, netpos ition was $556, 8 8 8 , 0 37 atthe c los e ofthe mos trec entfis c alyear. This repres entsan inc reas e of$2 , 50 9, 395 or0 . 5% from the prioryear.
The larges tportion of H ernand o C ou nty’ s netpos ition (8 7 %) reflec ts its inves tmentin c apitalas s ets (e. g. , land ,infras tru c tu re, bu ild ings , improvements , c ons tru c tion in progres s , intangible as s ets and eq u ipment), les s anyac c u mu lated d eprec iation and related d ebtu s ed to ac q u ire thos e as s ets thatis s tillou ts tand ing. H ernand o C ou ntyu s es thes e c apitalas s ets to provid e s ervic es to c itizens ; c ons eq u ently, thes e as s ets are notavailable for fu tu res pend ing. A lthou gh H ernand o C ou nty’ s inves tmentin its c apitalas s ets is reported netofrelated d ebt, its hou ld benoted thatthe res ou rc es need ed to repay this d ebtmu s tbe provid ed from others ou rc es , s inc e the c apitalas s etsthems elves c annotbe u s ed to liqu id ate thes e liabilities .
A n ad d itionalportion ofthe C ou nty’ s netpos ition (14%)repres ents res ou rc es thatare s u bjec tto externalres tric tionson how they may be u s ed .
The remainingbalanc e ofthe C ou nty’ s netpos ition (negative 1%)is u nres tric ted .
Governmental B u s ines s -Type
A c tivities A c tivities Totals
2 0 15 20 16 2 0 15 20 16 2 0 15 20 16
C u rrentand otheras s ets $ 129, 52 8 , 8 51 $ 12 0 , 67 0 , 434 $ 7 4, 534, 945 $ 7 8 , 495, 135 $ 20 4, 0 63, 7 96 $ 199, 165, 569
C apitaland otherlong-term as s ets 339, 469, 145 339, 30 4, 7 38 248 , 7 25, 8 94 266, 7 52 , 993 58 8 , 1 95, 0 39 60 6, 0 57 , 7 31
Totalas s ets 468 , 997 , 996 459, 97 5, 1 7 2 323, 260 , 8 39 345, 248 , 1 2 8 7 92 , 258 , 8 35 8 0 5, 2 23, 30 0
D eferred O u tflows ofRes ou rc es 1 2 , 362 , 690 50 , 341 , 515 2 , 546, 661 4, 8 7 2 , 635 14, 90 9, 351 55, 214, 150
L ong-term liabilities 11 8 , 7 36, 354 168 , 0 42 , 8 7 2 92 , 51 8 , 90 8 1 0 9, 0 99, 50 4 211 , 255, 262 2 7 7 , 142 , 37 6
O therliabilities 14, 330 , 0 12 1 1 , 293, 60 8 14, 12 1 , 393 10 , 469, 366 2 8 , 451 , 40 5 21 , 7 62 , 97 4
Totalliabilities 133, 0 66, 366 1 7 9, 336, 48 0 1 0 6, 640 , 30 1 1 19, 568 , 8 7 0 239, 7 0 6, 667 298 , 90 5, 350
D eferred Inflows ofRes ou rc es 1 2 , 2 8 7 , 561 4, 396, 7 32 7 95, 315 247 , 331 13, 0 8 2 , 8 7 6 4, 644, 0 63
N etpos ition:
N etInves tmentin c apitalas s ets 30 3, 50 5, 560 30 6, 37 3, 129 1 7 1 , 559, 1 8 8 1 7 5, 8 8 5, 969 47 5, 0 64, 7 48 48 2 , 259, 0 98
Res tric ted 61 , 254, 497 62 , 47 5, 97 0 9, 597 , 542 12 , 7 52 , 692 7 0 , 8 52 , 0 39 7 5, 22 8 , 662
Unres tric ted (2 8 , 7 53, 299) (42 , 265, 624) 37 , 2 15, 154 41 , 665, 90 1 8 , 461 , 8 55 (599, 7 23)
Totalnetpos ition $ 336, 0 0 6, 7 58 $ 326, 58 3, 47 5 $ 21 8 , 37 1 , 8 8 4 $ 230 , 30 4, 562 $ 554, 37 8 , 642 $ 556, 8 8 8 , 0 37
2 d
H ernand o C ou nty’ s C hanges in NetP osition
Governmental B u s ines s -Type
A c tivities A c tivities Totals
2 0 15 20 16 2 0 15 20 16 2 0 15 20 16
Revenu es
P rogram revenu es :
C harges fors ervic es $ 54, 58 7 , 8 8 9 $ 54, 957 , 7 7 9 $ 40 , 445, 0 60 $ 43, 461 , 2 8 7 $ 95, 0 32 , 949 $ 98 , 419, 0 66
O peratinggrants and
c ontribu tions 5, 0 33, 32 7 4, 935, 0 1 8 294, 252 93, 531 5, 32 7 , 57 9 5, 0 2 8 , 549
C apitalgrants and c ontribu tions 3, 0 0 6, 364 1 , 7 7 7 , 534 2 , 531 , 225 5, 30 6, 0 69 5, 537 , 58 9 7 , 0 8 3, 60 3
Generalrevenu es :
P roperty taxes 58 , 98 3, 60 8 61 , 57 1 , 8 69 - - 58 , 98 3, 60 8 61 , 57 1 , 8 69
O thertaxes 2 2 , 2 24, 996 24, 695, 136 - - 22 , 224, 996 24, 695, 136
Inves tmentearnings 1 , 67 1 , 419 1 , 437 , 246 7 43, 457 7 0 1 , 30 9 2 , 414, 8 7 6 2 , 138 , 555
O ther 1 , 495, 368 1 , 7 26, 398 91 0 , 1 94 8 46, 158 2 , 40 5, 562 2 , 57 2 , 556
Totalrevenu es 147 , 0 0 2 , 97 1 151 , 1 0 0 , 98 0 44, 924, 1 8 8 50 , 40 8 , 354 191 , 92 7 , 159 2 0 1 , 50 9, 334
Expens es
Generalgovernment 22 , 134, 0 8 1 24, 58 2 , 691 - - 22 , 134, 0 8 1 24, 58 2 , 691
P u blic s afety 7 4, 1 0 5, 0 0 7 8 6, 58 1 , 625 - - 7 4, 1 0 5, 0 0 7 8 6, 58 1 , 625
P hys ic alenvironment 1 , 194, 68 7 1 , 230 , 350 - - 1 , 194, 68 7 1 , 230 , 350
Trans portation 20 , 1 8 7 , 2 26 23, 236, 37 7 - - 20 , 1 8 7 , 2 26 23, 236, 37 7
E c onomic environment 2 , 355, 434 3, 0 95, 345 - - 2 , 355, 434 3, 0 95, 345
H u man s ervic es 8 , 7 61 , 7 1 7 7 , 2 7 4, 535 - - 8 , 7 61 , 7 1 7 7 , 2 7 4, 535
C u ltu re and rec reation 5, 145, 7 8 0 5, 7 15, 51 8 - - 5, 145, 7 8 0 5, 7 15, 51 8
C ou rtoperations 6, 8 68 , 369 6, 7 7 2 , 68 0 - - 6, 8 68 , 369 6, 7 7 2 , 68 0
Interes ton long-term d ebt 1 , 0 62 , 194 1 , 0 37 , 630 - - 1 , 0 62 , 194 1 , 0 37 , 630
W aterand s ewer - - 25, 8 8 1 , 67 9 2 7 , 67 2 , 539 25, 8 8 1 , 67 9 2 7 , 67 2 , 539
A viation operations - - 2 , 242 , 2 7 8 2 , 567 , 431 2 , 242 , 2 7 8 2 , 567 , 431
W as te management - - 3, 348 , 0 66 6, 446, 7 7 2 3, 348 , 0 66 6, 446, 7 7 2
B u ild ingd epartment - - 2 , 2 1 8 , 0 37 2 , 7 8 6, 446 2 , 2 1 8 , 0 37 2 , 7 8 6, 446
Totalexpens es 141 , 8 14, 495 159, 526, 7 51 33, 690 , 0 60 39, 47 3, 1 8 8 1 7 5, 50 4, 555 198 , 999, 939
C hange in netpos ition before trans fers 5, 1 8 8 , 47 6 (8 , 425, 7 7 1) 11 , 234, 1 2 8 1 0 , 935, 166 16, 42 2 , 60 4 2 , 50 9, 395
Trans fers 60 9, 8 8 7 (997 , 51 2) (60 9, 8 8 7 ) 997 , 512 - -
C hange in netpos ition 5, 7 98 , 363 (9, 423, 2 8 3) 10 , 624, 241 11 , 932 , 67 8 16, 42 2 , 60 4 2 , 50 9, 395
N etpos ition –beginningofyear 397 , 331 , 216 336, 0 0 6, 7 58 2 1 2 , 561 , 2 0 7 2 1 8 , 37 1 , 8 8 4 60 9, 8 92 , 423 554, 37 8 , 642
A d ju s tmentto beginningnetpos ition (67 , 1 2 2 , 8 2 1) - (4, 8 13, 564) - (7 1 , 936, 38 5) -
N etpos ition –end ofyear $ 336, 0 0 6, 7 58 $ 326, 58 3, 47 5 $ 21 8 , 37 1 , 8 8 4 $ 230 , 30 4, 562 $ 554, 37 8 , 642 $ 556, 8 8 8 , 0 37
2e
Governm entalA c tivities
N etpos ition ofthe governmentalac tivities d ec reas ed $9, 423, 2 8 3 or3% overprioryearnetpos ition balanc e. P rogramrevenu es in the amou ntof $61 , 67 0 , 331 were u s ed to offs etprogram expens es of $159, 526, 7 51 res u lting in a netprogram los s of$97 , 8 56, 42 0 . Generalrevenu es and trans fers totaling of$8 8 , 433, 137 offs etthe d ifferenc e in thos eprogram expens es and res u lted in a totalnetd ec reas e of$9, 423, 2 8 3.
P rogram revenu es d ec reas ed 2% d u ringthe year. The d ec reas e in P rogram Revenu es is mos tlyattribu table to a $1 . 2million or41% d ec reas e in C apitalGrants and C ontribu tions . C apitalGrants and C ontribu tions d ec reas ed mainly d u eto the c ompletion of L A P C ons tru c tion projec ts in fis c alyear20 14-15. The new L A P projec ts whic h began in fis c alyear20 15-16 are only in the d es ign s tages .
P roperty taxes inc reas ed $2 . 6 million or4% d u e to a 3% inc reas e in the taxable valu e ofproperty in the C ou nty.
Fu eltaxes inc reas ed $1 . 9 million or31% d u e to a 3-c entinc reas e in the L oc alO ption gas taxes . Two pennies oftheproc eed s go to the loc als treetres u rfac ingprogram .
P rogram expens es inc reas ed 12% over the prior year. The mos ts ignific antc hanges were inc reas es in GeneralGovernment, P u blic S afety and Trans portation expens es whic h were offs etby a d ec reas e in H u man S ervic esexpens es .
GeneralGovernmentexpens es inc reas ed 1 1% d u e to a c hange in the N etP ens ion L iability bas ed u pon the mos trec entrates provid ed by the Florid a RetirementS ys tem . A ls o, pollworkers were need ed d u ring the year by theS u pervis orofElec tions bec au s e itwas a pres id entialelec tion year. This type ofexpens e is inc u rred as need ed .
P u blic S afety expens es inc reas ed 1 7 % d u e to a c hange in the N etP ens ion L iability bas ed u pon the mos trec entratesprovid ed by the Florid a RetirementS ys tem . H ealth ins u ranc e and retirementc os ts als o inc reas ed . There was als o$52 8 , 0 0 0 inc reas e in c apitalou tlay forvehic les u s ed in provid ingP u blic S afety.
Trans portation expens es inc reas ed 15% d u e to an inc reas e in healthins u ranc e and retirementc os ts . Expens es als oinc reas ed d u e to a c hange in the N etP ens ion L iability bas ed u pon the mos trec entrates provid ed by the Florid aRetirementS ys tem .
H u man S ervic es expens es d ec reas ed 1 7 % d u e to payments of $1 . 3 million mad e in prior year for an agreementbetween H ernand o C ou nty and the S tate of Florid a to inc reas e the provis ion of health s ervic es for M ed ic aid , theu nins u red and u nd er-ins u red pers ons of the C ou nty and the S tate of Florid a atlarge. There was no agreementinplac e forfis c alyear20 15-16.
B u siness-Type A c tivities
N etpos ition ofthe bu s ines s -type ac tivities inc reas ed $11 , 932 , 67 8 or6% overprioryearnetpos ition balanc e. P rogramrevenu es in the amou ntof$48 , 8 60 , 8 8 7 were u s ed to offs etprogram expens es of$39, 47 3, 1 8 8 , res u ltingin netprograminc ome of$9, 38 7 , 699. Generalrevenu es les s trans fers in the amou ntof$997 , 512 res u lted in a totalnetinc reas e of$11 , 932 , 67 8 .
C harges fors ervic es inc reas ed mos tlyd u e to inc reas es in c harges forwaterand s ewers ervic es of$2 . 8 million or10 %from inc reas es in waterc ons u mption and the phas ed in inc reas e in rates as partofa five-yearrate plan.
C apitalGrants and C ontribu tions inc reas ed 11 0 % from prior year d u e to progres s of variou s airportc ons tru c tionprojec ts .
W aterand S ewerexpens es inc reas ed 7 % d u e to inc reas es in retirementc ontribu tions and healthins u ranc e. A d d itionalexpens es were inc u rred on repairs and maintenanc e ofthe new ad minis tration bu ild ingforu tilities d epartment. A ls o,the B erkley M anorwas tewatertreatmentplantwas d ec ommis s ioned res u ltingin ad d itionalexpens e of$323, 0 0 0 .
W as te M anagementexpens es inc reas ed 93% d u e to a c hange in the es timated long term c are c os ts ofthe land fill.There was a s ignific antd ec reas e in long term c are c os ts in fis c alyear20 14-15 d u e to a c hange in es timate forfinalc los u re and pos tc los u re c os ts forone ofthe land fillc ells . S ee N ote N formore information.
2f
B u ild ing D epartmentexpens es inc reas ed 25% d u e to inc reas es in retirementc ontribu tions and health ins u ranc e.A d d itionalc os ts were als o inc u rred foroffic e remod elingto c reate ad d itionalworks pac e.
A N A L YS IS O F TH E FUND FINA NC IA L S TA TEM ENTS
A s noted earlier, the C ou nty u s es fu nd ac c ou nting to ens u re and d emons trate c omplianc e with financ e-related legalrequ irements . Followingis a d is c u s s ion ofthe financ ials tatements on a fu nd ac c ou ntinglevel.
Governm entalFu nd s
A s previou s ly d is c u s s ed , governmentalfu nd s meas u re c u rrentas s ets and liabilities and c u rrentor s pend ableres ou rc es . A fu nd ’ s u nas s igned fu nd balanc e may provid e a u s efu lmeas u re ofthe fu nd ’ s netres ou rc es available fors pend ingatthe end ofthe fis c alyear.
A s ofthe end ofthe c u rrentfis c alyear, H ernand o C ou nty governmentalfu nd s reported fu nd balanc es of$91 , 996, 7 7 1 ,a d ec reas e of$1 , 967 , 98 2 or2% from prioryearbalanc es . O fthe $91 , 996, 7 7 1 fu nd balanc e in governmentalfu nd s ,$9, 442 , 933 c ons titu tes u nas s igned fu nd balanc e, whic h is available for s pend ing atthe C ou nty’ s d is c retion and$4, 62 7 , 0 38 whic h is non-s pend able. The remaind eroffu nd balanc e available fors pend ing c ons is ts ofthe following:$60 , 254, 8 0 6 in ‘ Res tric ted Fu nd B alanc e’ whic his res tric ted bylaw orexternallyimpos ed req u irements ; $6, 567 , 563 in‘ C ommitted Fu nd B alanc e’ whic his c ommitted foras pec ific pu rpos e bythe B oard ; and $11 , 1 0 4, 431 in ‘ A s s igned Fu ndB alanc e’ whic h is as s igned fora s pec ific pu rpos e by the B oard withou tformalapproval. S ee N ote A , GovernmentalFu nd B alanc e C las s ific ations , formore information.
Governmentalfu nd s are c ompris ed ofthe GeneralFu nd , S pec ialRevenu e Fu nd s , D ebtS ervic e Fu nd s and C apitalP rojec tFu nd s . The GeneralFu nd is the c hiefoperatingfu nd ofthe C ou nty. A s ofthe end ofthe fis c alyear, totalfu ndbalanc e forthe GeneralFu nd was $22 , 67 4, 2 8 7 repres enting a 3% d ec reas e from the previou s year. Following is ac hartofthe fu nd balanc e trend overthe pas tten years ofthe GeneralFu nd :
In the GeneralFu nd , the fu nd balanc e d ec reas ed $663, 548 , or3% . GeneralFu nd revenu es d ec reas ed les s than 1%and GeneralFu nd expend itu res inc reas ed 3% from prioryear. Revenu e from Taxes inc reas ed $1 , 395, 22 0 from theprioryeard u e to an inc reas e in the taxable valu e ofpropertyfrom the prioryear. C harges fors ervic es d ec reas ed 13%d u e to $1 . 6 million being rec eived in fis c alyear20 14-15 forthe las tpaymentu nd era leas e agreementbetween theC ou nty and a loc alhos pital.
0
5
10
15
20
25
30
35
40
45
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Mill
ion
s
FiscalYear
GeneralFundFundBalanceT rend
2g
Expens es for GeneralGovernmentinc reas ed d u e to an inc reas e in expens es for S u pervis or of Elec tions for pollworkers hired bec au s e itwas a pres id entialelec tion year. There was als o an inc reas e in expens es forthe P ropertyA pprais erd u e to the trans ferofprogrammingand res pons ibilityformaintenanc e ofas oftware program from the B oardto the P roperty A pprais er’ s offic e.
P u blic S afety expens es inc reas ed d u e to an inc reas e in c ontrac ts ervic es u tilized by the B oard forpu blic s afety. TheC ou nty pays the D epartmentofJu s tic e a c os ts hare forC ou nty and S tate ju venile d etention. A c os ts ettlementwaspaid d u ringthe c u rrentyearof$236, 0 0 0 and the regu larmonthlyc harges forfis c alyear20 15-16 was higher. Expens esofthe B oard and S heriffals o inc reas ed d u e to healthins u ranc e, retirements and otherpers onnel-related c os ts .
Trans portation expens es inc reas ed d u e to the inc reas es in pers onals ervic es whic h inc lu d es health ins u ranc e andretirement. P rofes s ionaland c ontrac ts ervic es als o inc reas ed from prioryear.
H u man S ervic es expens es d ec reas ed d u e to an agreementbetween H ernand o C ou nty and the S tate ofFlorid a in theprior fis c alyear whereby the C ou nty paid $1 . 6 million to be u s ed to inc reas e the provis ion of health s ervic es forM ed ic aid , u nins u red and u nd er-ins u red people ofthe C ou nty. There were no s u c hpayments in the c u rrentyear.
C apitalO u tlay expens es inc reas ed d u e to grant-related expend itu res .
The Transportation Tru stFu nd fu nd balanc e d ec reas ed $3, 0 47 , 38 0 , or11% . Revenu es from taxes inc reas ed 1 7 %from prioryeard u e to an inc reas e in gas taxes . The inc reas e in Trans portation expens e of8 % was offs etbyad ec reas ein C apitalO u tlay of s lightly les s than 8 % . P ers onals ervic es , inc lu d ing health ins u ranc e and retirementexpens esinc reas ed from prior year. Variou s operating expens es inc lu d ing profes s ionaland c ontrac ts ervic es , u tilities andins u ranc e, als o inc reas ed s lightly. C ons tru c tion d ec reas ed s lightly c ompared to fis c alyear20 14-15.
In the Im pac tFee Fu nd , the fu nd balanc e d ec reas ed 5% , bu twas s tilla 93% improvementoverthe prior year’ sd ec reas e. Impac tFee Fu nd revenu es inc reas ed 8 % and Impac tFee Fu nd expend itu res d ec reas ed 8 0 % .
The H ernand o C ou nty Fire Resc u e-Fire fu nd balanc e d ec reas ed $2 , 641 , 7 59, or8 9% . Revenu e inc reas ed 6% fromthe prioryear. Expens es inc reas ed 1% to maintain enhanc ed s taffing levels forthe fire d epartment. A loan in theamou ntof $3, 7 50 , 0 0 0 was provid ed by the GeneralFu nd to the Fire Fu nd to meetits obligations . C hanges to thefu nd ingmethod ologyforthe Fire Fu nd are in the proc es s ofapproval, bu twillnotimpac tthe fu nd ’ s revenu es u ntilfis c alyear20 1 7 -1 8 .
P roprietary Fu nd s
The W aterand S ewerD istric texperienc ed an inc reas e in netpos ition of$7 , 633, 1 8 3 c ompared to prioryear’ s inc reas eof $5, 311 , 0 0 4. O perating revenu es of $31 , 562 , 7 36 les s operating expens es of $26, 2 12 , 466 res u lted in operatinginc ome of$5, 350 , 2 7 0 . O perating revenu es inc reas ed 1 0 % from prioryeard u e to inc reas ed waterc ons u mption andthe phas ed in inc reas e in rates as partofa five-yearrate plan. O peratingexpens es inc reas ed 8 % d u e to an inc reas ein pers onals ervic es and other s ervic es and c harges . The inc reas es were mainly attribu ted to health ins u ranc e,retirementc os ts and repairs and maintenanc e. A was tewatertreatmentplantwas als o d ec ommis s ioned d u ring theyear. N on-operating Revenu es (Expens es )d ec reas ed 9% d u e to a d ec line in interes texpens e and a los s on as s etsoverthe prioryear. The c apitalas s etB u ild ings forB u s ines s -Type ac tivities inc reas ed by$5 million d u e to the pu rc has eofa new ad minis tration bu ild ing.
A viation O perations experienc ed an inc reas e in netpos ition of$1 , 90 8 , 7 1 1 . O peratingrevenu es of$1 , 8 49, 57 6 les soperating expens es of$2 , 443, 244 res u lted in an operating los s of$593, 668 . O perating revenu e inc reas ed 1 1% fromprioryeard u e to an inc reas e in land and bu ild ingleas es . O peratingexpens es inc reas ed 1 0 % from the prioryear. Theoperatinglos s was offs etby $2 , 8 1 7 , 0 49 rec eived in C apitalGrants and C ontribu tions , whic hwas mainly c ompris ed ofgrants rec eived to c ons tru c tairporthangars atthe H ernand o C ou nty A irport.
The W aste M anagem entfu nd had an inc reas e in netpos ition of $2 , 0 8 7 , 0 7 6 c ompared to prioryear’ s inc reas e of$4, 7 52 , 67 2 . This is mainly d u e to an inc reas e in the es timated long term c are c os ts ofthe land fill. Thes e c os ts mayvary bas ed u pon the mos trec entinformation available when d eterminingthe c os tes timates .
B u ild ing D epartm entexperienc ed an inc reas e in netpos ition of $31 7 , 2 14 c ompared to prior year’ s inc reas e of$390 , 663. O peratingRevenu es inc reas ed 16% from the prioryeard u e to an inc reas e in L ic ens es and P ermits revenu e.
2h
O peratingExpens es inc reas ed 26% from the prioryeard u e to remod elingto provid e amore effic ientworks pac e. Thisres u lted in operatinglos s of$244, 552 .
B UD GETA RY H IGH L IGH TS –GENERA L FUND
B u d getand ac tu alc omparis on s tatements are provid ed in the S tatementofRevenu es , Expend itu res and C hanges inFu nd B alanc es – B u d getand A c tu alfor the GeneralFu nd and allmajor s pec ialrevenu e fu nd s with annu allyappropriated bu d gets . S ee page 12 ofthis reportforthe financ ials tatementd is c u s s ed below. This s tatements howsthe originalbu d get, finalbu d get, ac tu alamou nts , and the varianc es between ac tu aland finalbu d geted amou nts .B u d getamend ments are approved throu ghou tthe year. B u d gets are revis ed fora variety ofreas ons , s u c h as newgrantaward s , u nantic ipated revenu e s ou rc es , new bond orloan proc eed s , u nfores een expend itu res , etc . B elow areavarietyofexplanations ofthe notable varianc es between the originaland finalbu d get, and the finalbu d getand ac tu alamou nts in the GeneralFu nd :
A c tu alad -valorem taxes c ollec ted forthe GeneralFu nd were 2% higherthan bu d geted . Forfis c alyear20 15-16,ad -valorem taxes were bu d geted at95% of the totalc ollec tible balanc e to allow for d elinqu enc ies and non-paymentoftaxes .
Intergovernmentalrevenu e s ou rc es were 14% les s than bu d geted d u e in partto the mannerin whic hgrantfu nd sare bu d geted . Grants thatmay extend overmu ltiple years are bu d geted in fu llthe firs tyearand are red u c ed eac hyearby the amou ntof grantfu nd s previou s ly rec ognized . This c au s es a varianc e between the bu d geted andac tu algrantac tivity.
C harges forS ervic es revenu e was 8 % higherthan bu d get. A portion ofthis inc reas e is d u e to ad d itionalrec ord ingfees rec eived bythe C lerkofC ou rt& C omptrollerrelatingto the remainings inkhole c laim reports filed by C itizensP ropertyIns u ranc e. In 2 0 15-16 the C lerkrec eived approvalto proc es s pas s ports atits s atellite loc ation in S pringH illres u ltingin $26, 0 0 0 in ad d itionalrevenu e.
Interes trevenu e was 40 % higherthan bu d getd u e to yield s on inves tments averaging 40 % higherin fis c alyear20 15-16.
M is c ellaneou s revenu e was 12% higherthan bu d getd u e to fu nd s rec eived bythe C ou ntyfrom the s ale ofs u rplu sland .
The originalbu d getforC u ltu re & Rec reation expend itu res inc reas ed 9% d u e to u nexpec ted fac ilities maintenanc ec os ts forbu ild ingimprovements of$115, 0 0 0 , u nc apitalized eq u ipmentand variou s operatingc os ts .
The originalbu d getfor C apitalO u tlay expend itu res inc reas ed 114% d u e to the bu d geting of grant-relatedexpend itu res formas s trans itof$1 million as wellas an inc reas e in c apitalou tlay c os ts forthe S heriff.
The originalbu d getforTrans fers In inc reas ed 7 0 % d u e to a bu d geted trans ferto variou s board d epartments forthe ad ju s tmentto the leas e payments forvehic les from an InternalS ervic e Fu nd .
A c tu alexpend itu res for GeneralGovernmentwere 6% les s than bu d geted d u e to pers onal, profes s ionalandc ontrac ts ervic es being u nd erbu d getby $590 , 0 0 0 . In ad d ition, otheroperating c os ts inc lu d ing u tilities , repairsand maintenanc e c os ts and ins u ranc e premiu ms were u nd erbu d get.
A c tu alexpend itu res for P u blic S afety were 4% les s than bu d geted mainly d u e to the C ou nty bu d geting fora$91 8 , 0 0 0 grantto retrofits helters atmu ltiple s c hoolbu ild ings . W orkon this grantis now antic ipated forfis c alyear20 16-1 7 . There were als o pers onnelvac anc ies and les s overtime inc u rred by the pers onnelof the S heriff’ soffic e.
A c tu alexpend itu res for Trans portation were 23% les s than bu d geted mainly d u e to c ontrac ts ervic es for thead minis tration and operation ofthe mas s trans its ys tem being u nd erbu d get. C ontrac tc os ts are tied to revenu egenerated by the s ys tem . N ew trans itrou tes were ad d ed in Janu ary whic h was s lightly later than initiallyantic ipated . In ad d ition, the maintenanc e c os ts relatingto the bu s es were lowerthan expec ted .
2i
A c tu alexpend itu res forEc onomic Environmentwere 57 % les s than the finalbu d getd u e to d ec line in applic antswho metthe q u alific ations of the N eighborhood S tabilization P rogram . This grant-fu nd ed program provid esas s is tanc e ford own payments and rehabilitation c os ts ofhomes forc itizens who meetthe program qu alific ations .
A c tu alexpend itu res forC u ltu re and Rec reation were 14% les s than the finalbu d getd u e to variou s operatingexpens es , inc lu d ing u tilities , repairs and maintenanc e and ins u ranc e premiu ms , being les s than antic ipated .P ers onaland c ontrac ts ervic es were $20 9, 0 0 0 les s than bu d geted .
A c tu alexpend itu res forC apitalO u tlay were 33% les s than bu d geted for20 15-16 d u e to a d elay in expend itu resforvehic les and eq u ipmentforthe mas s trans its ys tem .
C A P ITA L A S S ET A ND D EB T A D M INIS TRA TIO N
C apitalA ssets
H ernand o C ou nty’ s inves tmentin c apitalas s ets forits governmentaland bu s ines s -type ac tivities as ofS eptember30 ,2 0 16, amou nts to $60 6, 0 0 2 , 0 67 netof ac c u mu lated d eprec iation. This inves tmentin c apitalas s ets inc lu d es land ,bu ild ings , infras tru c tu re, improvements otherthan bu ild ings , eq u ipment, c ons tru c tion in progres s and intangible as s ets .The totalinc reas e in H ernand o C ou nty’ s inves tmentin c apitalas s ets from the prioryearwas 3% whic h is c ompris edofa 0 . 0 5% inc reas e forgovernmentalac tivities and a 7 % inc reas e forbu s ines s -type ac tivities .
Followingis as c hed u le ofthe C ou nty’ s c apitalas s ets , netofac c u mu lated d eprec iation, as ofS eptember30 , 2 0 15 and20 16:
GovernmentalA c tivities B u s ines s -Type A c tivities Totals
2 0 15 20 16 2 0 15 20 16 2 0 15 20 16
L and $ 29, 51 0 , 7 92 $ 29, 338 , 7 29 $ 8 , 38 0 , 60 1 $ 1 0 , 2 0 0 , 561 $ 37 , 8 91 , 393 $ 39, 539, 290
B u ild ings 91 , 150 , 40 4 8 8 , 1 2 2 , 352 1 0 , 340 , 152 15, 130 , 2 7 2 1 0 1 , 490 , 556 10 3, 252 , 624
Infras tru c tu re 1 8 6, 57 2 , 2 8 4 1 8 8 , 7 7 8 , 346 2 , 255, 242 2 , 1 8 4, 191 1 8 8 , 8 2 7 , 526 190 , 962 , 537
ImprovementsotherthanB u ild ings 11 , 7 0 3, 47 8 1 1 , 324, 390 1 8 7 , 659, 40 1 1 8 4, 7 8 4, 195 199, 362 , 8 7 9 196, 1 0 8 , 58 5
Eq u ipment 1 8 , 0 62 , 40 8 2 0 , 58 3, 37 3 3, 0 31 , 7 94 2 , 98 1 , 236 21 , 0 94, 2 0 2 23, 564, 60 9
C ons tru c tionin P rogres s 1 , 68 4, 90 5 496, 57 3 36, 995, 2 8 4 51 , 416, 8 7 4 38 , 68 0 , 1 8 9 51 , 913, 447
IntangibleA s s ets 7 8 4, 8 7 4 660 , 97 5 - - 7 8 4, 8 7 4 660 , 97 5
Total $ 339, 469, 145 $ 339, 30 4, 7 38 $ 248 , 662 , 47 4 $ 266, 697 , 329 $ 58 8 , 131 , 619 $ 60 6, 0 0 2 , 0 67
A d d itionalinformation on H ernand o C ou nty’ s c apitalas s ets c an be fou nd in N ote F to the bas ic financ ials tatements .The inc reas e in c apitalas s etac tivity for20 16 oc c u rred in the GovernmentalA c tivities primarily d u e to the c ompletionof c ons tru c tion projec ts whic h c ontribu ted to the inc reas es in Infras tru c tu re and Eq u ipment. For B u s ines s -TypeA c tivities , Improvements otherthan bu ild ings , Infras tru c tu re and Eq u ipmentd ec reas ed d u e to d eprec iation. There wasan inc reas e in c apitalas s etac tivity relating to C ons tru c tion in P rogres s in fis c alyear 20 16 and an inc reas e of$4, 7 90 , 1 2 0 in B u ild ings , mos tlyas s oc iated withthe pu rc has e ofanew ad minis tration bu ild ingbythe W aterand S ewerD is tric t.
2j
D ebtA d m inistration
L oans and notes payable amou nted to $8 7 , 591 , 0 1 2 of whic h $29, 8 52 , 2 1 7 is for GovernmentalA c tivities and$57 , 7 38 , 7 95 is forB u s ines s -Type A c tivities . L oans forbu s ines s -type ac tivities inc lu d e $55, 7 96, 0 67 offinanc ing fromthe S tate RevolvingL oan program forwater& s ewerimprovementprojec ts .
H ernand o C ou nty had totalbond ed d ebtou ts tand ing of $39, 912 , 7 7 3. A llof thes e bond s repres entbond s s ec u reds olely by s pec ified non-ad valorem revenu e s ou rc es (i. e. , revenu e bond s ).
Following is the ac tivity of c ombined governmentaland bu s ines s -type d ebtforthe fis c alyearend ed S eptember30 ,2 0 16:
B eginningB alanc e A d d itions Red u c tions
End ingB alanc e
L oans & N otes P ayable $ 7 2 , 2 0 5, 8 8 9 $ 19, 190 , 2 1 7 3, 8 0 5, 0 94 8 7 , 591 , 0 1 2
L eas es P ayable 54, 143 - 54, 143 -
Revenu e B ond s 43, 546, 254 - 3, 633, 48 1 39, 912 , 7 7 3$ 115, 8 0 6, 2 8 6 $ 19, 190 , 2 1 7 7 , 492 , 7 1 8 1 2 7 , 50 3, 7 8 5
The C ou nty trad itionally ins u red its bond ed d ebt, and c ons eq u ently, the C ou nty’ s bond s have his toric ally maintainedan ins u red rating of “A aa”from M ood y’ s and “A A A ”from S tand ard & P oor’ s and Fitc h. The C ou nty als o obtainedu nd erlying ratings d u ring the is s u anc e of three of its bond s . In ad d ition to ins u ring the C apitalImprovementandRefu nd ing Revenu e B ond s , S eries 2 0 0 4, the C ou nty obtained an originalu nd erlying rating of “A -”from S tand ard &P oor’ s and “A 2”from M ood y’ s . In ad d ition to ins u ring the N on-A d Valorem Refu nd ing Revenu e B ond s , S eries 2 0 10 ,the C ou nty obtained an originalu nd erlyingratingof“A ”from S tand ard & P oor’ s and “A 2”from M ood y’ s . In ad d ition toins u ring the W aterand S ewerRefu nd ing Revenu e B ond s , S eries 2 0 13A , the C ou nty obtained an originalu nd erlyingratingof“A A -" from Fitc h, “A a3”from M ood y’ s , and “A +”from S tand ard & P oor’ s .
Followingare the C ou nty’ s u nd erlyingratings as ofS eptember30 , 2 0 16:
M ood y’ s Fitc h S & P
C apitalImprovementand Refu nd ingRevenu eB ond s , S eries 20 0 4 A a3 N R A +
N on-A d Valorem Refu nd ingRevenu e B ond s ,S eries 20 1 0 A a3 N R A +
W aterand S ewerRefu nd ingRevenu e B ond s ,S eries 20 13A A a3 A A - A A -
N R repres ents N o Rating. A d d itionalinformation on H ernand o C ou nty’ s long-term d ebtc an be fou nd in N ote H to thebas ic financ ials tatements .
EC O NO M IC FA C TO RS A ND NEXT YEA R’ S B UD GET
L oc al, s tate and nationalec onomic fac tors influ enc e the C ou nty’ s revenu es in a variety ofways . P os itive ec onomicgrowth c orrelates with inc reas ed revenu es from property taxes , s ales taxes , fu eltaxes , c harges fors ervic es , s taterevenu e s haring as wellas s tate and fed eralgrants . D epres s ed ec onomic growth c orrelates with d ec reas es in thes ame revenu e s ou rc es .
E c onomic growth may be meas u red by a variety of ind ic ators s u c h as employmentgrowth, u nemployment, newc ons tru c tion and as s es s ed valu es , d ivers ific ation of the property tax bas e, enterpris e fu nd revenu e and netas s etgrowth.
H ernand o C ou nty’ s popu lation grew from 157 , 0 0 6 in 20 0 6 to 1 7 9, 50 3 in 20 16, a 14% inc reas e overa period of10 years .
2k
Unemploymentin H ernand o C ou nty d ec reas ed to an average of 6. 2% and the C ou nty’ s pers onalinc ome perc apita inc reas ed s lightly to $33, 666 in 20 15, the mos trec entyearavailable.
Totaltaxable property valu e has d ec reas ed 23% overthe las t10 years and inc reas ed 6% overtax year20 13,whic hwas the lowes ttaxable valu e in rec enthis tory.
Res id entiald evelopmenthas experienc ed a s ignific antd ec reas e in prioryears overthe s taggering growth ratesofthe previou s years . D u ringthis s ame time period , c ommerc iald evelopmenthas notexperienc ed d ec reas es ass ignific ant. M any large res id entialprojec ts c ons id ered a “D evelopmentofRegionalImpac t, ”orD RI, have beenapproved by the B oard and the S tate of Florid a overthe las tfive years . W hen the ec onomy improves , thes ed evelopments willc ommenc e and have a s ignific antly pos itive impac ton the C ou nty. The nu mberof bu ild ingpermits is s u ed in 20 15-16 inc reas ed 4% from prioryear.
Forfis c alyear20 15-16 bu d get, taxable propertyvalu es inc reas ed $20 0 million or2 . 8 % to approximately$7 . 38 4 billion.The GeneralFu nd millage was 6. 9912 . The inc reas e in propertyvalu es meantan ad d itional$1 . 4 million in revenu e tothe GeneralFu nd . D u e to the inc reas e in property valu es , the C ou nty was able to maintain the s ame millage rate asthe previou s year. D u ringfis c alyear20 15-16, the ZoningD epartment, previou s lyan Enterpris e Fu nd , was moved intothe GeneralFu nd .
Forfis c alyear20 16-1 7 bu d get, taxable propertyvalu es inc reas ed $30 1 million or4. 1% to approximately$7 . 68 5 billion.The GeneralFu nd millage is 6. 9912 . The inc reas e in property valu es means an ad d itional$2 . 1 million in revenu e tothe GeneralFu nd . D u e to the inc reas e in property valu es , the C ou nty was able to maintain the s ame millage rate asthe previou s year. A 19% inc reas e in the ins u ranc e premiu ms res u lted in a $37 6, 0 0 0 impac tto the GeneralFu nd andthe C ou nty opened a W ellnes s C enter, trans ferring$454, 0 0 0 ou tofthe GeneralFu nd fortheirproportionate s hare.
The C ou nty has c ontinu ed to meetits GeneralFu nd fu nd balanc e res erve req u irements of 1 8 . 5% (S ee N ote A ,GovernmentalFu nd B alanc e C las s ific ation)s inc e ad option ofthe polic y, and is antic ipating the s ame forfis c alyear20 1 7 -1 8 . Forfis c alyear20 16-1 7 , in ad d ition to the 1 8 . 5% res erve requ irementin the GeneralFu nd whic heq u ates toapproximately$14 million, the C ou ntys etas id e $3 million to meetO therP os tEmploymentB enefit(O P E B )obligations .
TO O B TA IN FURTH ER INFO RM A TIO N
This financ ialreportwas d es igned to provid e an overview ofthe C ou nty’ s financ es . Ifyou have any qu es tions c onc erningbu d gets , long-term financ ialplanning, orothers u bjec ts related to the managementofC ou nty operations , pleas e c ontac ttheC ou nty A d minis tratorat:
H ernand o C ou nty20 N M ain S treetB rooks ville, Florid a 3460 1(352)7 54-40 0 0ad minis tration@ hernand oc ou nty. u s
Ifyou have anyq u es tions c onc erningfinanc ialreports orotherac c ou ntinginformation in this report, pleas e c ontac tthe O ffic eofthe C lerkand C omptroller, D irec torofFinanc ialS ervic es at:
H ernand o C ou nty20 N . M ain S treetB rooks ville, Florid a 3460 1(352)7 54-420 1c lerkfinanc e@ hernand oc lerk. org
Itis als o s u gges ted you vis itou r webs ite atwww. hernand oc ou nty. u s for generalinformation abou tthe C ou nty, andwww. hernand oc lerk. c om forad d itionalfinanc ialinformation.
Basic Financial Statements
ASSETS
Cash and Cash Equivalents $ 8,406,895 $ 193,136 $ 8,600,031
Pooled Cash and Investments 101,415,842 65,303,897 166,719,739
Cash with Fiscal Agent 5,804,433 1,693,871 7,498,304
Accounts Receivable (net) 2,776,299 4,042,417 6,818,716
Internal Balances (3,298,838) 3,298,838 -
Due from Other Governments 4,757,349 3,604,962 8,362,311
Inventories 39,989 334,903 374,892
Prepaid Items 768,465 23,111 791,576
Capital Assets, net of accumulated
depreciation:
Land 29,338,729 10,200,561 39,539,290
Buildings 88,122,352 15,130,272 103,252,624
Infrastructure 188,778,346 2,184,191 190,962,537
Improvements Other than Buildings 11,324,390 184,784,195 196,108,585
Equipment 20,583,373 2,981,236 23,564,609
Construction in Progress 496,573 51,416,874 51,913,447
Intangible Assets 660,975 - 660,975
Prepaid Bond Insurance - 55,664 55,664
Total Assets $ 459,975,172 $ 345,248,128 $ 805,223,300
Deferred Outflows of Resources $ 50,341,515 $ 4,872,635 $ 55,214,150
LIABILITIES
Accounts Payable 4,613,805 1,731,673 6,345,478
Retainage Payable 181,245 - 181,245
Accrued Liabilities 3,367,721 1,628,164 4,995,885
Due to Other Governments 732,542 44,328 776,870
Unearned Revenue 2,105,177 370,179 2,475,356
Deposits 293,118 3,387,131 3,680,249
Payable from Restricted Assets:
Accounts Payable - 2,635,748 2,635,748
Retainage Payable - 672,143 672,143
Non-Current Liabilities:
Due Within One Year:
Loans & Notes Payable 2,605,115 1,339,552 3,944,667
Bonds Payable 1,272,643 2,483,783 3,756,426
Compensated Absences 6,639,642 722,673 7,362,315
Claims Liabilities 2,932,042 - 2,932,042
Due In More Than One Year:
Loans & Notes Payable 27,247,102 56,399,243 83,646,345
Bonds Payable 2,691,440 33,464,907 36,156,347
Compensated Absences 913,833 71,473 985,306
Other Post Employment Benefits 9,057,923 856,767 9,914,690
Net Pension Liability 114,033,132 7,917,107 121,950,239
Claims Liabilities 650,000 - 650,000
Unearned Revenue - 1,488,348 1,488,348
Accrued Landfill Closure/Postclosure - 4,355,651 4,355,651
Total Liabilities $ 179,336,480 $ 119,568,870 $ 298,905,350
The notes to the financial statements are an integral part of this statement.
Governmental Business-Type
HERNANDO COUNTY, FLORIDA
STATEMENT OF NET POSITION
September 30, 2016
Activities Activities Total
3
Deferred Inflows of Resources $ 4,396,732 $ 247,331 $ 4,644,063
NET POSITION
Net Investment in Capital Assets $ 306,373,129 $ 175,885,969 $ 482,259,098
Restricted for:
Grant Funded Programs 895,840 895,840
Court Programs 5,378,738 5,378,738
Special Assessment Projects 321,087 321,087
Environment Conservation 11,193,547 11,193,547
Bond Covenants or Debt Service 1,475,476 1,475,476
Public Safety 10,839,707 10,839,707
Capital Projects 28,900,729 8,718,447 37,619,176
Renewal and Replacement 4,034,245 4,034,245
Other Purposes 3,470,846 3,470,846
Unrestricted (Deficit) (42,265,624) 41,665,901 (599,723)
Total Net Position $ 326,583,475 $ 230,304,562 $ 556,888,037
Activities Activities Total
HERNANDO COUNTY, FLORIDA
STATEMENT OF NET POSITION
September 30, 2016
Governmental Business-Type
4
Function/Program Activities
Governmental Activities:
General Government $ 24,582,691 $ 12,049,578 $ 2,500 $ 468,949 $ (12,061,664) $ - $ (12,061,664)
Public Safety 86,581,625 31,167,565 449,828 293,168 (54,671,064) - (54,671,064)
Physical Environment 1,230,350 345,018 6,196 - (879,136) - (879,136)
Transportation 23,236,377 5,398,087 2,705,656 584,849 (14,547,785) - (14,547,785)
Economic Environment 3,095,345 17 911,513 - (2,183,815) - (2,183,815)
Human Services 7,274,535 250,202 33,012 73,597 (6,917,724) - (6,917,724)
Culture and Recreation 5,715,518 915,062 417,864 356,971 (4,025,621) - (4,025,621)
Court Operations 6,772,680 4,832,250 408,449 - (1,531,981) - (1,531,981)
Interest on Long-term Debt 1,037,630 - - - (1,037,630) - (1,037,630)
Total Governmental Activities 159,526,751 54,957,779 4,935,018 1,777,534 (97,856,420) - (97,856,420)
Business-type Activities:
Water and Sewer District 27,672,539 31,031,533 85,125 2,489,020 - 5,933,139 5,933,139
Aviation Operations 2,567,431 1,806,441 8,406 2,817,049 - 2,064,465 2,064,465
Waste Management 6,446,772 7,653,166 - - - 1,206,394 1,206,394
Building Department 2,786,446 2,970,147 - - - 183,701 183,701
Total Business-type Activities 39,473,188 43,461,287 93,531 5,306,069 - 9,387,699 9,387,699
Total $ 198,999,939 $ 98,419,066 $ 5,028,549 $ 7,083,603 (97,856,420) 9,387,699 (88,468,721)
General Revenues:
Property Taxes 61,571,869 - 61,571,869
Fuel Taxes 8,146,046 - 8,146,046
Sales Tax 9,100,041 - 9,100,041
Other Taxes 2,559,915 - 2,559,915
State Shared Revenue - Unrestricted 4,889,134 - 4,889,134
Investment Earnings 1,437,246 701,309 2,138,555
Gain on Sale of Capital Assets 348,854 28,086 376,940
Miscellaneous 1,377,544 818,072 2,195,616
Transfers (997,512) 997,512 -
Total General Revenues and Transfers 88,433,137 2,544,979 90,978,116
Change in Net Position (9,423,283) 11,932,678 2,509,395
Net Position - Beginning 336,006,758 218,371,884 554,378,642
Net Position - Ending $ 326,583,475 $ 230,304,562 $ 556,888,037
The notes to the financial statements are an integral part of this statement.
HERNANDO COUNTY, FLORIDA
STATEMENT OF ACTIVITIES
For the Fiscal Year Ended September 30, 2016
Net (Expense) Revenue and
Program Revenues Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-type
TotalExpenses Services Contributions Contributions Activities Activities
5
Impact Fees
Capital Project
ASSETS
Cash and Cash Equivalents $ 3,312,348 $ 395 $ -
Pooled Cash and Investments 17,368,553 23,818,126 9,348,586
Cash with Fiscal Agent - 347,516 134,613
Accounts Receivable (net) 331,987 11,625 -
Due from Other Funds 180,557 79,129 -
Due from Other Governments 2,361,016 1,784,331 952
Advances to Other Funds 4,200,000 - -
Inventories - - -
Prepaid Items 369,844 - -
Total Assets $ 28,124,305 $ 26,041,122 $ 9,484,151
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
Liabilities
Accounts Payable $ 1,441,360 $ 712,244 $ 81,173
Retainage Payable 74,356 90,000 6,958
Accrued Liabilities 2,030,211 105,995 -
Due to Other Funds 516,257 - -
Due to Other Governments 241,995 - -
Unearned Revenue 167,876 - 1,514,620
Deposits 133,860 1,148 -
Advances from Other Funds - - -
Total Liabilities 4,605,915 909,387 1,602,751
Deferred Inflows of Resources
Unavailable Revenue 844,103 800,565 -
Fund Balances
Nonspendable:
Advances 4,200,000 - -
Inventories - - -
Prepaid Items 369,844 - -
Restricted for:
Grant Funded Programs 341,171 - -
Court Programs - - -
Special Assessment Projects - - -
Environment Conservation - - -
Bond covenants or debt service - 88,572 -
Public Safety - - -
Capital Projects - 18,941,946 7,881,400
Other Purposes - - -
Committed to:
Budgeted Emergency and Contingency Reserves 2,674,181 - -
Budgeted Stabilization Reserves 2,646,158 - -
Other Purposes - - -
Assigned to:
Economic Development - - -
Capital Projects - 5,300,652 -
Budgeted Post Employment Reserves 3,000,000 - -
Other Purposes - - -
Unassigned 9,442,933 - -
Total Fund Balances 22,674,287 24,331,170 7,881,400
Total Liabilities, Deferred Inflows of Resourcesand Fund Balances $ 28,124,305 $ 26,041,122 $ 9,484,151
The notes to the financial statements are an integral part of this statement.
Fund
General Trust
HERNANDO COUNTY, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
September 30, 2016
and Gas Taxes Fund
Transportation
6
$ 150 $ 4,893,282 $ 8,206,175
4,190,535 32,783,703 87,509,503
- - 482,129
4,187 2,359,624 2,707,423
257,393 113,074 630,153
12,616 598,385 4,757,300
- - 4,200,000
- 1,800 1,800
9,507 45,887 425,238
$ 4,474,388 $ 40,795,755 $ 108,919,721
$ 56,080 $ 563,014 $ 2,853,871
- 9,931 181,245
351,261 291,106 2,778,573
- 530,760 1,047,017
- 490,547 732,542
- 64,015 1,746,511
- 158,110 293,118
3,750,000 532,000 4,282,000
4,157,341 2,639,483 13,914,877
- 1,363,405 3,008,073
- - 4,200,000
- 1,800 1,800
9,507 45,887 425,238
- 500,859 842,030
- 5,378,738 5,378,738
- 321,087 321,087
- 11,193,547 11,193,547
- 1,386,904 1,475,476
307,540 9,200,984 9,508,524
- 1,317,303 28,140,649
- 3,394,755 3,394,755
- - 2,674,181
- - 2,646,158
- 1,247,224 1,247,224
- 1,843,905 1,843,905
- 849,168 6,149,820
- 3,000,000
- 110,706 110,706
- - 9,442,933
317,047 36,792,867 91,996,771
$ 4,474,388 $ 40,795,755 $ 108,919,721
Hernando County
Funds Funds
Governmental Governmental
Fire Rescue-Fire
Nonmajor Total
7
Fund Balances - Total Governmental Funds $ 91,996,771
Amounts reported for Governmental Activities in the Statement of Net
Position are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the governmental funds:
Governmental Capital Assets $ 511,662,726
Less Accumulated Depreciation (183,905,268) 327,757,458
Unearned revenue and deferred outflows of resources are not
available to pay for current-period expenditures and are therefore
not reported in the governmental funds:
Unearned Revenue $ 3,008,073
Deferred Charges on Debt Refunding 884,691
Deferred Charges on Pension 49,196,020 53,088,784
Long-term liabilities are not due and payable in the current period,
and therefore are not reported in the governmental funds:
Accrued Liabilities - Interest $ (192,619)
Loans and Notes Payable (29,852,217)
Bonds Payable (3,964,083)
Compensated Absences (7,493,582)
Other Post Employment Benefits (8,994,554)
Net Pension Liability (113,394,756) (163,891,811)
Deferred inflows of resources apply fo a future period and will not
be recognized as revenue until then:
Deferred Revenue on Pension (4,385,566)
Internal Service Funds are used by management to charge the costs
of certain activities to the individual funds:
Net position of the Internal Service Funds that is reported
in the Governmental Activities portion of the Statement
of Net Position. 24,815,994
Accumulated net position of the Internal Service Funds is allocated
between governmental activities and business-type activities. Internal
Service Fund net position allocated to business-type activities. (2,798,155)
Net Position of Governmental Activities $ 326,583,475
The notes to the financial statements are an integral part of this statement.
HERNANDO COUNTY, FLORIDA
RECONCILIATION OF THE BALANCE SHEET-GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
September 30, 2016
8
Impact Fees
Capital Project
Revenues
Taxes $ 51,800,500 $ 13,054,857 $ -
Licenses and Permits 363,882 1,455 -
Intergovernmental 17,392,796 3,369,244 -
Charges for Services 10,791,186 933,684 -
Fines and Forfeitures 76,420 - -
Special Assessments - - -
Impact Fees - - 1,299,423
Interest 402,933 329,150 80,534
Miscellaneous 1,507,647 103,161 -
Total Revenues 82,335,364 17,791,551 1,379,957
Expenditures
Current
General Government 19,799,462 - -
Public Safety 44,253,671 - 5,135
Physical Environment 264,339 - -
Transportation 2,039,001 11,720,849 -
Economic Environment 468,929 - -
Human Services 4,047,107 - -
Culture and Recreation 4,651,780 87 -
Court Operations 1,223,902 - -
Debt Service
Principal 469,465 - -
Interest and Fiscal Charges 116,433 - -
Capital Outlay 2,764,664 8,057,245 1,269,018
Total Expenditures 80,098,753 19,778,181 1,274,153
Excess of Revenues Over (Under) Expenditures 2,236,611 (1,986,630) 105,804
Other Financing Sources (Uses)
Transfers In 1,192,360 1,784,881 -
Transfers Out (4,092,519) (2,845,631) (486,512)
Additions to Long-Term Debt - - -
Total Other Financing Sources (Uses) (2,900,159) (1,060,750) (486,512)
Net Change in Fund Balances (663,548) (3,047,380) (380,708)
Fund Balances at Beginning of Year 23,337,835 27,378,550 8,262,108
Fund Balances at End of Year $ 22,674,287 $ 24,331,170 $ 7,881,400
The notes to the financial statements are an integral part of this statement.
Fund and Gas Taxes Fund
General Trust
HERNANDO COUNTY, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Transportation
For the Fiscal Year Ended September 30, 2016
9
$ - $ 7,259,998 $ 72,115,355
80,717 - 446,054
61,850 3,091,781 23,915,671
93,780 14,584,488 26,403,138
84 1,466,725 1,543,229
18,261,329 2,142,799 20,404,128
- - 1,299,423
88,527 380,218 1,281,362
200,502 741,538 2,552,848
18,786,789 29,667,547 149,961,208
- 1,471,668 21,271,130
22,241,916 12,206,586 78,707,308
- 829,879 1,094,218
- 1,171,821 14,931,671
- 2,562,444 3,031,373
- 1,472,558 5,519,665
- 106,211 4,758,078
- 5,360,809 6,584,711
-
122,537 3,262,223 3,854,225
24,543 836,679 977,655
- 1,384,628 13,475,555
22,388,996 30,665,506 154,205,589
(3,602,207) (997,959) (4,244,381)
1,103,857 6,907,768 10,988,866
(143,409) (1,901,241) (9,469,312)
- 756,845 756,845
960,448 5,763,372 2,276,399
(2,641,759) 4,765,413 (1,967,982)
2,958,806 32,027,454 93,964,753
$ 317,047 $ 36,792,867 $ 91,996,771
Governmental
Total
Funds
Governmental
Nonmajor
FundsFire Rescue-Fire
Hernando County
10
Net Change in Fund Balances - Total Governmental Funds $ (1,967,982)
Amounts reported for Governmental Activities in the Statement of
Activities are different because:
Governmental Funds report Capital Outlays as Expenditures. In
the Statement of Activities, the cost of those assets is depreciated
over their estimated useful lives. Donations of Capital Assets are
not financial resources to Governmental Funds, however increase
net position in the Statement of Activities. Governmental Funds report
the sale of Capital Assets as a financial resource, however in the
Statement of Activities, only the gain/loss on the sale is reported:
Expenditures for Capital Assets $ 13,455,533
Less current year depreciation (15,487,769)
Donation of Capital Assets 177,231
Capital Asset Disposals (92,459) (1,947,464)
Additions to Long-Term Debt provide current financial resources to
Governmental Funds, but issuing debt increases long-term liabilities
in the Statement of Net Position. Repayment of principal and payments
to refunding escrow agents are expenditures/other financing uses
in the Governmental Funds, but reduce long-term liabilities in the
Statement of Net Position:
Additions to Long-Term Debt (756,845)
Principal Payments 3,854,225 3,097,380
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 the Governmental Funds:
Decrease in Accrued Interest on Long-Term Debt $ 5,427
Amortization of current year Bond Discount/Premium 14,698
Amortization of current year Prepaid Bond Insurance (80,101)
Decrease in Compensated Absences 331,415
Increase in Accrued Other Post Employment Benefits (900,032)
Increase in Pension Expenses (6,371,987) (7,000,580)
Some revenues reported in the Statement of Activities do not provide
a current financial resource, and therefore are not reported as
revenue in the Governmental Funds:
Change in earned revenue from grants and contributions 163,578
Change in earned revenue from charges for services 200,397
Change in earned revenue from taxes (24) 363,951
Internal Service Funds are used by management to charge the costs
of certain activities to individual funds. A portion of the Change in Net
Position of the Internal Service Funds is reported within Governmental
Activities. (1,968,588)
Change in Net Position of Governmental Activities $ (9,423,283)
The notes to the financial statements are an integral part of this statement.
HERNANDO COUNTY, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Fiscal Year Ended September 30, 2016
11
HERNANDO COUNTY, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes $ 51,014,466 $ 51,014,466 $ 51,800,500 $ 786,034
Licenses and Permits 325,340 325,340 363,882 38,542
Intergovernmental 17,600,210 20,128,787 17,392,796 (2,735,991)
Charges for Services 10,207,405 10,007,405 10,791,186 783,781
Fines and Forfeitures 81,360 81,360 76,420 (4,940)
Interest 287,700 287,700 402,933 115,233
Miscellaneous 1,253,707 1,347,318 1,507,647 160,329
Total Revenues 80,770,188 83,192,376 82,335,364 (857,012)
Expenditures
Current
General Government 20,543,118 20,976,490 19,799,462 1,177,028
Public Safety 45,520,637 45,880,816 44,253,671 1,627,145
Physical Environment 300,853 280,618 264,339 16,279
Transportation 2,713,830 2,642,597 2,039,001 603,596
Economic Environment 1,026,888 1,096,607 468,929 627,678
Human Services 4,268,653 4,388,912 4,047,107 341,805
Culture and Recreation 4,940,298 5,388,482 4,651,780 736,702
Court Operations 1,227,129 1,235,056 1,223,902 11,154
Debt Service
Principal 469,472 469,471 469,465 6
Interest and Fiscal Charges 78,934 116,434 116,433 1
Capital Outlay 1,915,406 4,104,093 2,764,664 1,339,429
Total Expenditures 83,005,218 86,579,576 80,098,753 6,480,823
Excess of Revenues Over Expenditures (2,235,030) (3,387,200) 2,236,611 5,623,811
Other Financing Sources (Uses)
Transfers In 822,163 1,393,164 1,192,360 (200,804)
Transfers Out (2,953,359) (2,724,046) (4,092,519) (1,368,473)
Reserve for Contingencies (17,474,977) (17,213,321) - 17,213,321
Total Other Financing Sources (Uses) (19,606,173) (18,544,203) (2,900,159) 15,644,044
Net Change in Fund Balance (21,841,203) (21,931,403) (663,548) 21,267,855
Fund Balance at Beginning of Year 22,936,946 23,337,835 23,337,835 -
Fund Balance at End of Year $ 1,095,743 $ 1,406,432 $ 22,674,287 $ 21,267,855
The notes to the financial statements are an integral part of this statement.
Budgeted Amounts
12
HERNANDO COUNTY, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
TRANSPORTATION TRUST AND GAS TAXES
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes $ 12,301,676 $ 13,189,876 $ 13,054,857 $ (135,019)
Licenses and Permits 1,000 1,000 1,455 455
Intergovernmental 2,752,200 7,846,924 3,369,244 (4,477,680)
Charges for Services 950,155 1,001,155 933,684 (67,471)
Special Assessments 115,000 190,400 329,150 138,750
Interest 57,500 87,635 103,161 15,526
Total Revenues 16,177,531 22,316,990 17,791,551 (4,525,439)
Expenditures
Current
Transportation 12,895,829 12,846,224 11,720,849 1,125,375
Culture and Recreation - 60,000 87 59,913
Capital Outlay 14,147,362 16,023,236 8,057,245 7,965,991
Total Expenditures 27,043,191 28,929,460 19,778,181 9,151,279
Excess of Revenues Over Expenditures (10,865,660) (6,612,470) (1,986,630) 4,625,840
Other Financing Sources (Uses)
Transfers In 2,005,000 3,694,108 1,784,881 (1,909,227)
Transfers Out (731,998) (3,046,436) (2,845,631) 200,805
Reserve for Contingencies (18,707,137) (21,849,599) - 21,849,599
Total Other Financing Sources (Uses) (17,434,135) (21,201,927) (1,060,750) 20,141,177
Net Change in Fund Balance (28,299,795) (27,814,397) (3,047,380) 24,767,017
Fund Balance at Beginning of Year 28,299,795 27,814,397 27,378,550 (435,847)
Fund Balance at End of Year $ - $ - $ 24,331,170 $ 24,331,170
The notes to the financial statements are an integral part of this statement.
Budgeted Amounts
13
HERNANDO COUNTY, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
HERNANDO COUNTY FIRE RESCUE - FIRE
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Licenses and Permits $ 53,259 $ 53,259 $ 80,717 $ 27,458
Intergovernmental 58,005 53,000 61,850 8,850
Charges for Services 99,000 99,000 93,780 (5,220)
Fines and Forfeitures - - 84 84
Special Assessments 19,035,512 18,103,431 18,261,329 157,898
Interest 225,612 34,784 88,527 53,743
Miscellaneous - 163,318 200,502 37,184
Total Revenues 19,471,388 18,506,792 18,786,789 279,997
Expenditures
Current
Public Safety 22,669,622 23,038,071 22,241,916 796,155
Debt Service
Principal 122,537 1,054,944 122,537 932,407
Interest and Fiscal Charges 24,544 199,544 24,543 175,001
Capital Outlay 61,800 621,800 - 621,800
Total Expenditures 22,878,503 24,914,359 22,388,996 2,525,363
Excess of Revenues Over Expenditures (3,407,115) (6,407,567) (3,602,207) 2,805,360
Other Financing Sources (Uses)
Transfers In 436,500 998,099 1,103,857 105,758
Transfers Out (181,659) (143,409) (143,409) -
Additions to Long-term Debt - 5,000,000 - (5,000,000)
Reserve for Contingencies (1,283,960) (2,405,929) - 2,405,929
Total Other Financing Sources (Uses) (1,029,119) 3,448,761 960,448 (2,488,313)
Net Change in Fund Balance (4,436,234) (2,958,806) (2,641,759) 317,047
Fund Balance at Beginning of Year 4,436,234 2,958,806 2,958,806 -
Fund Balance at End of Year $ - $ - $ 317,047 $ 317,047
The notes to the financial statements are an integral part of this statement.
Budgeted Amounts
14
ASSETSCurrent Assets Cash and Cash Equivalents $ 190,471 $ 200 $ 1,665 Pooled Cash and Investments 22,869,443 1,118,146 17,575,144 Cash with Fiscal Agent - - - Restricted Cash and Investments: Pooled Cash and Investments 250,556 - 145 Accounts Receivable (net) 3,738,056 43,541 260,820 Due from Other Funds 351,036 - 67,647 Due from Other Governments 2,515,143 1,089,819 - Advances to Other Funds 82,000 - - Inventories 324,912 - 9,991 Prepaid Expenses - - 23,111 Total Current Assets 30,321,617 2,251,706 17,938,523 Non-Current Assets Restricted Assets: Pooled Cash and Investments 13,771,651 - 7,322,818 Cash with Fiscal Agent 1,693,871 - - Capital Assets, net of accumulated depreciation: Land 7,872,349 209,611 1,903,601 Buildings 7,742,357 5,247,263 1,147,022 Infrastructure - 2,184,191 - Improvements Other Than Buildings 169,855,172 8,000,200 6,852,283 Equipment 2,434,476 59,795 467,605 Construction in Progress 47,124,331 4,085,103 207,440 Prepaid Bond Insurance 55,664 - - Total Non-Current Assets 250,549,871 19,786,163 17,900,769 Total Assets $ 280,871,488 $ 22,037,869 $ 35,839,292
Deferred Outflows of Resources $ 3,727,439 $ 124,008 $ 551,142
LIABILITIESCurrent Liabilities Accounts Payable 1,228,163 259,412 206,141 Accrued Liabilities 1,508,921 38,000 48,336 Due to Other Funds - - - Due to Other Governments 27,705 - - Unearned Revenues 311,671 58,508 - Deposits 3,018,844 93,427 34,069 Loans & Notes Payable 1,061,782 277,770 - Bonds Payable 2,483,783 - - Compensated Absences 474,561 37,569 120,106 Claims Liabilities - - - Payable from Restricted Assets: Accounts Payable 2,635,604 - 144 Retainage Payable 526,400 145,743 - Total Current Liabilities 13,277,434 910,429 408,796
Business-Type
Sewer District OperationsWater & Aviation Waste
Management
HERNANDO COUNTY, FLORIDASTATEMENT OF NET POSITION
PROPRIETARY FUNDSSeptember 30, 2016
15
BuildingDepartment Total
$ 800 $ 193,136 $ 200,720 2,395,994 43,958,727 13,906,339
- - 5,322,304
- 250,701 - - 4,042,417 68,876 - 418,683 2,286 - 3,604,962 49 - 82,000 - - 334,903 38,189 - 23,111 343,227
2,396,794 52,908,640 19,881,990
- 21,094,469 - - 1,693,871 -
215,000 10,200,561 - 993,630 15,130,272 1,587,165
- 2,184,191 - 76,540 184,784,195 - 19,360 2,981,236 9,960,115
- 51,416,874 - - 55,664 -
1,304,530 289,541,333 11,547,280 $ 3,701,324 $ 342,449,973 $ 31,429,270
$ 470,046 $ 4,872,635 $ 260,804
37,957 1,731,673 1,759,934 32,907 1,628,164 396,529
- - 4,105 16,623 44,328 -
- 370,179 358,666 240,791 3,387,131 -
- 1,339,552 - - 2,483,783 -
90,437 722,673 54,502 - - 2,932,042
- 2,635,748 - - 672,143 -
418,715 15,015,374 5,505,778
Continued
GovernmentalActivities-Activities - Enterprise Funds
Service FundsInternal
16
Non-Current Liabilities Loans & Notes Payable 54,734,285 1,664,958 - Bonds Payable 33,464,907 - - Compensated Absences 46,935 3,716 11,878 Other Post-Employment Benefits 590,291 31,943 128,511 Net Pension Liability 5,220,249 324,706 1,279,133 Claims Liabilities - - - Payable from Restricted Assets: Unearned Revenues 1,487,988 - 360 Accrued Landfill Closure/Postclosure Care - - 4,355,651 Total Non-Current Liabilities 95,544,655 2,025,323 5,775,533 Total Liabilities $ 108,822,089 $ 2,935,752 $ 6,184,329
Deferred Inflows of Resources $ 169,603 $ 11,352 $ 33,850
NET POSITIONNet Investment in Capital Assets 146,160,053 17,843,435 10,577,951 Restricted for Capital Projects 8,718,447 - - Renewal and Replacement 4,034,245 - - Unrestricted 16,694,490 1,371,338 19,594,304
Total Net Position $ 175,607,235 $ 19,214,773 $ 30,172,255
Adjustment to reflect the consolidation of Internal Service Fund activities related to Enterprise Funds
Net Position of business-type activities
The notes to the financial statements are an integral part of this statement.
Sewer District Operations ManagementWater & Aviation Waste
Business-Type
HERNANDO COUNTY, FLORIDASTATEMENT OF NET POSITION
PROPRIETARY FUNDSSeptember 30, 2016
17
- 56,399,243 - - 33,464,907 -
8,944 71,473 5,391 106,022 856,767 63,369
1,093,019 7,917,107 638,376 - - 650,000
- 1,488,348 - - 4,355,651 -
1,207,985 104,553,496 1,357,136 $ 1,626,700 $ 119,568,870 $ 6,862,914
$ 32,526 $ 247,331 $ 11,166
1,304,530 175,885,969 11,547,280
- 8,718,447 - - 4,034,245 -
1,207,614 38,867,746 13,268,714
$ 2,512,144 227,506,407 $ 24,815,994
2,798,155
$ 230,304,562
Department Total Service FundsBuilding Internal
Activities - Enterprise Funds Activities -Governmental
18
Operating Revenues Licenses and Permits $ 2,300 $ - $ 28,000 Charges for Services 31,061,648 1,803,860 7,614,318 Miscellaneous 498,788 45,716 207,237 Total Operating Revenues 31,562,736 1,849,576 7,849,555
Operating Expenses Personal Services 8,116,910 414,812 2,232,889 Other Services & Charges 9,857,776 1,202,144 3,129,766 Claims - - - Depreciation 8,237,780 826,288 1,084,117 Total Operating Expenses 26,212,466 2,443,244 6,446,772
Operating Income (Loss) 5,350,270 (593,668) 1,402,783
Non-Operating Revenues (Expenses) Interest Income 362,002 23,538 290,603 Interest Expense (1,638,856) (74,516) - Operating Grants 85,125 8,406 - Gain (Loss) on Sale of Capital Assets (24,765) 22 52,811 Discontinued Project - (49,671) - Amortization of Bond Discount/Premium 178,783 - - Total Non-Operating Revenues (Expenses) (1,037,711) (92,221) 343,414
Income (Loss) Before Contributions and Transfers 4,312,559 (685,889) 1,746,197
Capital Grants and Contributions 2,489,020 2,817,049 - Transfers In 831,604 20,127 340,879 Transfers Out - (242,576) - Total Contributions and Transfers 3,320,624 2,594,600 340,879
Change in Net Position 7,633,183 1,908,711 2,087,076
Net Position-Beginning 167,974,052 17,306,062 28,085,179
Net Position-Ending $ 175,607,235 $ 19,214,773 $ 30,172,255
Adjustment to reflect the consolidation of Internal Service Fund activities related to Enterprise Funds
Change in net position of business-type activities
The notes to the financial statements are an integral part of this statement.
Sewer District Operations Management
Business-Type Water & Aviation Waste
For the Fiscal Year Ended September 30, 2016
HERNANDO COUNTY, FLORIDASTATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
19
$ 2,859,746 $ 2,890,046 $ -104,921 40,584,747 26,394,839
66,331 818,072 387,826 3,030,998 44,292,865 26,782,665
1,758,089 12,522,700 971,842 980,592 15,170,278 9,584,826
- - 14,498,141 47,765 10,195,950 1,697,622
2,786,446 37,888,928 26,752,431
244,552 6,403,937 30,234
25,166 701,309 155,884 - (1,713,372) - - 93,531 -
18 28,086 348,854 - (49,671) - - 178,783 -
25,184 (761,334) 504,738
269,736 5,642,603 534,972
- 5,306,069 - 47,478 1,240,088 22,675
- (242,576) (2,539,741) 47,478 6,303,581 (2,517,066)
317,214 11,946,184 (1,982,094)
2,194,930 26,798,088
$ 2,512,144 $ 24,815,994
(13,506)
$ 11,932,678
Department Total Service FundsBuilding InternalActivities - Enterprise Funds
GovernmentalActivities -
20
Cash Flows from Operating Activities Receipts from Customers $ 36,697,385 $ 1,213,436 Receipts from Inter-Fund Services - - Payments to Suppliers (13,983,433) (1,200,869) Payments to Employees (7,864,203) (400,983) Claims Paid - - Other Receipts 498,788 45,716 Net Cash provided by (used for) Operating Activities 15,348,537 (342,700)
Cash Flows from Noncapital Financing Activities Operating Grants 85,125 8,406 Transfers From Other Funds 831,604 20,127 Transfers to Other Funds - (242,576) Net Cash Provided by (used for) Noncapital Financing Activities 916,729 (214,043)
Cash Flows from Capital and Related Financing Activities Additions to Capital Assets (21,369,130) (4,848,021) Proceeds from Capital Debt 16,533,372 1,900,000 Principal Paid on Capital Debt (3,140,742) (304,271) Interest Paid on Capital Debt (2,048,885) (47,777) Capital Grants Revenue - 2,817,049 Connection Fee Collections 2,177,798 - Proceeds From Sale of Capital Assets 30,974 22 Net Cash provided by (used for) Capital and Related Financing Activities (7,816,613) (482,998)
Cash Flows from Investing Activities Interest Received 362,002 23,538 Net Cash Provided by Investing Activities 362,002 23,538
Net Increase (Decrease) in Cash and Cash Equivalents 8,810,655 (1,016,203)
Cash and Cash Equivalents at Beginning of Year 29,965,337 2,134,549
Cash and Cash Equivalents at End of Year $ 38,775,992 $ 1,118,346
Classified as: Current Assets 23,059,914 1,118,346 Restricted Assets - Current 250,556 - Restricted Assets - Non-current 15,465,522 -
Totals $ 38,775,992 $ 1,118,346
Sewer District OperationsWater & Aviation
Business-type
STATEMENT OF CASH FLOWSHERNANDO COUNTY, FLORIDA
For the Fiscal Year Ended September 30, 2016PROPRIETARY FUNDS
21
$ 7,654,252 $ 2,867,331 $ 48,432,404 $ 22,321,984 - - - 4,119,515
(3,680,881) (976,103) (19,841,286) (11,022,877) (2,183,257) (1,722,616) (12,171,059) (551,847)
- - - (15,324,026) 207,237 66,331 818,072 387,826
1,997,351 234,943 17,238,131 (69,425)
- - 93,531 - 340,879 47,478 1,240,088 22,675
- - (242,576) (2,539,741)
340,879 47,478 1,091,043 (2,517,066)
(895,449) (26,759) (27,139,359) (3,480,679) - - 18,433,372 - - - (3,445,013) - - - (2,096,662) - - - 2,817,049 - - - 2,177,798 -
24,517 18 55,531 348,854
(870,932) (26,741) (9,197,284) (3,131,825)
290,603 25,166 701,309 155,884 290,603 25,166 701,309 155,884
1,757,901 280,846 9,833,199 (5,562,432)
23,141,871 2,115,948 57,357,705 24,991,795
$ 24,899,772 $ 2,396,794 $ 67,190,904 $ 19,429,363
17,576,809 2,396,794 44,151,863 19,429,363 145 - 250,701 -
7,322,818 - 22,788,340 -
$ 24,899,772 $ 2,396,794 $ 67,190,904 $ 19,429,363
Continued
Total Service FundsInternal
Management DepartmentWaste Building
GovernmentalActivities - Enterprise Funds Activities -
22
Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities
Operating Income (Loss) $ 5,350,270 $ (593,668)
Adjustments to Reconcile Operating Income (Loss) to Net Cash provided by (used for) Operating Activities
Depreciation 8,237,780 826,288 Other Post-Employment Benefits 46,988 2,536 Pension Adjustments 277,569 15,912 Landfill Closure/Postclosure Care Amortization - - (Increase) Decrease in Accounts Receivable (331,889) 85,831 Due from Other Funds (2,447) - Due from Other Governments 6,794,795 (685,722) Inventories (6,735) - Prepaid Expenses 7,756 - Increase (Decrease) in Accounts Payable (3,444,893) (94,155) Retainage Payable (709,490) 95,430 Accrued Liabilities (71,850) (4,619) Due to Other Funds - - Due to Other Governments 27,705 - Unearned Revenues (1,148,817) (23,309) Deposits 321,795 32,776 Claims Liabilities - - Total Adjustments 9,998,267 250,968
Net Cash Provided by (used for) Operating Activities $ 15,348,537 $ (342,700)
Non-cash Investing, Financing, and Capital Activities: Contributions of Capital Assets from Developers $ 311,223 $ -
The notes to the financial statements are an integral part of this statement.
Water & AviationSewer District Operations
Business-type
STATEMENT OF CASH FLOWSHERNANDO COUNTY, FLORIDA
For the Fiscal Year Ended September 30, 2016PROPRIETARY FUNDS
23
$ 1,402,783 $ 244,552 $ 6,403,937 $ 30,234
1,084,117 47,765 10,195,950 1,697,622 11,991 10,379 71,894 5,634 73,193 61,879 428,553 35,361
(532,279) - (532,279) -
28,382 - (217,676) 53,919 (3,541) - (5,988) (2,286)
- - 6,109,073 160 3,940 - (2,795) 55,431
(23,111) - (15,355) (343,227)
(22,776) 3,670 (3,558,154) (1,482,259) - - (614,060) -
(35,552) (36,785) (148,806) 379,000 - - - 4,105 - 819 28,524 - 360 - (1,171,766) 18,586
9,844 (97,336) 267,079 - - - - (521,705)
594,568 (9,609) 10,834,194 (99,659)
$ 1,997,351 $ 234,943 $ 17,238,131 $ (69,425)
$ - $ - $ 311,223 $ -
Total Service FundsBuilding Internal
DepartmentWaste
Management
GovernmentalActivities -Activities - Enterprise Funds
24
Agency
Funds
ASSETS
Cash and Cash Equivalents $ 2,316,672
Pooled Cash and Investments 6,567,170
Accounts Receivable (net) 300
Due from Other Governments 414
Total Assets $ 8,884,556
LIABILITIES
Accounts Payable $ 165,027
Accrued Liabilities 4,598,822
Due to Other Funds 32,334
Due to Other Governments 974,277
Deposits 3,114,096
Total Liabilities $ 8,884,556
The notes to the financial statements are an integral part of this statement.
AGENCY FUNDS
September 30, 2016
HERNANDO COUNTY, FLORIDA
STATEMENT OF FIDUCIARY NET POSITION
25
HERNANDO COUNTY, FLORIDASeptember 30, 2016
NOTES TO THE FINANCIAL STATEMENTS
PAGE
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 26
NOTE B STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY 36
NOTE C CASH AND INVESTMENTS 36
NOTE D RECEIVABLES 41
NOTE E RESTRICTED ASSETS 42
NOTE F CAPITAL ASSETS 43
NOTE G INTERFUND TRANSACTIONS 46
NOTE H LONG-TERM LIABILITIES 50
NOTE I RETIREMENT SYSTEM 63
NOTE J POST EMPLOYMENT BENEFITS OTHER THAN PENSION 71
NOTE K ARBITRAGE REBATE LIABILITY 73
NOTE L PROPERTY TAXES 73
NOTE M RISK MANAGEMENT 74
NOTE N CLOSURE AND POSTCLOSURE CARE COSTS 75
NOTE O DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED
INFLOW OF RESOURCES 76
NOTE P SEGMENT INFORMATION 77
NOTE Q CONTINGENCIES 77
NOTE R SUBSEQUENT EVENTS 77
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
26
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. THE REPORTING ENTITY
Hernando County was created in 1843 as a political subdivision of the State of Florida, under Chapter 107, Section
1, Florida Statutes. It is governed by an elected Board of County Commissioners (the Board) which is governed
by state statutes and regulations. In addition to the five members of the Board, there are five elected Constitutional
Officers: Clerk of Circuit Court and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections, and Tax
Collector. The Constitutional Officers maintain separate accounting records and budgets. The Board and
Constitutional Officers provide the following services: public safety (police, fire and rescue), highways and streets,
sanitation, water and sewer utilities, health and social services, culture/recreation, public improvements, planning
and zoning, and general administrative services.
In accordance with the provisions of generally accepted accounting standards, these financial statements present
the financial position, results of operations, and cash flows of the applicable fund types. The statements present
the government and its component units, entities for which the government is considered to be financially
accountable. Blended component units are, in substance part of the primary government’s operations, even
though they may be legally separate entities. Thus, blended component units are appropriately presented as funds
of the primary government. Otherwise, discretely presented component units, if there were any, would be reported
in a separate column in the government-wide financial statements.
Blended Component Units
The following component units are included in the accompanying financial statements as part of the primary
government because they satisfy the criteria for blending.
The following component units are in substance part of the County’s operations, have the same governing board
and management team as the County, and there is a specific benefit or burden relationship with the County:
Hernando County Water and Sewer District - established by Ordinance 80-4 to provide water and sewer
service to residents of the County which are not serviced by other agencies or entities.
Hernando County Health Facilities Authority - established by Resolution 75-41 for the purpose of
assisting health facilities in the acquisition, construction and financing of projects.
The following component units are in substance part of the County’s operations, have the same management team
as the County, there is a specific benefit or burden relationship with the County, and they provide services entirely
to the County, strictly in an advisory capacity:
Hernando County Port Authority - established pursuant to Laws of Florida, Chapter 65-1618 and 71-666
for the purpose providing advisory services regarding waterway management.
Hernando County Law Library - established pursuant to Laws of Florida, Chapter 65-1627, to provide
advisory services regarding a central law library which is available to County officials, judges, officers
of the court and the public.
Separate financial statements are not prepared for any of the above component units.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
27
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The basic financial statements are composed of the Government-Wide Financial Statements, the Fund Financial
Statements and the Notes to the Financial Statements.
Government-Wide Financial Statements
The government-wide financial statements consist of a Statement of Net Position and a Statement of Activities.
These statements report on the government as a whole and include separate columns for the governmental and
business-type activities of the primary government. An additional separate column would be presented for any
discretely presented component unit for which the County is financially accountable.
The Statement of Net Position presents information on all of the assets, deferred outflows, liabilities and deferred
inflows of the County except the Fiduciary Funds. The difference between (assets plus deferred outflows) less
(liabilities plus deferred inflows) is reported as net position. Changes in net position may serve as an indicator of
whether the financial position of the County is improving or deteriorating. The Statement of Fiduciary Net Position
is presented separately.
The Statement of Activities reports functional categories of programs provided by the County, and demonstrates
how and to what degree those programs are supported by specific revenue. The “Expenses” column reports direct
expenses that are clearly identifiable with a specific function or program. “Program Revenues” are directly
attributable to a specific function or program and are categorized as charges for services, operating grants and
contributions, and capital grants and contributions. The net of program expenses less program revenues reflects
the net cost of each function or program. The general revenues section includes revenues that are not program
specific such as taxes and investment earnings.
As a general rule, interfund activities, with the exception of interfund services provided and used have been
removed from the government-wide financial statements. Residual amounts between governmental and business-
type activities are reported as “internal balances.” These statements distinguish between the governmental and
business-type activities of the County. Governmental activities generally are financed through taxes,
intergovernmental revenues, and other nonexchange transactions. Business-type activities are financed in whole
or in part by fees charged to external parties.
Fund Financial Statements
The underlying accounting system of the County is organized and operated on the basis of separate funds. A fund
is a group of related accounts that are used to maintain control over resources that have been segregated for
specific activities or purposes. Fund accounting is used to ensure and demonstrate compliance with legal,
legislative, contractual and other finance-related provisions. All of the funds of the County may be divided into
three categories: governmental funds, proprietary funds and fiduciary funds. The County’s major funds are
reported as separate columns in the fund financial statements, and non-major funds are aggregated and presented
as a single column on each statement. Fund financial statements are presented after the government-wide
financial statements. A reconciliation is provided that converts the results of governmental fund accounting to the
government-wide presentation.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
28
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Internal service funds of the County (which traditionally provide services primarily to other funds of the County) are
presented, in summary form, as part of the proprietary fund financial statements. Since the principal users of the
internal services are the County’s governmental activities, financial statements of internal service funds are
included in the governmental activities column when presented at the government-wide level. The costs of these
services are allocated to the appropriate functional activity (Public Safety, Physical Environment, etc.). When
appropriate, surplus or deficits in the Internal Service Funds are allocated back to customers in the government-
wide Statement of Activities. This creates a reconciling item between the business-type activities column and the
Proprietary Fund statements as reflected on the bottom of each statement.
The County’s fiduciary funds are presented in the fund financial statements. Since, by definition, these assets are
being held for the benefit of a third party (other local governments, private parties, etc.) and cannot be used to
address activities or obligations of the government, these funds are not incorporated into the government-wide
statements.
GASB sets forth minimum criteria for the determination of what are to be considered major funds for financial
statement presentation. The County uses these criteria for major fund determination. The County electively added
some proprietary funds as major funds, which either had debt outstanding or specific community focus. The County
also electively added the Impact Fee fund as a major-fund for purposes of consistency with prior years. The non-
major funds are combined into one column in the respective fund financial statements.
The following are reported as major governmental funds:
General Fund – The general operating fund of the County. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
Transportation Trust and Gas Taxes – To account for the proceeds of gas taxes and other revenues for the
construction and maintenance of County roads.
Impact Fees Capital Project Fund– To account for the proceeds of impact fees levied by the County, and associated
expenditures for roads, parks, public buildings, library, law enforcement and emergency services.
Hernando County Fire Rescue-Fire - To account for assessments levied for fire protection services within the
district.
The following are reported as major enterprise funds:
Water and Sewer District – This fund is used to account for the operation of water, wastewater and reclaimed water
services owned by Hernando County.
Aviation Operations – This fund is used to account for the operation of the Hernando County Airport and the
Industrial Complex located on Airport property.
Waste Management – This fund is used to account for the operation of the sanitary landfill for the handling and
disposal of solid waste.
Building Department – This fund is used to account for the operation of providing building permits and other
construction-related services to County citizens.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
29
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The County also reports the following funds:
Internal Service Funds - These funds are used to account for goods or services provided by one department to
other departments of the County or to other governmental units on a cost reimbursement basis. Such goods and
services include a central fueling system, vehicle and fleet maintenance and replacement, risk management,
workers compensation management, computer replacement and health self insurance.
Agency Funds – These funds are clearing accounts for the collection and disbursement of funds by the County on
behalf of individuals, private organizations, or other governments. Agency Funds include jury and witness, court
registry, tax, vehicle tags, payroll deductions, and law enforcement holdings.
3. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The accounting policies of the County conform to generally accepted accounting principles as applicable to
governments in accordance with the Government Accounting Standards Board (GASB). GASB is the accepted
standard setting body for establishing governmental accounting and financial reporting principles. The preparation
of financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.
The following is a summary of the more significant policies:
The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of
accounting. Measurement focus indicates the type of resources being measured such as current financial
resources or economic resources. The basis of accounting indicates the timing of transactions or events for
recognition in the financial statements.
The government-wide financial statements and proprietary fund statements are reported using the economic
resources measurement focus and the accrual basis of accounting. 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.
The 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 45 days of the end of the current fiscal period. The government considers
intergovernmental grant revenues to be available if they are collected within 180 days of the end of the current
fiscal period. Receivables collected after these periods are reported as deferred inflows of resources until the
revenue becomes available. 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. General capital asset acquisitions are reported as
expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported
as other financing sources.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
30
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property taxes, sales 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.
Grant entitlements are recorded as revenues when all eligibility requirements are met, and are accrued
simultaneously with the grant expenditures. All other revenue items are considered to be measurable and available
only when cash is received by the government.
Proprietary funds record both operating and non-operating revenues and expenses. Operating revenues are those
that are obtained from the operations of the proprietary fund such as user fees. Non-operating revenues are not
related to the operations of the proprietary fund and include interest income and grants. Operating expenses
represent the cost of operations, which includes depreciation. Non-operating expenses are not related to
operations, such as interest expense.
The agency fund has no measurement focus, but utilizes the accrual basis of accounting for reporting its assets
and liabilities.
4. GOVERNMENTAL FUND BALANCE CLASSIFICATIONS
Governmental fund balances are classified either as non-spendable or spendable. Spendable fund balances are
further classified in a hierarchy based on the extent to which constraints are placed on the spending of these fund
balances. Fund balances are reported in the governmental fund statements in the following classifications:
Non-spendable Fund Balance
This component of fund balance consists of amounts that are not in spendable form, or are legally or contractually
required to be maintained intact.
Spendable Fund Balance
Restricted Fund Balance – This component of fund balance consists of amounts that are constrained either (a)
externally by third parties (creditors, grantors, contributors, or laws or regulations of other governments), or (b) by
law through constitutional provisions or enabling legislation.
Committed Fund Balance – This component of fund balance consists of amounts that can only be used for specific
purposes pursuant to constraints imposed by formal action (approval of a resolution by a majority of the Board) of
the organization’s governing authority (County Commission). These committed amounts cannot be used for any
other purpose unless the governing authority removes or changes the specified use by taking the same type of
action employed to constrain those amounts.
Assigned Fund Balance – This component of fund balance consists of amounts that are constrained by a less-
than-formal action of the organization’s governing authority, or by an individual or body to whom the governing
authority has delegated this responsibility. The governing authority, the County Commission, has approved the
assigned fund balances through action taken during the budget process. The County Commission has not
delegated the responsibility to assign fund balances to any individual or body.
Unassigned Fund Balance – This classification is used for (a) negative unrestricted fund balances in any
governmental fund, or (b) fund balances within the general fund that are not restricted, committed, or assigned.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
31
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted
resources first, then unrestricted resources (committed, assigned and unassigned) as they are needed. When
unrestricted resources (committed, assigned and unassigned) are available for use, it is the County’s policy to use
unassigned resources first, then assigned, and then committed as needed.
5. BUDGETARY INFORMATION
The annual budget, formally adopted by the Board of County Commissioners, serves as the legal authorization for
expenditures. Legal budgetary authority and control is established on a fund basis in accordance with Florida
Statutes 129.03, however, operational control for management purposes is maintained during the year at the lower
of the department or fund level. The adopted budget can only be changed by a budget amendment or a budget
supplement. Management can transfer appropriations within a fund without the Board of County Commissioners
approval unless the transfer affects a budgeted reserve. Pursuant to Florida Statutes 129.06 budget amendments
require the approval of the Board of County Commissioners whenever the effect of the amendment is to increase
the total appropriations of the fund, to transfer monies between the funds, or to transfer budgeted reserve funds.
The County’s annual budgetary process is governed by Florida Statutes, Chapters 129 and 200. The total of the
estimated receipts, including balances brought forward, must equal the total of the appropriations and reserves,
therefore enabling a balanced budget. During the budgeting process, budgets are prepared on a basis consistent
with generally accepted accounting principles. All appropriations lapse at year-end.
The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by
all reserves, transfers, allocations, supplemental appropriations and other legally authorized executive changes
applicable to the fiscal year, whenever legally authorized.
In 2009, the County established a General Fund Budget Reserve Policy, creating four reserve categories. Each
of the following minimum levels are calculated as a percentage of the total approved General Fund budget, less
reserves, transfers and grants: Reserve for Contingencies established at .5% to be used for small unanticipated,
non-recurring needs; an Emergency Reserve established at 3.5% to be used for more significant emergencies,
those in excess of $100,000; a Stabilization Reserve established at 3.5% to be used when there is a one-time loss
of a major revenue source and/or severe downturn in the economy; and a Reserve for Cash Forward established
at 11.0% for the purpose of providing funds to support operations in the new fiscal year until the County’s most
significant revenue source, property tax, is received. The total of these reserves, 18.5%, is included in the annual
approved budget. The policy also establishes the approval required to use these budgeted reserves, and the
method in which they are to be replenished. The first three reserves are classified as committed fund balance on
the accompanying balance sheet of the General Fund. The fourth reserve (reserve for cash forward) is included
within the unassigned fund balance classification.
6. ASSETS, DEFERRED OUTFLOWS, LIABILITIES, DEFERRED INFLOWS AND NET POSITION
Cash, Cash Equivalents, Pooled Cash and Investments
The County considers cash and cash equivalents to be cash on hand, demand deposits, and highly liquid
investments, including those held as restricted assets, with original maturities of three months or less when pur-
chased. For purposes of the statement of cash flows, the County considers a fund’s share of pooled cash and
investments to be cash equivalents.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
32
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The County pools substantially all cash and investments, except for cash and investments which are maintained
in accordance with legal restrictions. Each fund’s equity share of the total pooled cash and investments is included
under the caption “Pooled Cash and Investments”. Interest earned is allocated to the various funds based on their
average daily cash balances within the pooled account.
The County’s investments are recorded at fair value unless the investment qualifies as an external investment pool
under the guidance of GASB, which allows under certain criteria these investments to be recorded at amortized
costs. 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 method of measuring the fair value of
investments uses the fair value hierarchy as defined by GASB. See Note C. The Local Government Surplus
Funds Trust Fund (Florida Prime) is an investment pool reported at amortized cost which approximates Net Asset
Value (NAV). The Florida Cooperative Liquid Assets Securities System (FLCLASS) is reported at amortized cost
and measured at fair value. The Florida Trust reports all share information at NAV and reflects fair values in its
share value.
GASB authorizes five alternative means of disclosing interest rate risk. The County previously reported interest
rate risk using the weighted average maturity method, but due to a change in the management of the composition
of the portfolio, effective September 30, 2016, the County reports interest rate risk using the segmented time
distribution method.
Receivables and Payables
The accounts receivable of the County are recorded in the government-wide and fund financial statements, and
are net of an allowance for uncollectibles, which generally is equivalent to the receivables that are over 90 days.
Activities 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). Any residual balances outstanding between
the governmental activities and business-type activities are reported in the government-wide financial statements
as “internal balances.”
Advances between funds, as reported in the fund financial statements, are offset by a non-spendable fund balance
account in applicable governmental funds to indicate that they are not available for appropriation and are not
expendable available financial resources.
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. For the County, there are two items that qualify for reporting in this
category. One is a deferred charge on debt refunding. A deferred charge on debt refunding results from the
difference in the carrying value of refunded debt and its reacquisition price. The amount is deferred and amortized
over the shorter of the life of the refunded or refunding debt. The second item is related to pensions. The deferred
outflows related to pensions result from County contributions to the County's retirement plan subsequent to the
retirement plan's measurement date, and other timing differences.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
33
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 then. The only deferred inflow in the statement of Net Position is an item related to pensions. The
deferred inflow related to pensions is the result of certain timing differences. The County also has a deferred inflow
in the Balance Sheet of the Governmental Funds. This deferred inflow, unavailable revenue, consists of funds
received/receivable by the County that are applicable to a future period.
Unbilled Revenue
Unbilled revenue in the Water and Sewer Fund generally represents revenue earned during the last month of the
fiscal year for which bills are sent the following month. Revenue is recognized as Charges for Services when the
customer has used the services provided by the County which is also considered to be when it is earned.
Unearned Revenue
Unearned revenue in the Water and Sewer Fund generally represents prepaid connection fees from developers.
Such revenues are considered imposed non-exchange transactions. Revenue is recognized when the County has
an enforceable legal claim to such connection fees at which time it is reported as capital grants and contributions.
The majority of unearned revenue in the governmental funds represents prepaid impact fees which are refundable.
Inventories and Prepaid Items
Inventories are determined by physical count and are valued at cost using the first-in, first-out method. The cost
is recorded as an expenditure using the consumption method at the time the individual inventory items are used.
Certain payments to vendors represent costs applicable to future accounting periods and are recorded as prepaid
items in both the government-wide and fund financial statements. In most cases, the prepaid items are recorded
as an expenditure using the consumption method at the time the prepaid items are received.
Restricted Assets
The use of certain Enterprise Fund assets is restricted by bond resolution and agreements with various parties.
Assets so designated are identified as restricted assets on the Statement of Net Position.
Capital Assets
Capital assets, which include property (land), buildings, infrastructure assets (e.g. roads, bridges, sidewalks and
similar items), improvements, equipment, construction in progress and intangible assets (e.g. software) are
reported in the applicable governmental or business-type activities columns in the government-wide financial
statements as well as the proprietary fund financial statements.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
34
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The County has established the following thresholds for additions to capital assets, and estimated useful lives for
depreciation purposes:
Threshold Useful Life-YearsLand $ - -Easements 150,000 -Right-of-Way 150,000 -Buildings 10,000 20-40Infrastructure 150,000 5-50Improvements-Other Than Buildings 10,000 20Improvements-Water/Sewer Lines 10,000 50General Asset Accounts 100,000 annually Based upon group characteristicsLeasehold Improvements 10,000 Life of lease or life of improvement
Whichever is shorterEquipment 1,000 5-10Intangible Assets 150,000 Per contractual provisions
Capital assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair value at the date of donation. Interest incurred during the construction
phase of capital assets in business-type activities is included as part of the capitalized value of the assets
constructed. Normal maintenance and repairs to capital assets are not included in the reported value because
they do not increase the capacity or extend the useful life of the capital asset.
Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets.
Depreciation is charged as an expense against the operations of the governmental and business-type activities in
the government-wide financial statements. Depreciation of assets in the proprietary funds is charged as an
expense at the fund level.
Compensated Absences
The County maintains a policy that permits employees to accumulate earned but unused paid time off benefits that
will be paid to employees upon separation from County service based on years of service, and if certain criteria
are met. The County’s policy also permits employees to either bank a limited amount of paid time off benefits or
receive a limited cash buyout on an annual basis, depending on budget availability.
These benefits plus their related tax and retirement costs are classified as compensated absences. Both the
current and long-term portion of compensated absences are accrued and reported in the government-wide and
proprietary fund financial statements. A liability is reported in governmental funds only if it has matured, for
example, as a result of employee resignations and retirements, and is considered due and payable at year-end.
Compensated absences have typically been liquidated by the fund in which the employees’ salaries are charged,
the most significant of these being General Fund, Transportation Trust and Gas Taxes, Hernando County Fire
Rescue – Fire, and the Water and Sewer District.
Other Long-Term Obligations
In the government-wide financial statements and proprietary fund financial statements, discounts, premiums and
bond insurance costs related to long-term debt, and gains/losses on bond refundings are deferred and amortized
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
35
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
over the life of the bonds using the straight-line method of accounting. Discounts and premiums are combined with
the debt, and classified as a liability. Bond insurance is classified as an asset. Gains/losses are classified as
deferred inflows/outflows of resources. Discounts, premiums, bond insurance costs, and other issuance costs
related to debt in the governmental fund financial statements are recorded as expenditures or other financing
sources/uses when paid and therefore are not accounted for in subsequent periods.
State and federal laws and regulations require the Waste Management Division to place a final cover on the landfill
cells when they stop accepting waste and to perform certain maintenance and monitoring functions at the site for
thirty years after closure. Although closure and post-closure care costs will be paid only near or after the date that
the landfill stops accepting waste, the Division accrues an estimated portion of these closure and post-closure
costs at the balance sheet date.
The County’s risk management activities are recorded in Internal Service Funds (Risk Management, Worker’s
Compensation and Health Insurance). The Worker’s Compensation Fund is a self-insurance program for worker’s
compensation claims on losses up to established maximums, and is insured against losses in excess of those
amounts. Both the County Health Insurance and Sheriff Health Insurance are self-insurance funds for medical
health insurance claims up to established maximums, and are insured against losses in excess of those amounts.
Based on actuarial estimates, “Claims Liabilities” have been established in the Worker’s Compensation, County
Health Insurance and Sheriff Health Insurance Funds for claims reported but not paid, and incurred but not
reported.
Long-term obligations associated with pensions, compensated absences and post-employment liabilities have
typically been liquidated by the fund in which the employees’ salaries are charged, the most significant of these
being General Fund, Transportation Trust and Gas Taxes, Hernando County Fire Rescue – Fire, and the Water
and Sewer District.
7. EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
During the year ended September 30, 2016, the County implemented the following GASB Statements:
GASB Statement No. 72, Fair Value Measurement and Application. GASB Statement No. 72 requires the
County to use valuation techniques which are appropriate under the circumstances and are consistent
with the market approach, the cost approach or the income approach. GASB Statement No. 72
establishes a hierarchy of inputs used to measure fair value consisting of three levels. Level 1 inputs are
quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted
prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level
3 inputs are unobservable inputs. GASB Statement No. 72 also contains note disclosure requirements
regarding the hierarchy of valuation inputs and valuation techniques that was used for the fair value
measurements.
In June 2015, the GASB issued Statement No. 76, The Hierarchy of Generally Accepted Accounting
Principles for State and Local Governments. GASB Statement No. 76 establishes the hierarchy of GAAP
for state and local governments. This statement did not have a significant impact to the County’s financial
statements.
In December 2015, the GASB issued Statement No. 79, Certain External Investment Pools and Pool
Participants. The statement addresses accounting and financial reporting for certain external investment
pools and pool participants. The statement establishes criteria for an external investment pool to qualify
for making the election to measure all of its investments at amortized cost for financial reporting purposes.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
36
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
It also establishes additional note disclosure requirements to include information about any limitations or
restrictions on participant withdrawals. This statement did not have a significant impact to the County’s
financial statements.
NOTE B – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
1. BUDGETARY COMPARISONS
Only funds with legally adopted budgets are included when the budget to actual expenditures or revenues are
compared. The actual figures are presented on the same basis of accounting as the budgeted figures on these
statements. Only actual expenditures are compared to budgeted expenditures since all encumbrances lapse at
year-end. All funds other than the Gas Tax Revenue Refunding Bonds, Series 2002 have legally adopted annual
budgets for the fiscal year ended September 30, 2016.
2. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended September 30, 2016, the following funds had an excess of actual expenditures over budgeted
expenditures. Only those funds with legally adopted budgets are considered for purposes of this note.
BudgetedExpenditures
ActualExpenditures
Gas Tax Revenue Refunding Bonds 2002 $ - $ 5
3. DEFICIT FUND BALANCES/NET POSITION
There were no funds with deficit fund balances/net position at September 30, 2016.
NOTE C – CASH AND INVESTMENTS
In order to minimize its cost basis and limit taxpayer liability in the provision of a full range of county services, the
County manages a portfolio of cash and investments to maximize net investment earnings on invested surplus
funds. The Board of County Commissioners and Constitutional Officers each maintain an approved investment
policy in compliance with guidelines and restrictions established by Florida Statutes. The primary objective of the
investment policy is to assure that investment risk is limited upon order entry. The second criterion is the assurance
of liquidity and the third consideration is yield.
The County is authorized to invest surplus public funds in the following:
Municipal Notes which are rated A or better by at least one nationally recognized statistical rating organization;
Certain Corporate Notes which are rated A or better by at least two nationally recognized statistical rating
organizations;
The Florida Local Government Investment Trust, Florida Trust;
The Local Government Surplus Funds Trust Fund, Florida Prime;
Registered money market funds;
Interest-bearing time deposits or savings accounts in qualified public depositories;
Direct obligations of the United States Treasury;
Federal agencies and instrumentalities;
Certain obligations issued or guaranteed by the United States Government Agencies;
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
37
NOTE C – CASH AND INVESTMENTS (CONTINUED)
Certain commercial paper which is rated as prime by at least two nationally recognized statistical rating
organizations;
Certain Domestic Bankers’ Acceptances;
Certain Supranationals;
Mortgage Backed Securities;
Certain Asset Backed Securities;
Other Intergovernmental Investment Pools.
The following is a summary of the carrying amount of cash and investments as of September 30, 2016:
GovernmentalActivities
Business-TypeActivities
Statement ofFiduciary Net
Position Total
Cash and CashEquivalents
$ 8,406,895 $ 193,136 $ 2,316,672 $ 10,916,703
Pooled Cash andInvestments
101,415,842 65,303,897 6,567,170 173,286,909
Total $ 109,822,737 $ 65,497,033 $ 8,883,842 $ 184,203,612
The County had the following deposits and investments at September 30, 2016:
Deposits $ 19,852,690Carrying Amount of Investments 164,350,922
Total $ 184,203,612
DEPOSITS
Deposits represent petty cash and cash held with banks in demand deposit and/or savings accounts. To manage
custodial credit risk for deposits, all demand and time deposits, including money market accounts, are insured and
collateralized in accordance with Chapter 280, Florida Statutes, which established the Public Deposit Security
Trust Fund, a multiple financial institution collateral pool. Florida Statutes Section 280.08 provides for assessments
against the members of the pool on a pro rata basis in the event that the collateral pool is insufficient to cover the
losses of a member financial institution that fails. As such, all deposits covered by this collateral pool are
considered to be fully insured.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
38
NOTE C – CASH AND INVESTMENTS (CONTINUED)
INVESTMENTS
At September 30, 2016, the County’s investments consisted of the following:
Maturities
Type of Investment Par Value Fair Value 1-3 years 1-5 years
United States Treasuries $ 70,920,000 $ 72,432,473 $ 28,638,894 $ 43,793,579
Federal Home Loan Bank 8,750,000 8,766,212 5,763,580 3,002,632
Federal Home Loan
Mortgage Corporation 6,281,847 6,491,767 4,492,004 1,999,763
Federal National Mortgage
Association 10,302,447 10,482,787 6,579,143 3,903,644
Federal Farm Credit Bank 3,000,000 3,000,940 - 3,000,940
Money Market Fund 1,313,087 1,315,939 1,315,939 -
Corporate Notes 8,350,000 8,498,298 4,466,145 4,032,153
Municipal Notes 2,575,000 2,597,750 1,260,210 1,337,540
Local Government Surplus
Funds Trust Fund, (Florida
Prime) 6,050,000 6,062,220 6,062,220 -
Florida Local Government
Investment Trust (Florida
Trust) 38,189,710 38,189,710 38,189,710 -
Florida Cooperative Liquid
Assets Securities System
(FLCLASS) 6,500,000 6,512,826 6,512,826 -
$ 162,232,091 $ 164,350,922 $ 103,280,671 $ 61,070,251
The County participates in Securities Exchange Commission Registered Money Market Funds. Money Market
Funds use amortized cost which is reported at a stable NAV, typically $1.00 per share. The money market funds
are rated AAAm for Credit Quality by Standard & Poor’s Rating Agency.
The County also participates in the following investment pools:
The State of Florida Local Government Surplus Funds Trust Fund (Florida Prime) administered by the State Board
of Administration (SBA). This investment pool was created by Section 218.415, Florida Statutes, and operates
under investment guidelines established by Section 215.47, Florida Statues. The County’s investments in this pool
are reported at amortized cost, and are not subject to the fair value hierarchy.
The Florida Local Government Investment Trust (Florida Trust), which is administered by a Board of Trustees
appointed by the Florida Association of Court Clerks and County Comptroller, and the Florida Association of
Counties, Inc. The Florida Trust was created in December 1991 to provide a means for public entities to pool
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
39
NOTE C – CASH AND INVESTMENTS (CONTINUED)
surplus funds to maximize net earnings. The Florida Trust reports all share information at Net Asset Value and
reflects share value.
The Florida Cooperative Liquid Assets Securities System (FLCLASS), an independent local government pool
designed to provide an investment alternative for Florida governmental entities. The management of FLCLASS is
under the direction of an appointed Board of Trustees comprised of eligible participants of the FLCLASS program.
FLCLASS does not meet all of the specific criteria outlined in GASB 79, paragraph 4, and should therefore be
measured at fair value, but reports using amortized cost which approximates fair value.
None of the pools have limitations or restrictions on participant withdrawals including items such as redemption
notices, maximum transaction amounts, or authority to impose liquidity fees or redemption gates.
At September 30, 2016, the County’s investments carried the following Credit Rating and Fair Value Hierarchy:
Type of InvestmentCredit Rating
S&P's/Moody'sFair ValueHierarchy
United States Treasuries AA+/Aaa 1
Federal Home Loan Bank AA+/Aaa 2
Federal Home Loan Mortgage
Corporation AA+/Aaa 2
Federal National Mortgage
Association AA+/Aaa 2
Federal Farm Credit Bank AA+/Aaa 2
Money Market Fund AAAm/Aaa 1
Corporate Notes A+ to AAA/A2 to Aaa 2
Municipal Notes AA- to AAA/Aa1 to Aa3 2
Local Government Surplus Funds
Trust Fund, (Florida Prime) AAAm/NA NA
Florida Local Government
Investment Trust (Florida Trust) AAAf/NA 1
Florida Cooperative Liquid Assets
Securities System (FLCLASS) AAAm/NA 1
GASB Statement No. 72, Fair Value Measurement and Application, sets forth the framework for measuring fair
value. The County’s investments are recorded at fair value unless the investment qualifies as an external
investment pool under the guidance in GASB Statement No. 79. The County’s valuation measurement is reflected
in the chart above. The fair value hierarchy categorizes the inputs of valuation techniques used to measure fair
value into three levels:
Level 1 inputs-quoted prices (unadjusted) for identical assets or liabilities in active markets that a
government can access at the measurement date.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
40
NOTE C – CASH AND INVESTMENTS (CONTINUED)
Level 2 inputs-inputs other than quoted prices included within Level 1 that are observable for an asset or
liability, either directly or indirectly.
Level 3 inputs-unobservable inputs for an asset or liability. The fair value hierarchy gives the highest
priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price for an identical asset or liability
is not observable, a government should measure fair value using another valuation technique that
maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs.
The County’s valuation measurement are reflected in the chart above.
Management of the following investment risks are addressed below:
Custodial credit risk – risk that a government will not be able to recover deposits or the value of an investment
that’s in the possession of a failed institution or counterparty;
Credit risk – risk of loss from an issuer’s failure to repay principal and/or interest on a debt obligation;
Liquidity risk – risk that an investment cannot be bought or sold quickly enough to minimize a loss stemming
from a lack of marketability;
Concentration of investment risk – increasing probability of loss arising from heavily lopsided exposure to an
asset class, issuer, structure or maturity;
Interest rate risk – risk that a security’s value will decrease with a rise in interest rates.
To manage custodial credit risk for investments, the County’s investment policy specifies the County will execute
a Third-Party Custodial Safekeeping Agreement with a commercial bank’s trust department separately chartered
by the U.S. Government or State of Florida. In addition, no more than 25% of the entire portfolio may be placed
with any one financial institution or securities dealer. All securities purchased by the County are properly
designated as an asset of the County and are held in safekeeping by the bank’s trust department.
To manage credit risk, the County’s investment policy identifies and limits investments to only top ratings issued
by nationally recognized statistical rating organizations. At order entry, the County’s investments in Federal Farm
Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation and Federal National Mortgage
Association were rated Aaa by Moody’s Investor Service. At order entry, the County’s investments in corporate
and municipal notes were rated A or better.
To manage liquidity risk, the County’s investment policy identifies and limits investment to only top ratings issued
by nationally recognized statistical rating organizations. In order to ensure deep liquid markets, the County’s
investment policy identifies and limits investment in corporate notes to domestic issuers. Position size is also taken
into consideration with regard to liquidity risk.
To manage concentration of investment risk, the County’s investment policy stipulates maximum limitation
guidelines for diversification by instrument. A maximum of 50% of the portfolio may be invested in each of the
Florida Trust and Local Government Surplus Funds Trust Fund (Florida Prime) individually. Investment maximum
limitations range from 10% to 80% for each of the remaining types of investments. More than 5% of the County’s
total investments are invested in US Treasuries, Federal Farm Credit Bank, Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association, Corporate Notes and Federal Home Loan Bank.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
41
NOTE C – CASH AND INVESTMENTS (CONTINUED)
To manage interest rate risk, the County maintains a formal investment policy that limits investment maturities not
to exceed seven (7) years. This coupled with a diversified portfolio of differing maturities that employ callable,
floating, and structured securities limits exposure to fair value losses arising from interest rate risk.
NOTE D – RECEIVABLES
Accounts receivable at September 30, 2016, for the County’s individual major funds and non-major funds in total,
including applicable allowances for uncollectibles were as follows:
AccountsReceivable,
Gross
Allowancefor
UncollectibleAccounts
AccountsReceivable,
Net
General Fund $ 1,143,106 $ 811,119 $ 331,987Transportation Trust and Gas Taxes 214,428 202,803 11,625Hernando County Fire Rescue -Fire 101,170 96,983 4,187Water and Sewer District 3,876,556 138,500 3,738,056Aviation Operations 195,541 152,000 43,541Waste Management 264,785 3,965 260,820Non-major government funds 16,496,254 14,136,630 2,359,624Internal Service Funds 68,876 - 68,876
Total $ 22,360,716 $ 15,542,000 $ 6,818,716
Included in accounts receivable in the Water and Sewer District are unbilled amounts totaling $1,708,213 earned
in September 2016, but billed in October 2016.
The County’s State Housing Initiatives Partnership (SHIP) program offers zero-interest rate loans for housing
rehabilitation or down payment assistance to qualified recipients. Generally, the loans are required to be repaid at
the earlier of thirty years or sale/transfer of the property. The County has recorded the gross amount of the
receivable as an asset of $13 million, offset entirely by an allowance for uncollectible receivables.
Due from Other Governments at September 30, 2016, for the County’s individual major funds and non-major funds
were as follows:
Due fromGrantors
Due fromState Other Total
General Fund $ 646,815 $ 1,699,096 $ 15,105 $ 2,361,016Transportation Trust and GasTaxes 67,467 1,716,864 - 1,784,331Impact Fees Capital Project Fund - - 952 952Hernando County Fire Rescue-Fire - 12,616 - 12,616Water and Sewer District - 2,475,018 40,125 2,515,143Aviation Operations 1,089,819 - - 1,089,819Non-major governmental funds 191,629 386,899 19,857 598,385Internal Service Funds - 49 - 49
Total $ 1,995,730 $ 6,290,542 $ 76,039 $ 8,362,311
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
42
NOTE E – RESTRICTED ASSETS
As of September 30, 2016, restricted assets were held for the following purposes:
Cash withFiscal Agent
Pooled Cashand
Investmentsand Other
Investments Total
Debt Service Funds $ - $ 21,654 $ 21,654
Water and Sewer DistrictConstruction $ 1,693,871 $ 8,546,992 $ 10,240,863Debt Retirement - 1,226,415 1,226,415Renewal and Replacement - 4,248,800 4,248,800Total Water and Sewer District 1,693,871 14,022,207 15,716,078
Waste Management
Landfill Closure/Post-closure - 7,322,963 7,322,963Total Waste Management - 7,322,963 7,322,963
Total Business-Type Activities $ 1,693,871 $ 21,345,170 $ 23,039,041
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
43
NOTE F – CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2016, was as follows:
BeginningBalance Increases Decreases
EndingBalance
Governmental ActivitiesCapital assets not beingdepreciated:
Land $ 29,510,792 $ 240,545 $ 412,608 $ 29,338,729
Construction in Progress 1,684,905 541,077 1,729,409 496,573Total Capital Assets not beingdepreciated 31,195,697 781,622 2,142,017 29,835,302
Capital assets being depreciated:
Buildings 135,659,231 547,331 128,295 136,078,267
Infrastructure 267,936,755 9,670,354 20,069 277,587,040
Improvements other than buildings 27,779,676 715,667 - 28,495,343
Equipment 64,050,845 7,530,471 4,440,895 67,140,421
Intangible assets 1,536,007 10,015 - 1,546,022Total Capital Assets beingdepreciated 496,962,514 18,473,838 4,589,259 510,847,093
Less Accumulated Depreciation:
Buildings 44,508,827 3,545,180 98,092 47,955,915
Infrastructure 81,364,471 7,444,223 - 88,808,694
Improvements other than buildings 16,076,198 1,094,755 - 17,170,953
Equipment 45,988,437 4,967,319 4,398,708 46,557,048
Intangible assets 751,133 133,914 - 885,047
Total Accumulated Depreciation 188,689,066 17,185,391 4,496,800 201,377,657
Total Capital Assets beingdepreciated, net 308,273,448 1,288,447 92,459 309,469,436Governmental Activities CapitalAssets, Net $ 339,469,145 $ 2,070,069 $ 2,234,476 $ 339,304,738
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
44
NOTE F – CAPITAL ASSETS (CONTINUED)
BeginningBalance Increases Decreases
EndingBalance
Business-Type ActivitiesCapital assets not beingdepreciated:
Land $ 8,380,601 $ 1,849,960 $ 30,000 $ 10,200,561
Construction in Progress 36,995,284 27,706,770 13,285,180 51,416,874Total Capital Assets not beingdepreciated 45,375,885 29,556,730 13,315,180 61,617,435
Capital assets being depreciated:
Buildings 14,481,252 5,356,667 - 19,837,919
Infrastructure 2,652,910 - - 2,652,910
Improvements other than buildings 322,619,618 6,314,912 281,448 328,653,082
Equipment 8,102,201 626,996 321,300 8,407,897Total Capital Assets beingdepreciated 347,855,981 12,298,575 602,748 359,551,808
Less Accumulated Depreciation:
Buildings 4,141,100 566,547 - 4,707,647
Infrastructure 397,668 71,051 - 468,719
Improvements other than buildings 134,960,217 8,921,802 13,132 143,868,887
Equipment 5,070,407 677,554 321,300 5,426,661
Total Accumulated Depreciation 144,569,392 10,236,954 334,432 154,471,914
Total Capital Assets beingdepreciated, net 203,286,589 2,061,621 268,316 205,079,894
Business-Type Activities CapitalAssets, Net $ 248,662,474 $ 31,618,351 $ 13,583,496 $ 266,697,329
Depreciation expense was charged to functions as follows:
Governmental ActivitiesGeneral Government $ 3,688,353Public Safety 2,679,040Physical Environment 116,025Transportation 7,964,872Economic Environment 32,591Human Services 1,724,660Culture and Recreation 827,540Court Operations 152,310
Total Depreciation for Governmental Activities $ 17,185,391
Business-Type ActivitiesWater and Sewer $ 8,248,365Aviation Operations 826,288Waste Management 1,114,536Building Department 47,765
Total Depreciation for Business-Type Activities $ 10,236,954
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
45
NOTE F – CAPITAL ASSETS (CONTINUED)
Interest incurred during the period of construction and preparation for use of business-type assets constructed is
capitalized as part of those assets. During the year ended September 30, 2016, interest costs incurred totaled
$2,405,055 for the Water and Sewer District and $74,516 for the Aviation Operations, of which $766,199 was
capitalized as an asset of the Water and Sewer District.
Construction or capital improvement commitments outstanding as measured by purchase orders and contracts
outstanding at September 30, 2016 were as follows:
ConstructionCommitmentsOutstanding
General Fund $ 741,018
Transportation Trust and Gas Taxes 2,306,204
Impact Fees Capital Project Fund 500,909
Non-major governmental funds:
Stormwater Management 1,242,713
Court-Related Funds 27,296
Municipal Service Benefit Units 42,016
Hernando Co Fire Rescue-Rescue 79,453
Misc Special Revenue Funds 58,649
Water and Sewer District 2,385,318
Aviation Operations 1,048,063
Waste Management 81,107
Internal service funds:
Central Fueling 33,495
Fleet Replacement 2,054,673
County Health Insurance 1,022
Total $ 10,601,936
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
46
NOTE G – INTERFUND TRANSACTIONS
1. DUE TO / DUE FROM OTHER FUNDS
Interfund balances at September 30, 2016 were as follows:
InterfundReceivable
InterfundPayable
General FundTransportation Trust and Gas Taxes $ - $ 78,659Hernando County Fire Rescue-Fire - 257,393Non-major governmental funds 178,738 112,558Waste Management - 67,647Internal Service Funds 1,819 -Total General Fund 180,557 516,257
Transportation Trust and Gas TaxesGeneral Fund 78,659 -Non-major governmental funds 470 -Total Transportation Trust 79,129 -
Hernando County Fire Rescue-FireGeneral Fund 257,393 -
Non-major governmental fundsGeneral Fund 112,558 178,738Transportation Trust and Gas Taxes - 470Non-major governmental funds 516 516Water and Sewer District - 351,036
Total Non-major governmental funds 113,074 530,760
Water and Sewer DistrictNon-major governmental funds 351,036 -
Waste Management FundGeneral Fund 67,647 -
Internal Service FundsGeneral Fund - 1,819Internal Service Funds 2,286 2,286
Total Internal Service Funds 2,286 4,105
Total Due To/Due From Other Funds $ 1,051,122 $ 1,051,122
The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods
and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting
system, and (3) payments between funds are made. The outstanding balances generally are the result of one
fund providing services to another fund.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
47
NOTE G – INTERFUND TRANSACTIONS (CONTINUED)
2. ADVANCES TO / ADVANCES FROM OTHER FUNDS
Individual interfund advances were as follows:
Advances toOther Funds
Advancesfrom Other
Funds
General Fund $ 4,200,000 $ -
Hernando County Fire Rescue-FireThe General Fund advanced $3,750,000 at 2.5% interest, - 3,750,000to Hernando County Fire Rescue-Fire to cover a shortfallIn funds needed for operations. Final reimbursement isscheduled for fiscal year 2021.
Special Revenue FundsMiscellaneous Special Revenue Funds
The General Fund advanced $450,000 at 0% interest, to - 450,000establish a separate fund within Miscellaneous SpecialRevenue funds for the Hernando/Citrus MetropolitanPlanning Organization. Final reimbursement is scheduledfor fiscal year 2017.
Multiservice Benefit UnitsThe Water and Sewer District advanced $82,000 at 0% - 82,000interest to the River Run and Waters of Weeki WacheeForce Main MSBUs to cover anticipated shortfall in funding.Final reimbursement is scheduled for fiscal year 2019.
Business-Type ActivitiesWater and Sewer District 82,000 -
Total Advances To/Advances From Other Funds $ 4,282,000 $ 4,282,000
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
48
NOTE G – INTERFUND TRANSACTIONS (CONTINUED)
3. INTERFUND TRANSFERS
Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund
that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting
the receipts to the debt service fund as debt service payments become due and (3) use unrestricted revenues
collected in the General Fund to finance various programs accounted for in other funds in accordance with
budgetary authorizations.
Transfers In Transfers OutGeneral Fund
Transportation Trust and Gas Taxes $ 442,621 $ 85,119Hernando County Fire Rescue-Fire - 257,393Non-major governmental funds 178,738 3,682,360Waste Management - 67,647Internal Service Funds 571,001 -Total General Fund 1,192,360 4,092,519
Transportation Trust and Gas TaxesGeneral Fund 78,659 442,621Non-major governmental funds 1,272,095 2,403,010Internal Service Funds 434,127 -Total Transportation Trust 1,784,881 2,845,631
Impact Fees Capital Project FundNon-major governmental funds - 486,512
Hernando County Fire Rescue-FireGeneral Fund 257,393 -Non-major governmental funds 440,500 143,409Internal Service Funds 405,964 -Total Hernando County Fire Rescue-Fire 1,103,857 143,409
Non-major governmental fundsGeneral Fund 3,204,290 178,738Transportation Trust and Gas Taxes 88,572 1,712,595Impact Fees Capital Project Fund 486,512 -Hernando County Fire Rescue-Fire 143,409 -Non-major governmental funds 2,838,680 516Water and Sewer District - 9,392Internal Service Funds 146,305 -Total Non-major governmental funds 6,907,768 1,901,241
Water and Sewer DistrictNon-major governmental funds 9,392 -Aviation Operations 242,576 -Internal Service Funds 579,636 -Total Water and Sewer District 831,604 -
Aviation OperationsWater & Sewer District 242,576Internal Service Funds 20,127 -Total Aviation Operations 20,127 242,576
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
49
NOTE G – INTERFUND TRANSACTIONS (CONTINUED)
Transfers In Transfers Out
Waste Management FundGeneral Fund $ 67,647 $ -Internal Service Funds 273,232 -
Total Waste Management Fund 340,879 -
Building DepartmentInternal Service Funds 47,478 -
Internal Service FundsGeneral Fund - 571,001Transportation Trust and Gas Taxes - 434,127Hernando County Fire Rescue-Fire - 405,964Non-major governmental funds - 185,501Water and Sewer District - 579,636Aviation Operations - 20,127Waste Management - 273,232Building Department - 47,478Internal Service Funds 22,675 22,675
Total Internal Service Funds 22,675 2,539,741
Total Interfund Transfers $ 12,251,629 $ 12,251,629
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
50
NOTE H – LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities:
BeginningBalance Additions Reductions
EndingBalance
DueWithin
One YearGovernmental Activities
Bonds Payable $ 5,180,000 $ - $ 1,230,000 $ 3,950,000 $ 1,270,000
Net Bond Premium 28,781 - 14,698 14,083 2,643
Total Bonds Payable 5,208,781 - 1,244,698 3,964,083 1,272,643
Loans & Notes Payable 31,665,453 756,845 2,570,081 29,852,217 2,605,115
Leases Payable 54,143 - 54,143 - -
Compensated Absences 7,875,944 6,043,457 6,365,926 7,553,475 6,639,642
Other Post EmploymentBenefits 8,152,257 905,666 - 9,057,923 -
Net Pension Liability 61,676,029 52,357,103 - 114,033,132 -
Claims Liabilities 4,103,747 15,309,990 15,831,695 3,582,042 2,932,042
Total $ 118,736,354 $ 75,373,061 $ 26,066,543 $ 168,042,872 $ 13,449,442
BeginningBalance Additions Reductions
EndingBalance
DueWithin
One YearBusiness-Type Activities
Bonds Payable $ 35,014,950 $ - $ 2,210,000 $ 32,804,950 $ 2,305,000
Net Bond Premium 3,322,523 - 178,783 3,143,740 178,783
Total Bonds Payable 38,337,473 - 2,388,783 35,948,690 2,483,783
Loans & Notes Payable 40,540,436 18,433,372 1,235,013 57,738,795 1,339,552
Compensated Absences 833,952 705,757 745,563 794,146 722,673
Other Post EmploymentBenefits 784,873 71,894 - 856,767 -
Net Pension Liability 4,497,439 3,419,668 - 7,917,107 -
LandfillClosure/Postclosure 4,887,930 - 532,279 4,355,651 -
Total $ 89,882,103 $ 22,630,691 $ 4,901,638 $ 107,611,156 $ 4,546,008
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
51
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
See Note I for a discussion of the Net Pension Liability. See Note J for a discussion of the liability for Other Post-
Employment Benefits. See Note M for a discussion of the liability for Claims Liabilities. See Note N for a discussion
of the liability for landfill closure/postclosure.
1. LOANS & NOTES PAYABLE
Summary of Loans & Notes Payable
GovernmentalActivities
Business-TypeActivities
Non-revolving Lines of Credit $ 7,269,217 $ 1,942,728
State Revolving Loans - 55,796,067
Other Loans and Notes 22,583,000 -
Total $ 29,852,217 $ 57,738,795
Governmental Activities-Governmental Funds
The following are summaries of Non-Revolving Lines of Credit at September 30, 2016:
Non-revolving line of credit dated October 22, 2008 with a bank for$4,000,000 to be used to finance improvement projects. The minimumdraw for a project is $50,000 and the resulting note is to be amortized over3, 5, 7 or 10 years, as determined at the time of the draw. Payment ofprincipal and interest on these notes is to be made from specialassessments levied and collected for the project. As of year-end thefollowing notes had been executed under this agreement:
Desert Sparrow Paving. Applicable rate of interest: 4.76%. Averageannual principal payments of $12,937 due until May 1, 2018. Interest ispaid semi-annually May 1 and November 1. $ 24,138
Bahama Swallow Paving. Applicable rate of interest: 4.76%. Averageannual principal payments of $13,051 due until May 1, 2018. Interest ispaid semi-annually May 1 and November 1. 24,350
Eskimo Curlew Paving. Applicable rate of interest: 4.76%. Averageannual principal payments of $8,711 due until May 1, 2018. Interest is paidsemi-annually May 1 and November 1. 16,253
Flock Avenue Paving. Applicable rate of interest: 4.04%. Average annualprincipal payments of $10,140 due until May 1, 2019. Interest is paid semi-annually May 1 and November 1. 28,118
Olson Road Paving. Applicable rate of interest: 4.04%. Average annualprincipal payments of $11,097 due until May 1, 2019. Interest is paid semi-annually May 1 and November 1. 30,772
Osprey Avenue Paving. Applicable rate of interest: 4.04%. Averageannual principal payments of $6,402 due until November 1, 2019. Interestis paid semi-annually May 1 and November 1. 17,753
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
52
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
Dotted Wren Paving. Applicable rate of interest: 3.41%. Average annualprincipal payments of $4,667 due until May 1, 2021. Interest is paid semi-annually May 1 and November 1. $ 20,695
Mountain Mockingbird/Marvista Court Paving. Applicable rate of interest:3.41%. Average annual principal payments of $5,993 due until May 1,2021. Interest is paid semi-annually May 1 and November 1. 26,576
Golden Avenue Paving. Applicable rate of interest: 3.41%. Averageannual principal payments of $2,451 due until May 1, 2021. Interest is paidsemi-annually May 1 and November 1. 10,867
Owl Road Paving. Applicable rate of interest: 3.41%. Average annualprincipal payments of $8,504 due until May 1, 2021. Interest is paid semi-annually May 1 and November 1. 37,706
Croft Lane Paving. Applicable rate of interest: 3.41%. Average annualprincipal payments of $2,661 due until May 1, 2021. Interest is paid semi-annually May 1 and November 1. 11,798
Nuzum Paving. Applicable rate of interest: 3.41%. Average annualprincipal payments of $11,391 due until May 1, 2021. Interest is paid semi-annually May 1 and November 1. 50,510
$ 299,536
Non-revolving line of credit dated November 13, 2012 with a bank for$7,500,000 to be used to finance improvement projects. The minimumdraw for a project is $50,000 and the resulting note is to be amortized over3, 5, 7 or 10 years, as determined at the time of the draw. Payment ofprincipal and interest on these notes is to be made from specialassessments levied and collected for the project. As of year-end thefollowing notes had been executed under this agreement:
English Sparrow Paving. Applicable rate of interest: 1.81%. Averageannual principal payments of $5,463 due until May 1, 2023. Interest is paidsemi-annually May 1 and November 1. $ 33,640
Flock West Paving. Applicable rate of interest: 1.81%. Average annualprincipal payments of $1,252 due until May 1, 2023. Interest is paid semi-annually May 1 and November 1. 7,710
Flatwood Paving. Applicable rate of interest: 1.81%. Average annualprincipal payments of $5,680 due until May 1, 2023. Interest is paid semi-annually May 1 and November 1. 34,974
Lomita Wren Paving. Applicable rate of interest: 1.81%. Average annualprincipal payments of $2,885 due until May 1, 2023. Interest is paid semi-annually May 1 and November 1. 17,765
Marvelwood Paving. Applicable rate of interest: 1.81%. Average annualprincipal payments of $13,610 due until May 1, 2023. Interest is paid semi-annually May 1 and November 1. 83,803
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
53
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
Phillips Paving. Applicable rate of interest: 1.81%. Average annualprincipal payments of $7,923 due until May 1, 2023. Interest is paid semi-annually May 1 and November 1. $ 48,783
Flicker Road Paving. Applicable rate of interest: 2.55%. Average annualprincipal payments of $4,081 due until May 1, 2023. Interest is paid semi-annually May 1 and November 1. 25,464
State Road Canal Dredge. Applicable rate of interest: 2.55%. Averageannual principal payments of $11,757 due until May 1, 2023. Interest ispaid semi-annually May 1 and November 1. 73,367
Hernando County Fire Rescue District Fire Engine. Applicable rate ofinterest: 1.81%. Average annual principal payments of $75,163 due untilMay 1, 2018. Interest is paid semi-annually May 1 and November 1. 145,241
County Radio System Upgrade. Applicable rate of interest: 1.91%.Average annual principal payments of $422,965 due until May 1, 2023.Interest is paid semi-annually May 1 and November 1. 2,709,776
Hernando Beach Volunteer Fire Department Fire Engine. Applicable rateof interest: 2.29%. Average annual principal payment of $46,809 due untilMay 1, 2023. Interest is paid semi-annually May 1 and November 1. 313,159
$ 3,493,682
Non-revolving line of credit dated August 4, 2014 with a bank for$10,000,000 to be used to finance improvement projects. The minimumdraw for a project is $50,000 and the resulting note is to be amortized over3, 5, 7, 10 or 15 years, as determined at the time of the draw. Payment ofprincipal and interest on these notes is secured by covenant to budget andappropriate legally available non-ad valorem revenues or specialassessments levied and collected for the project. As of year-end thefollowing notes had been executed under this agreement:
Courthouse Energy Performance Study. Applicable rate of interest: 2.8%.Average annual principal payment of $62,848 due until May 1, 2029.Interest is paid semi-annually May 1 and November 1. $ 677,018
Phillips East Paving. Applicable rate of interest: 2.51%. Average annualprincipal payments of $8,808 due until May 1, 2024. Interest is paid semi-annually May 1 and November 1. 85,120
Puffin Paving. Applicable rate of interest: 2.51%. Average annual principalpayments of $1,296 due until May 1, 2024. Interest is paid semi-annuallyMay 1 and November 1. 12,524
Grass Finch Paving. Applicable rate of interest: 2.51%. Average annualprincipal payments of $3,181 due until May 1, 2024. Interest is paid semi-annually May 1 and November 1. 30,740
Harris Hawk Paving. Applicable rate of interest: 2.51%. Average annualprincipal payments of $9,500 due until May 1, 2024. Interest is paid semi-annually May 1 and November 1. 91,810
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
54
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
Royal Highlands Area A Paving. Applicable rate of interest: 2.53%.Average annual principal payments of $12,361 due until May 1, 2024.Interest is paid semi-annually May 1 and November 1. $ 88,521
Ostrom/Allen Paving. Applicable rate of interest: 2.53%. Average annualprincipal payments of $4,588 due until May 1, 2024. Interest is paid semi-annually May 1 and November 1. 32,857
Benes Roush Paving. Applicable rate of interest: 2.53%. Average annualprincipal payments of $3,604 due until May 1, 2024. Interest is paid semi-annually May 1 and November 1. 25,815
Eider Paving. Applicable rate of interest: 2.53%. Average annual principalpayments of $2,914 due until May 1, 2024. Interest is paid semi-annuallyMay 1 and November 1. 20,871
Helene Paving. Applicable rate of interest: 2.53%. Average annualprincipal payments of $6,025 due until May 1, 2024. Interest is paid semi-annually May 1 and November 1. 43,146
Hancock Lake Paving. Applicable rate of interest: 2.44%. Average annualprincipal payments of $14,079 due until May 1, 2025. Interest is paid semi-annually May 1 and November 1. 112,565
Crum Paving. Applicable rate of interest: 2.44%. Average annual principalpayments of $8,529 due until May 1, 2025. Interest is paid semi-annuallyMay 1 and November 1. 68,192
Hernando County Fire Department Fire Engine. Applicable rate of interest:2.52%. Average annual principal payment of $147,080 due until May 1,2025. Interest is paid semi-annually May 1 and November 1. 1,171,249
Hernando County Fire Department Emergency Services Equipment.Applicable rate of interest: 2.52%. Average annual principal payment of$42,265 due until May 1, 2025. Interest is paid semi-annually May 1 andNovember 1. 336,574
$ 2,797,002Non-revolving line of credit dated October 22, 2015 with a bank for$15,000,000 to be used to finance improvement projects. The minimumdraw for a project is $50,000 and the resulting note is to be amortized over3, 5, 7, 10 or 15 years, as determined at the time of the draw. Payment ofprincipal and interest on these notes is secured by covenant to budget andappropriate legally available non-ad valorem revenues or specialassessments levied and collected for the project. As of year-end thefollowing notes had been executed under this agreement:
Royal Highlands Area C Paving. Applicable rate of interest: 2.73%.Average annual principal payments of $41,148 due until May 1, 2025.Interest is paid semi-annually May 1 and November 1. $ 369,155
Royal Highlands Area E Paving. Applicable rate of interest: 2.73%.Average annual principal payments of $24,542 due until May 1, 2025.Interest is paid semi-annually May 1 and November 1. 220,172
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
55
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
Royal Highlands Area F Paving. Applicable rate of interest: 2.73%.Average annual principal payments of $9,995 due until May 1, 2025.Interest is paid semi-annually May 1 and November 1. 89,670
$ 678,997
$ 7,269,217
The following is a summary of other loans at September 30, 2016:
Non-Ad Valorem Refunding Revenue Note, Series 2012 dated November13, 2012 with a bank for $24,430,000 to be used to refinance CapitalImprovement and Refunding Bonds, Series 2002 and a portion of CapitalImprovement and Refunding Bonds, Series 2004. Payment of principaland interest on these notes is secured by covenant to budget andappropriate legally available non-ad valorem revenues.
Applicable rate of interest: 2.572%. Average annual principal payments of$1,987,624 due until February 1, 2028. Interest is paid semi-annuallyFebruary 1 and August 1. $ 22,583,000
Total $ 29,852,217
Below is a summary of debt service requirements until maturity for the Governmental Activities Loans & Notes
Payable:
Year endedSeptember 30 Principal Interest Total
2017 $ 2,605,116 $ 729,994 $ 3,335,110
2018 3,623,083 652,429 4,275,512
2019 3,604,279 520,511 4,124,790
2020 3,648,194 470,172 4,118,366
2021 3,737,972 377,061 4,115,033
2022-2026 9,437,113 1,000,689 10,437,802
2027-2029 3,196,460 88,491 3,284,951
Total $ 29,852,217 $ 3,839,347 $ 33,691,564
Business-Type Activities
The following is a summary of Loans & Notes Payable at September 30, 2016:
Aviation Operations
Non-revolving line of credit dated October 22, 2008 with a bank for $4,000,000 to be used torefinance Florida Local Government Finance Commission Pooled Commercial Paper Note,Series A, Draw No. A-1-5, originally issued to finance costs of the extension of Sgt. Lea MillsBoulevard and the Aerial Way extension to Spring Hill Drive at Hernando County Airport. Theminimum draw for a project is $50,000 and the resulting note is to be amortized over 3, 5, 7 or
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
56
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
10 years, as determined at the time of the draw. As of year-end the following note had beenexecuted under this agreement:
Applicable rate of interest: 2.50%. Average annual principal payments of $123,350 due untilMay 1, 2018. Interest is paid semi-annually May 1 and November 1. $ 232,766
Non-revolving line of credit dated October 22, 2015 with a bank for $15,000,000 to be used forconstruction of multiple T-Hangar buildings known as Southeast T-Hangar Construction PhaseIII. The minimum draw for a project is $50,000 and the resulting note is to be amortized over 3,5, 7, 10, or 15 years, as determined at the time of the draw. As of year-end the following notehad been executed under this agreement:
Applicable rate of interest: 3.92%. Average annual principal payments of $190,000 due untilMay 1, 2025. Interest is paid semi-annually May 1 and November 1. $ 1,709,962
Total $ 1,942,728
Water & Sewer District
Each of the following State Revolving Loans is secured by a lien on net revenues andconnections fees. These liens are junior, inferior and subordinate to the senior liens on theWater and Sewer Revenue Bonds.
State Revolving Fund Loan due in semi-annual installments of $58,053 beginning December15, 2012. The loan has an interest rate of 2.90% and matures June 2032. $ 1,477,896
State Revolving Fund Construction Loan due in semi-annual installments of $358,255beginning October 15, 2012. The loan has an interest rate of 2.29% to 2.41% and maturesApril 2032. 9,473,087
State Revolving Fund Construction Loan due in semi-annual installments of $86,604beginning October 15, 2012. The loan has an interest rate of 2.16% and matures April 2032. 2,332,625
State Revolving Fund Construction Loan due in semi-annual installments of $191,200beginning November 15, 2012. The loan has an interest rate of 2.37% and matures May 2032. 5,067,434
State Revolving Fund Construction Loan due in semi-annual installments of $87,779beginning December 15, 2016. The loan has an interest rate of 2.23%. Maturity will bedetermined when the final financed amount has been determined. 2,545,364
State Revolving Fund Construction Loan due in semi-annual installments of $1,279,708beginning November 15, 2015. The loan has an interest rate of 1.82% to 2.23%. Maturity willbe determined when the final financed amount has been determined. 34,899,661
$ 55,796,067
Total $ 57,738,795
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
57
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
Below is a summary of debt service requirements until maturity for the Business-Type Activities Loans & Notes
Payable:
Year EndedSeptember 30 Principal Interest Total
2017 $ 1,339,552 $ 1,279,305 $ 2,623,577
2018 3,937,034 1,212,369 5,149,403
2019 3,852,697 1,125,248 4,977,945
2020 3,886,352 1,040,166 4,926,518
2021 3,920,924 954,172 4,875,096
2022-2026 19,927,905 3,447,048 23,374,953
2027-2031 17,270,522 1,342,155 18,612,677
2032-2036 3,603,809 90,324 3,689,413
Total $ 57,738,795 $ 10,490,787 $ 68,229,582
2. BONDS PAYABLE
Governmental Activities
CAPITAL IMPROVEMENT AND REFUNDING REVENUE BONDS, SERIES 2004
The Hernando County Capital Improvement and Refunding Revenue Bonds, Series 2004, dated March 10, 2004,
in the amount of $23,950,000 were issued during the fiscal year ended September 30, 2004. The bonds were
issued to: legally defease the remaining Certificates of Participation, Series 1992; to fund all or a portion of the
costs of the acquisition, construction and equipping of various capital improvements within the county, including,
but not limited to the County Jail expansion, an emergency operations center, courtroom improvements and library
improvements; and to pay certain costs and expenses related to the issuance of the Series 2004 bonds, including
the premiums for a municipal bond insurance policy and a reserve account insurance policy.
The bonds are secured by a pledge of the receipts of the County from the proceeds of the local government half-
cent sales tax pursuant to Part VI, Chapter 218, Florida Statutes. In addition, the bonds are secured by the monies
and investments in the accounts established under the resolution and the income and earnings from investments
in those funds. For the fiscal year 2016, pledged revenues in the amount of $9.1 million provided a coverage ratio
of 9.55 times the annual debt service for the Capital Improvement Bonds, Series 2004.
Interest on the bonds is payable February 1 and August 1 of each year commencing August 1, 2004. The bonds
carry interest rates ranging from 2.0% to 4.25% depending upon maturity date. Bonds maturing before February
1, 2015 are not subject to optional redemption prior to maturity. The bonds maturing on February 1, 2015 and
thereafter are subject to redemption prior to stated maturity at the option of the County, in whole or in part, on
February 1, 2014 or on any date thereafter at a redemption price equal to 100% of the principal amount of the
Series 2004 bonds plus accrued interest.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
58
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
NON-AD VALOREM REFUNDING REVENUE BONDS, SERIES 2010
Non-Ad Valorem Refunding Revenue Bonds, Series 2010 dated February 19, 2010 in the aggregate amount of
$9,980,000 were issued during the fiscal year ended September 30, 2010. Of the total bonds issued, the portion
attributable to the Governmental Fund is $5,700,000. The bonds were issued to legally defease all of the
outstanding Capital Improvement Revenue Refunding Bonds, Series 1998 and a portion of the Water and Sewer
Refunding Revenue Bonds, Series 1998, and to pay certain costs and expenses relating to the issuance of the
Series 2010 Bonds, including the premium for a financial guaranty insurance policy.
The Series 2010 Bonds are payable solely from the County’s covenant to budget and appropriate in its annual
budget Non-Ad Valorem revenues sufficient to pay principal and interest when due and pay all required deposits
to the Rebate Fund. For the fiscal year 2016, pledged revenues in the amount of $34.7 million provided a coverage
ratio of 13.07 times the annual debt service for the combined Non-Ad Valorem Refunding Revenue Bonds, Series
2010 and the Non-Ad Valorem Refunding Revenue Note, Series 2012.
Interest on the bonds is payable February 1 and August 1 of each year, commencing August 2010. The bonds
carry interest rates varying from 2.0% to 4.125%, depending upon maturity date. Bonds maturing on or before
February 1, 2020 are not subject to optional redemption prior to their respective stated dates of maturity. Bonds
maturing on February 1, 2021 and thereafter are subject to redemption prior to their respective dates of maturity.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
59
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
The following are the debt service requirements until maturity for the governmental activity bonds outstanding as
of September 30, 2016:
Capital Improvementand RefundingRevenue Bonds
Series 2004
Non-Ad ValoremRefunding
Revenue BondsSeries 2010
Year Principal Interest Principal Interest
2017 $ 935,000 $ 16,363 $ 335,000 $ 107,019
2018 345,000 96,388
2019 350,000 84,656
2020 370,000 71,594
2021 380,000 57,294
2022-2024 1,235,000 76,628
Total $ 935,000 $ 16,363 $ 3,015,000 $ 493,579
Total
Year Principal Interest
2017 $ 1,270,000 $ 123,382
2018 345,000 96,388
2019 350,000 84,656
2020 370,000 71,594
2021 380,000 57,294
2022-2024 1,235,000 76,628
Total $ 3,950,000 $ 509,942
Business-Type Activities
Water & Sewer District
HOLLAND SPRINGS BONDS
Revenue bonds (“Series E Bonds”) were issued to finance the construction of the Holland Springs water project,
in the amount of $659,450. The bonds were scheduled to mature April 1, 2025 with interest thereon at the rate of
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
60
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
7% per year payable each April 1 and October 1 beginning October 1, 1985. During the fiscal year ended
September 30, 1989, an amended agreement was executed whereby $619,500 of these revenue bonds were
cancelled in exchange for connection fee credits to the developer in a like amount. The remaining $39,950 of
bonds remain outstanding and payable in accordance with the original bond provisions. The bonds are payable
from Net Revenues only up to an amount per annum equal to twenty-five percent (25%) of that portion of the
revenues in the immediately preceding fiscal year derived from the Holland Springs system in excess of $20,000,
as certified by the Consulting Engineer.
In the event that insufficient revenues to pay principal of and interest on the Series E Bonds are so derived from
the Holland Springs system at the maturity date of the Series E Bonds, the lien of the Series E Bonds on Net
Revenues shall be extinguished and the County shall be under no obligation to provide for the payment of the
principal or interest on the Series E Bonds. As of year-end, insufficient revenues have been generated to require
payment of principal or interest on these bonds. As such, these bonds have not been included in the following
schedule of debt service requirements.
NON-AD VALOREM REFUNDING REVENUE BONDS, SERIES 2010
Non-Ad Valorem Refunding Revenue Bonds, Series 2010 dated February 19, 2010 in the aggregate amount of
$9,980,000 were issued during the fiscal year ended September 30, 2010. Of the total bonds issued, the portion
attributable to the Water and Sewer District Fund is $4,280,000. The bonds were issued to legally defease all of
the outstanding Capital Improvement Revenue Refunding Bonds, Series 1998 and a portion of the Water and
Sewer Refunding Revenue Bonds, Series 1998, and to pay certain costs and expenses relating to the issuance of
the Series 2010 Bonds, including the premium for a financial guaranty insurance policy.
The Series 2010 Bonds are payable solely from the County’s covenant to budget and appropriate in its annual
budget Non-Ad Valorem revenues sufficient to pay principal and interest when due and pay all required deposits
to the Rebate Fund. Because the pledge for these bonds is from Non-Ad Valorem revenues, and not from revenues
of the Water and Sewer system, these bonds are not considered legal debt of the Water and Sewer Fund. It is,
however, expected that Water and Sewer will pay their portion of the debt service. We have, therefore, included
the debt as a liability for financial statement purposes. For the fiscal year 2016, pledged revenues in the amount
of $16 million provided a coverage ratio of 4.29 times the annual debt service for the combined Water and Sewer
Bonds, Series 2013A and the Water and Sewer portion of the Non-Ad Valorem Refunding Revenue Bonds, Series
2010.
Interest on the bonds is payable February 1 and August 1 of each year, commencing August 2010. The bonds
carry interest rates varying from 2.0% to 4.125%, depending upon maturity date. Bonds maturing on or before
February 1, 2020 are not subject to optional redemption prior to their respective stated dates of maturity. Bonds
maturing on February 1, 2021 and thereafter are subject to redemption prior to their respective dates of maturity.
WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2013A
Water and Sewer Refunding Revenue Bonds, Series 2013A dated July 6, 2013 in the aggregate amount of
$36,160,000 were issued during the fiscal year ended September 30, 2013. The bonds were issued to legally
defease all of the outstanding Water and Sewer Refunding Revenue Bonds, Series 2003 and Water and Sewer
Revenue Bonds, Series 2004, and to pay certain costs and expenses relating to the issuance of the Series 2013A
Bonds, including the premiums for municipal bond insurance policy and reserve account insurance.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
61
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
The Series 2013A Bonds are payable solely from and secured by a lien upon and pledge of the Net Revenues and
Connection Fees of the County’s water and sewer system. For the fiscal year 2016, pledged revenues in the
amount of $16 million provided a coverage ratio of 4.29 times the annual debt service for the combined Water and
Sewer Refunding Revenue Bonds, Series 2013A, and the Water and Sewer portion of the Non-Ad Valorem
Refunding Revenue Bonds, Series 2010.
Interest on the bonds is payable June 1 and December 1 of each year, commencing December 2013. The bonds
carry interest rates varying from 2.0% to 5.0%, depending upon maturity date. Bonds maturing on or before June
1, 2023 are not subject to optional redemption prior to their respective stated dates of maturity. Bonds maturing
after June 1, 2023 are subject to redemption prior to their respective dates of maturity.
The following are the debt service requirements until maturity for the Hernando County Water and Sewer District
revenue bonds, excluding the Holland Springs Bonds, as noted previously:
Non-Ad ValoremRefunding
Revenue BondsSeries 2010
Water and SewerRefunding
Revenue BondsSeries 2013A
Year Principal Interest Principal Interest
2017 $ 505,000 $ 43,038 $ 1,800,000 $ 1,464,356
2018 515,000 27,094 1,870,000 1,392,356
2019 535,000 9,363 1,960,000 1,298,856
2020 - - 1,200,000 1,200,856
2021 - - 1,260,000 1,140,856
2022-2026 - - 7,265,000 4,735,280
2027-2031 - - 9,210,000 2,796,530
2032-2034 - - 6,645,000 555,844
Total $ 1,555,000 $ 79,495 $ 31,210,000 $ 14,584,934
Total
Year Principal Interest
2017 $ 2,305,000 1,507,394
2018 2,385,000 1,419,450
2019 2,495,000 1,308,219
2020 1,200,000 1,200,856
2021 1,260,000 1,140,856
2022-2026 7,265,000 4,735,280
2027-2031 9,210,000 2,796,530
2032-2034 6,645,000 555,844
Total $ 32,765,000 $ 14,664,429
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
62
NOTE H – LONG-TERM LIABILITIES (CONTINUED)
The following is a reconciliation of total principal due on the Water and Sewer District’s revenue bonds as of
September 30, 2016, per the Statement of Net Position and the preceding amortization schedule:
Principal per amortization schedule $ 32,765,000
Unamortized premium as of September 30, 2016 3,143,740
Bonds not included in amortization schedule, as noted above:
Holland Springs Bonds 39,950
Total Carrying Value, Revenue Bonds 35,948,690
Current Portion, Revenue Bonds (2,305,000)
Current Portion of unamortized premium (178,783)
Long-Term Portion, Revenue Bonds $ 33,464,907
4. DEFEASED BONDS
In prior years, the County defeased certain revenue bonds by placing the proceeds of new bonds in an irrevocable
trust to provide for all future debt service payments on old bonds. Accordingly, the trust account assets and the
liability for the defeased bonds were not included in the County’s financial statements. As of September 30, 2016,
there were no defeased bonds.
5. DEBT COMPLIANCE
Various bond indentures contain significant limitations and restrictions on the County regarding annual debt service
requirements, the use of certain restricted accounts, minimum sinking fund balances, and minimum revenue bond
coverage. Management believes that the County has complied with all material financial related covenants.
6. CONDUIT DEBT OBLIGATIONS
Periodically, Hernando County has issued Industrial Revenue Development Bonds to provide financial assistance
to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in
the public interest. The bonds are secured by the property financed and are payable solely from payments received
on the underlying mortgage loans. Hernando County is not obligated in any manner for the repayment of the
bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
As of September 30, 2016 there was one series of outstanding Industrial Revenue Development Bonds, with an
outstanding principal amount of $168,076.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
63
NOTE I – RETIREMENT SYSTEM
General Information about the Florida Retirement System (FRS)
The Florida Retirement System (FRS) was created in Chapter 121, Florida Statutes, to provide a defined benefit
pension plan for participating public employees. The FRS was amended in 1998 to add the Deferred Retirement
Option Program (DROP) under the defined benefit plan and amended in 2000 to provide a defined contribution
plan alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined
contribution pension plan is the FRS Investment Plan. Chapter 112, Florida Statutes, established the Retiree
Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit pension plan, to assist
retired members of any state-administered retirement system in paying the costs of health insurance.
Essentially all regular employees are eligible to enroll as members of the state-administered FRS. Provisions
relating to FRS are established by Chapters 121 and 122, Florida Statutes; Chapter 112 Part IV, Florida Statutes;
Chapter 238, Florida Statutes and FRS Rules, Chapter 60S, Florida Administrative Code; wherein eligibility,
contributions, and benefits are defined and escribed in detail. Such provisions may be amended at any time by
further action from Florida Legislature. The FRS is a single retirement system administered by the Florida
Department of Management Services, Division of Retirement, and consists of two cost-sharing, multiple-employer
defined-benefit plans and other nonintegrated programs. A comprehensive annual financial report of the FRS,
which includes its financial statements, required supplementary information, actuarial report, and other relevant
information, is available from the Florida Department of Management Services’ web site (www.dms.myflorida.com).
For the year ended September 30, 2016, the County recorded pension payables of $872,256 related to FRS (all
plans) for the outstanding contributions to the Plans.
1. FRS PENSION PLAN
Plan Description. The FRS Pension Plan (Plan) is a cost-sharing multiple-employer defined benefit pension plan,
with a DROP for eligible employees. The general classes of membership applicable for the County are as follows:
Regular Class—Members of the Plan who do not qualify for membership in the other classes.
Elected County Officer Class—Members who hold specified elective offices in local government.
Senior Management Service Class—Members in senior management level positions.
Special Risk Class—Members who are employed as law enforcement, fire and rescue and others who meet
the criteria to qualify for this class.
Employees enrolled in the Plan prior to July 1, 2011, vest at six years of creditable service and employees enrolled
in the plan on or after July 1, 2011, vest at eight years of creditable service. All vested members enrolled prior to
July 1, 2011, are eligible for normal retirement benefits at age 62 or at any age after 30 years of service, except
for members classified as special risk who are eligible for normal retirement benefits at age 55 or at any age after
25 years of service. All members enrolled in the Plan on or after July 1, 2011, once vested, are eligible for normal
retirement benefits at age 65 or any time after 33 years of creditable service, except for members classified as
special risk who are eligible for normal retirement benefits at age 60 or at any age after 30 years of service.
Members of the plan may include up to four years of credit for military service toward creditable service. The Plan
also includes an early retirement provision; however, there is a benefit reduction for each year a member retires
before his or her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-
of-living adjustment to eligible participants.
DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal retirement
under the Plan to defer receipts of monthly benefit payments while continuing employment with an FRS employer.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
64
NOTE I – RETIREMENT SYSTEM (CONTINUED)
An employee may participate in DROP for a period not to exceed 60 months after electing to participate, except
that certain instructional personnel may participate for up to 96 months. During the period of DROP participation,
deferred monthly benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not
include amounts for DROP participants, as these members are considered retired and are not accruing additional
pension benefits.
Benefits Provided. Benefits under the Plan are computed on the basis of age and/or years of service, average
final compensation, and service credit. Credit for each year of service is expressed as a percentage of the average
final compensation. For members initially enrolled before July 1, 2011, the average final compensation is the
average of the five highest fiscal years’ earnings; for members initially enrolled on or after July 1, 2011, the average
final compensation is the average of the eight highest fiscal year’s earnings. The total percentage value of the
benefit received is determined by calculating the total value of all service, which is based on the retirement class
to which the member belonged when the service credit was earned. Certain members are eligible for in-line-of-
duty or regular disability and survivors’ benefits. The following chart shows the percentage value for each year of
service credit earned:
Class, Initial Enrollment and Retirement Age/Years of Service Percent Value
Regular Class Members Initially Enrolled Before July 1, 2011:Retirement up to age 62 or up to 30 years of service 1.60Retirement at age 63 or with 31 years of service 1.63Retirement at age 64 or with 32 years of service 1.65Retirement at age 65 or with 33 years of service 1.68
Regular Class Members Initially Enrolled on or After July 1, 2011:Retirement up to age 65 or up to 33 years of service 1.60Retirement at age 66 or with 34 years of service 1.63Retirement at age 67 or with 35 years of service 1.65Retirement at age 68 or with 36 years of service 1.68
Elected County Officers 3.00Senior Management Service Class 2.00Special Risk Class
Service from December 1, 1970 thru September 30, 1974 2.00Service on and after October 1, 1974 3.00
As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before July 1, 2011,
and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the
member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an
individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3%
determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied
by 3%. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after
retirement.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
65
NOTE I – RETIREMENT SYSTEM (CONTINUED)
Contributions. The Florida Legislature establishes contribution rates for participating employers and employees.
Contribution rates during the 2014-2015 fiscal year were as follows:
Year Ended June 30,2015
Year Ended June 30,2016
Percent of Gross Salary Percent of Gross Salary
Class Employee Employer Employee Employer
FRS, Regular 3.00 6.07 3.00 5.56
FRS. Elected County Officers 3.00 41.94 3.00 40.57
FRS, Senior Management Service 3.00 19.84 3.00 22.73
FRS, Special Risk Regular 3.00 18.52 3.00 20.34
DROP—Applicable to Members from All of theAbove Classes 0.00 11.02 0.00 11.22
FRS, Reemployed Retiree (1) (1) (1) (1)
Notes: (1) Contribution rates are dependent upon retirement class in which reemployed. Employer contributions are also required for
members in the FRS Investment Plan for a portion of the unfunded actuarial accrued liability.
The County contributions, including employee contributions, to the Plan totaled $10,927,087 for the fiscal year
ended September 30, 2016. This excludes the HIS defined benefit pension plan contributions.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions. At September 30, 2016, the County reported a liability of $94,646,464 for its
proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and
the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of
July 1, 2016. The County’s proportionate share of the net pension liability was based on the County’s 2015-16
fiscal year contributions relative to the 2015-16 fiscal year contributions of all participating members. At June 30,
2016, the County’s proportion was .374836315%, which was an increase of .038650175 from its proportion
measured as of June 30, 2015.
For the year ended September 30, 2016, the County recognized pension expense of $14,818,775 related to the
Plan. At September 30, 2016, the County reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Description
DeferredOutflows ofResources
DeferredInflows ofResources
Employer Contributions after Measurement Date $ 2,310,195 $ -
Difference between Expected and Actual Experience 7,246,861 881,223
Changes in Assumptions 5,725,828 -
Changes in Proportion and Difference between CountyContributions and Proportionate Share of Contributions 6,842,350 -
Net Difference between Projected and ActualEarnings on Pension Plan Investments 24,464,959 3,469,624
Total $ 46,590,193 $ 4,350,847
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
66
NOTE I – RETIREMENT SYSTEM (CONTINUED)
The deferred outflows of resources related to pensions, totaling $2,310,195, resulting from County contributions
subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year
ended September 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Fiscal Year
Ending Amount
2017 $ 5,422,661
2018 5,422,661
2019 14,960,620
2020 10,901,571
2021 2,410,278
Thereafter 811,360
Total $ 39,929,151
Actuarial Assumptions. The total pension liability in the July 1, 2015 actuarial valuation was determined using
the individual entry age cost method and the following actuarial assumptions:
Inflation 2.60%
Salary Increases 3.25% Average, Including Inflation
Investment Rate of Return 7.60% Net of Pension Plan Investment Expense,Including Inflation
Mortality rates were based on the Generational RP-2000 with Projection Scale BB, with adjustments for mortality
improvements based on Scale AA.
The actuarial assumptions used in the July 1, 2016 valuation were based on the results of an actuarial experience
study for the period July 1, 2008, through June 30, 2013.
The long-term expected rate of return on pension plan investments was not based on historical returns, but instead
is based on a forward-looking capital market economic model. The allocation policy's description of each asset
class was used to map the target allocation to the asset classes shown below. Each asset class assumption is
based on a consistent set of underlying assumptions, and includes an adjustment or the inflation assumption. The
target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are
summarized in the following table:
Asset ClassTarget
Allocation (1)
AnnualArithmetic
Return
Annual(Geometric)
ReturnStandardDeviation
Cash 1% 3.0% 3.0% 1.7%
Fixed Income 18% 4.7% 4.6% 4.6%
Global Equity 53% 8.1% 6.8% 17.2%
Real Estate (Property) 10% 6.4% 5.8% 12.0%
Private Equity 6% 11.5% 7.8% 30.0%
Strategic Investments 12% 6.1% 5.6% 11.1%
Total 100%
Assumed Inflation-Mean 2.6% 1.9%
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
67
NOTE I – RETIREMENT SYSTEM (CONTINUED)
Discount Rate. The discount rate used to measure the total pension liability was 7.60%. The Plan's fiduciary net
pension position was projected to be available to make all projected future benefit payments of current active and
inactive employees. Therefore, the discount rate for calculating the total pension liability is equal to the long-term
expected rate of return. The discount rate was 7.65% in the July 1, 2015 valuation.
Sensitivity of the County's Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate. The following presents the County's proportionate share of the net pension liability calculated using the
discount rate of 7.60%, as well as what the County's proportionate share of the net pension liability would be if it
were calculated using a discount rate that is 1-percentage-point lower (6.60%) or 1-percentage-point higher
(8.60%) than the current rate:
1% Decrease(6.60%)
CurrentDiscount Rate
(7.60%)1% Increase
(8.60%)County’s Proportionate Share of
Net Pension Liability $ 174,250,548 $ 94,646,464 $ 28,686,577
Pension Plan Fiduciary Net Position. Detailed information about the Plan's fiduciary net position is available in
the separately issued FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial
Report.
2. HIS PENSION PLAN
Plan Description. The HIS Pension Plan (HIS Plan) is a cost-sharing multiple-employer defined benefit pension
plan established under Section 112.363, Florida Statutes, and may be amended by the Florida Legislature at any
time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their
health insurance costs and is administered by the Division of Retirement within the Florida Department of
Management Systems.
Benefits Provided. For the fiscal year ended September 30, 2016, eligible retirees and beneficiaries received a
monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum
HIS payment of $30 and a maximum HIS payment of $150 per month, pursuant to Section 112.363, Florida
Statutes. To be eligible to receive a HIS Plan benefit, a retiree under a State-administered retirement system must
provide proof of health insurance coverage, which may include Medicare.
Contributions. The HIS Plan is funded by required contributions from FRS participating employers as set by the
Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members.
Effective July 1, 2015, the Legislature increased the HIS employer contribution rate from 1.26% to 1.66%, pursuant
to Section 112.363, Florida Statutes. The County contributed 100% of its statutorily required contributions for the
current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which
payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation.
In the event the legislative appropriation or available funds fail to provide a full subsidy benefit to all participants,
benefits may be reduced or cancelled.
The County's contributions to the HIS Plan totaled $1,190,541 for the fiscal year ended September 30, 2016.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
68
NOTE I – RETIREMENT SYSTEM (CONTINUED)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions. At September 30, 2016, the County reported a liability of $27,303,775 for its
proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and
the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of
July 1, 2016. The County’s proportionate share of the net pension liability was based on the County’s 2015-16
fiscal year contributions relative to the 2014-15 fiscal year contributions of all participating members. At June 30,
2016, the County’s proportion was .234274955%, which was an increase of .011196231 from its proportion
measured as of June 30, 2015.
For the year ended September 30, 2016, the County recognized pension expense of $2,491,983 related to the
Plan. At September 30, 2016, the County reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Description
DeferredOutflows ofResources
DeferredInflows ofResources
Employer Contributions after Measurement Date $ 279,122 $ -
Difference between Expected and Actual Experience - 62,187
Changes in Assumptions 4,284,657 -
Changes in Proportion and Difference between CountyContributions and Proportionate Share of Contributions 1,567,636 231,029
Net Difference between Projected and ActualEarnings on Pension Plan Investments 13,805 -
Total $ 6,145,220 $ 293,216
The deferred outflows of resources related to pensions, totaling $279,122, resulting from County contributions to
the HIS Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in
the year ended September 30, 2017. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized in pension expense as follows:
Fiscal Year
Ending Amount
2017 $ 981,967
2018 981,967
2019 979,338
2020 978,076
2021 899,453
Thereafter 752,081
Total $ 5,572,882
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
69
NOTE I – RETIREMENT SYSTEM (CONTINUED)
Actuarial Assumptions. The total pension liability in the July 1, 2016 actuarial valuation, was determined using
the individual entry age cost method and the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation 2.60%
Salary Increases 3.25% Average, Including Inflation
Investment Rate of Return 2.85% Net of Pension Plan Investment Expense,Including Inflation
Mortality rates were based on the Generational RP-2000 with Projected Scale BB.
The actuarial assumptions used in the July 1, 2016 valuation, were based on the results of an actuarial experience
study for the period July 1, 2008, through June 30, 2013.
Discount Rate. The discount rate used to measure the total pension liability was 2.85%. In general, the discount
rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term
expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is
essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single
equivalent discount rate is equal to the municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer
General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index.
Sensitivity of the County's Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate. The following presents the County's proportionate share of the net pension liability calculated using the
discount rate of 2.85%, as well as what the County's proportionate share of the net pension liability would be if it
were calculated using a discount rate that is 1-percentage-point lower (1.85%) or 1-percentage-point higher
(3.85%) than the current rate:
1% Decrease(1.85%)
CurrentDiscount Rate
(2.85%)1% Increase
(3.85%)County’s Proportionate Share of
Net Pension Liability $ 31,323,634 $ 27,303,775 $ 23,967,513
Pension Plan Fiduciary Net Pension. Detailed information about the HIS Plan's fiduciary net position is available
in the separately issued FRS Pension Plan and Other State Administered Systems Comprehensive Annual
Financial Report.
3. FRS-DEFINED CONTRIBUTION PENSION PLAN
The County contributes to the FRS Investment Plan (Investment Plan), a defined contribution pension plan, for its
eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the SBA,
and is reported in the SBA's annual financial statements and in the State of Florida Comprehensive Annual
Financial Report. Service retirement benefits are based upon the value of the member's account upon retirement.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
70
NOTE I – RETIREMENT SYSTEM (CONTINUED)
As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment
Plan in lieu of the FRS defined benefit plan. County employees participating in DROP are not eligible to participate
in the Investment Plan. Employer and employee contributions, including amounts contributed to the individual
member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment
funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be
amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee
contribution rates that are based on salary and membership class (Regular Class, Elected County Officials, etc.),
as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual
members allocate contributions and account balances among various approved investment choices. Allocations
to the Investment members' accounts during the 2015-16 fiscal year were as follows:
Class Percentage of Gross Contributions
FRS, Regular 3.30
FRS, Elected County Officers 8.34
FRS, Senior Management Services 4.67
FRS, Special Risk 11.00
For all membership classes, employees are immediately vested in their own contributions and are vested after one
year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service
credit originally earned under the Plan is transferred to the Investment Plan, the member must have the years of
service required for Plan vesting (including the service credit represented by the transferred funds) to be vested
for these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense account
for up to five years. If the employee returns to FRS-covered employment within the five-year period, the employee
will regain control over their account. If the employee does not return within the five-year period, the employee will
forfeit the accumulated account balance. Costs of administering the Investment Plan, including the FRS Financial
Guidance Program, are funded through an employer contribution of 0.04% of payroll and by forfeit benefits of
Investment Plan members. For the fiscal year September 30, 2016, the information for the amount of forfeitures
was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to
the County.
After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan,
structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested
for future distribution, or any combination of these options. Disability coverage is provided; the member may either
transfer the account balance to the Plan when approved for disability retirement to receive guaranteed lifetime
monthly benefits under the Plan, or remain in the Investment Plan and rely upon that account balance for retirement
income.
Pension expense for the County’s Investment Plan totaled $797,696 for the fiscal year ended September 30, 2016.
The amount of the County’s liability outstanding at year end for the investment plan was immaterial.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
71
NOTE J – POST EMPLOYMENT BENEFITS OTHER THAN PENSION
1. SUMMARY AND PLAN DESCRIPTION
In addition to the retirement plan described in Note I, the County provides post-retirement health care benefits in
accordance with Section 112.0801, Florida Statutes, to all employees who retire from the employ of the County.
This is administered via a single-employer defined benefit healthcare plan (the “Plan”). In most cases, the retiree
pays 100% of the premium cost for the retiree to participate in the County’s insurance program. As a rule, the cost
of health care increases with age. Thus age-adjusted healthcare premiums for active employees can normally be
expected to be less than age-adjusted premiums for retirees. When a single premium is established for both active
employees and retirees, the retiree ‘benefits’ from an abnormally low premium. Governmental Accounting
Standards Board (GASB) Statement No. 45 describes such an arrangement as an ‘implicit rate subsidy’ and
mandates that any retiree savings be treated as Other Post-Employment Benefits (OPEB) even though the
employer makes no payments directly on behalf of retirees. The Plan provides healthcare benefits including
medical coverage, prescription drug benefits, vision care, dental care and life insurance coverage to both active
and eligible retired employees. Dental and vision care benefits are immaterial and are not believed to result in an
OPEB; therefore, they are not included in the OPEB calculation. The Plan does not issue a separate financial
report.
Currently, there are no direct subsidies provided by any of the County agencies to retired employees. The Sheriff’s
Office offered a subsidy to help pay the premium required to continue coverage under the County’s plan, but
effective November 1, 2010, that was discontinued.
Eligibility for participation in the Plan is limited to full time employees of the County, employees who are active
participants in the Plan at the time of retirement, who retire and are either vested with the Florida Retirement
System (FRS), are vested in the FRS and are age 62, have 30 years of creditable service before age 62, or meet
alternative criteria if disabled or a member of a Special Risk Class. Surviving spouses or dependents of
participating retirees may continue in the Plan if eligibility criteria specific to those classes are met. In an open
session, the County approves the Plan rates for the enrollment period, and may amend the Plan with changes to
the benefits, premiums and/or levels of participant contribution at any time.
At October 1, 2014, the date of the latest actuarial valuation, plan participation consisted of:
Active Plan Participants 1,304
Retirees and Beneficiaries Receiving Benefits 81
Total Membership 1,385
2. FUNDING POLICY
Currently, the County’s OPEB benefits are unfunded. The County has the authority to establish and amend a
funding policy; however, no Trust contributions are legally or contractually required. The County set aside funds
in a budgeted reserve to partially cover the Annual Required Contribution (ARC) for each fiscal year since
September 30, 2008. The balance of those reserves at fiscal year end was $3,000,000.
3. ANNUAL OPEB COST AND NET OPEB OBLIGATION
The County’s annual cost (expense) for Other Post-Employment Benefits (OPEB) is calculated based on the
Annual Required Contribution (ARC), an amount actuarially determined in accordance with the Governmental
Accounting Standards Board (GASB) Statement No. 45. The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
72
NOTE J – POST EMPLOYMENT BENEFITS OTHER THAN PENSION (CONTINUED)
period not to exceed 30 years. The following table shows the components of the County’s annual OPEB cost for
the year, the amount actually contributed, and the changes in the net OPEB obligation.
Annual required contribution $ 1,768,248Interest on net OPEB obligation 312,800Less: Adjustment to annual required contribution (388,571)
Annual OPEB cost (expense) 1,692,477Less: Contributions made (714,917)Increase in net OPEB obligation 977,560Net OPEB obligation-beginning of year 8,937,130Net OPEB obligation-end of year $ 9,914,690
The County’s annual OPEB cost, annual amount contributed (including as a percentage of annual OPEB cost),
and net OPEB obligation for the current and the two preceding years were as follows:
Year EndedSeptember 30
AnnualOPEBCost
EstimatedAmount
Contributed
% of AnnualOPEBCost
Contributed
EstimatedNet OPEBObligation
2014 1,578,073 356,554 22.59% 7,900,1062015 1,637,272 600,248 36.66% 8,937,1302016 1,692,477 714,917 42.24% 9,914,690
4. FUNDED STATUS AND FUNDING PROGRESS
As of the October 1, 2014 actuarial valuation date, the actuarial accrued liability (AAL) was $17.9 million, all of
which was unfunded. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was
$62.4 million and the ratio of the unfunded actuarial accrued liability (UAAL) to covered payroll was 28.7%.
5. ACTUARIAL METHODS AND ASSUMPTIONS
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about
the probability of occurrence of events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the
annual required contributions of the employer are subject to continual revision as actual results are compared with
past expectations and new estimates are made about the future. The schedule of funding progress, presented as
required supplementary information following the notes to the financial statements, presents multi-year trend
information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to
the actuarial accrued liabilities for benefits.
Calculations for financial reporting purposes are based on the benefits provided under terms of the substantive
plan (the plan as understood by the employer and the plan members) in effect at the time of each valuation and
on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits
for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding
limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial
calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
73
NOTE J – POST EMPLOYMENT BENEFITS OTHER THAN PENSION (CONTINUED)
used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities
and the actuarial value of assets.
The actual methods are:Actuarial cost method Entry Age NormalAmortization method Level of percentage of projected payroll, closedAmortization period 23 years on a closed basisAsset valuation method Unfunded, fair value
The actuarial assumptions are:Inflation rate 2.5%Investment rate of return 3.5%Projected annual salaries increase 4.0% - 7.8%Healthcare cost trend rate 7.5% for the initial year decreased to 7.0% in the second
year and varying each subsequent year until reaching 4.54%
NOTE K – ARBITRAGE REBATE LIABILITY
Hernando County calculates and records the estimated liability for arbitrage rebate on its outstanding bonds. The
rebate calculations are done pursuant to Internal Revenue Code Section 148. The amount to be rebated is
calculated as the excess of amounts earned on investments of bond proceeds over amounts that would have been
earned if investments had been invested at a rate equal to the rate of yield on the bond issue, plus any income
attributable to such excess. The regulations provide that the first rebate payment must be made not later than
sixty (60) days after the end of the fifth bond year of the issue; the last installment payment must be made within
sixty (60) days after the day on which the issue’s last obligation is redeemed. As of September 30, 2016 there is
no estimated rebate liability on any of the County’s bond issues.
NOTE L – PROPERTY TAXES
Property tax collections, sales, and liens are governed by Chapter 197 of the Florida Statutes.
The Just/Market Value of all properties in the County is established by the Property Appraiser as of January 1 of
each year for the subsequent fiscal year. Taxable Value is computed after deducting from Assessed Value various
exemptions including governmental, educational, religious, institutional and qualified personal exemptions e.g.;
homestead, widow or widower, blind, disabled, and various veteran’s exemptions.
All property taxes are levied and become due and payable on November 1 of each year, and are delinquent on
April 1 of the following year. Discounts are allowed for early payment of 4%, 3%, 2% and 1% in November through
February, respectively. Delinquent taxes on real property may be paid after the date of delinquency but prior to
the sale of a tax certificate by paying all taxes, costs, advertising charges, and interest of 18% per annum. For all
real property with delinquent taxes, the Tax Collector advertises as required by Statute and sells tax certificates.
All unsold certificates are issued to the County.
Any person owning real property upon which a tax certificate has been sold may redeem the property by paying
the face amount of the tax certificate plus interest and costs associated with the sale of the certificate.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
74
NOTE L – PROPERTY TAXES (CONTINUED)
After taxes have been delinquent (April 1) for two years, the owner of a tax certificate may file an application for
tax deed sale. The County is able to do the same for two years after taxes were due (November 1). All taxes
imposed on any property become a first lien; superior to all other liens, as of January 1, of the year the taxes are
levied.
NOTE M – RISK MANAGEMENT
The County’s risk management activities are recorded in the Internal Service Funds (Risk Management, Workers’
Compensation, County and Sheriff Health Insurance). The purpose of these funds is to administer workers’
compensation, unemployment and disability insurance, property and liability insurance and health insurance.
These funds account for the risk financing activities of the County but do not constitute a transfer of risk from the
County.
Significant losses are covered by commercial insurance for all major programs, except workers’ compensation.
The County and the Sheriff are self-insured for health benefits. For insured programs, there have been no
significant reductions in insurance coverage from the prior year. Settlement amounts have not exceeded insurance
coverage for the current year or prior three years.
The Workers’ Compensation fund is a self-insurance program for workers’ compensation claims on losses up to
$1,100,000 per occurrence and is indemnified against losses in excess of these amounts. The Workers’
Compensation fund has indemnified each fund against any losses in a given year in excess of the fee charged. In
the event actual losses are less than the fee charged, such amounts will be retained in the Workers’ Compensation
fund. Claim settlements and losses are accrued and subsequently paid from the Workers’ Compensation fund.
As of September 30, 2016 claims accrued, including an estimate for claims incurred but not reported, were
$2,730,000. The County records an estimated liability for workers’ compensation. Claims liabilities are based on
estimates of the ultimate cost of reported claims and an estimate for claims incurred but not reported based on
historical experience.
On October 1, 2011, the Sheriff’s Office established a self-insurance program under Florida Statute 112.08 to
reduce employee medical costs. The program is administered by an outside third party, and uses a combination
of self-insurance and specific and aggregate stop-loss coverage to minimize risk exposure. It is accounted for in
an Internal Service Fund. Fund revenues are primarily contributions from other funds, retirees, and employees, for
amounts needed to pay insurance premiums, anticipated self-insured losses, and administrative expenses.
On October 1, 2014, the Board of County Commissioners established a County self-insurance program under
Florida Statute 112.08 to reduce employee medical costs. The program facilitates self-insurance for the Board,
Clerk of Court and Comptroller, Supervisor of Elections, Tax Collector and Property Appraiser. The program is
administered by an outside third party, and uses a combination of self-insurance and aggregate stop-loss coverage
to minimize risk exposure. It is accounted for in an Internal Service Fund. Fund revenues are primarily
contributions from other funds, retirees, and employees for amounts needed to pay insurance premiums,
anticipated self-insured losses, and administrative expenses.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
75
NOTE M – RISK MANAGEMENT (CONTINUED)
CLAIMS LIABILITIES
Workers’Compensation
Sheriff HealthInsurance
County HealthInsurance
Liability balance September 30, 2014 $ 3,770,000 $ 251,998 $ -
Claims incurred 374,958 3,690,198 8,065,946
Claims paid (874,958) (3,622,172) (7,552,223)
Liability balance September 30, 2015 3,270,000 320,024 513,723
Claims incurred 1,150,062 4,744,409 9,415,519
Claims paid (1,690,062) (4,767,370) (9,374,263)
Liability balance September 30, 2016 $ 2,730,000 $ 297,063 $ 554,979
Cash available to pay claims September30, 2016Reported in governmental activities $ 6,109,786 $ 5,322,304 $ 3,469,072
NOTE N – CLOSURE AND POSTCLOSURE CARE COSTS
The County’s active landfills are at the Northwest facility, and include a Class 1 landfill (Cells 1, 2 & 3) and a C&D
landfill. State and federal laws and regulations require the Waste Management Division (the Division) to place final
covers on the active County landfills when they stop accepting waste and to perform certain maintenance and
monitoring functions at the site. Although closure and postclosure care costs will be paid only near or after the
date that the landfill stops accepting waste, the Division reports a portion of these closure and postclosure care
costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. As
of September 30, 2016, the Division has accrued a total of $4,355,651 in liabilities related to estimated closure and
postclosure care costs.
Cells 1 and 2 at the Class 1 landfill were partially closed in 2014 at a cost of $3,158,604. Remaining closure costs
of $5,291,904, as show in the table below, are primarily for Cell 3. Cell 3 is approximately 28% filled at September
30, 2016, and has a remaining design life of approximately 12 years. Postclosure maintenance and monitoring
functions will be required for thirty years after closure. Remaining estimated postclosure costs for the Class 1
landfill (all Cells) are $4,415,324. The class 1 landfill (all Cells) is approximately 59% filled at September 30, 2016.
The County will recognize the remaining costs that have not been accrued (closure costs of $3,790,040 and
postclosure costs of $1,789,358) as the remaining estimated capacity is filled.
The C&D landfill is approximately 91% filled at September 30, 2016, and has a remaining design life of less than
one year. Postclosure maintenance and monitoring functions will be required for five years after closure.
Remaining estimated closure and postclosure costs for the C&D landfill are $157,249 and $93,385, respectively.
The County will recognize the remaining costs that have not been accrued (closure costs of $14,313 and
postclosure costs of $8,500) as the remaining estimated capacity is filled.
All cost estimates are in current dollars. Actual costs may be higher or lower due to inflation, changes in technology
or processes, or changes in regulations.
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
76
NOTE N – CLOSURE AND POSTCLOSURE CARE COSTS (CONTINUED)
Following is a table showing the remaining costs and amount accrued for the combined Northwest facility:
Landfill
EstimatedRemaining
ClosureCosts
PercentAccrued
ClosureAccrued
Liability at9/30/16
EstimatedRemainingPostclosure
CostsPercentAccrued
PostclosureAccrued
Liability at9/30/16
TotalAccrued
Liability at9/30/16
NW Cells 1, 2& 3 $ 5,291,904 28.38% $ 1,501,864 $ 4,415,324 59.47% $ 2,625,966 $ 4,127,830
NW C & D 157,249 90.90% 142,936 93,385 90.90% 84,885 227,821
$ 5,449,153 $ 1,644,800 $ 4,508,709 $ 2,710,851 $ 4,355,651
Amortization expense for 2016 was $76,074 for the Class 1 landfill and ($608,353) for the C&D landfill. This
expense was negative for 2016 primarily because of significantly reduced revised estimates of the remaining
postclosure costs. The annual postclosure cost estimated for the C&D landfill was reduced from $776,840 per
year to $157,249 per year during 2016. The primary factor in the reduction was a redesigned leachate disposal
process.
The Division is required by state and federal laws and regulations to make contributions to a trust to finance closure
and postclosure care. The Division believes it is in compliance with these requirements, and at September 30,
2016, cash and investments of $7,322,818 are held for these purposes. These are reported as restricted assets
on the Statement of Net Position. The Division expects that future inflation costs will be paid from the interest
earnings on these contributions.
NOTE O – DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF
RESOURCES
The deferred outflows of resources and deferred inflows of resources in the Statement of Net Position and
Statement of Governmental Funds Balance Sheet are aggregated. Following are details of the aggregated
amounts.
GovernmentalActivities
Business-TypeActivities
Statement of Net Position
Deferred Outflows of Resources:
Deferred charge on debt refunding $ 884,691 $ 1,594,046
Pensions $ 49,456,824 $ 3,278,589
Deferred Inflows of Resources:
Pensions $ 4,396,732 $ 247,331
Statement of Governmental Funds Balance Sheet
Deferred Inflows of Resources:
Receipt of taxes, applicable to a future period $ 1,569,839 -
Receipt of ambulance fees, applicable to a future period $ 1,147,885 -
Receipt of other items, applicable to a future period $ 290,349 -
HERNANDO COUNTY, FLORIDANOTES TO THE FINANCIAL STATEMENTS
September 30, 2016
77
NOTE P – SEGMENT INFORMATION
The County has four enterprise funds and has elected to separately report each as a major fund in the Basic
Financial Statements. For this reason, segment information is not provided in the notes.
NOTE Q – CONTINGENCIES
1. GENERAL LITIGATION
As part of the ordinary course of operations, the County is exposed to various risks of losses related to torts; theft
of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.
Currently, the County is at varying stages in certain actions against it. Although the outcome of these actions is
not presently determinable, in the opinion of the County Attorney, the resolution of these matters will not have a
material adverse effect on the financial condition of the County.
2. GRANTS AND CONTRACTS
The County participates in various federal and state assisted grant programs that are subject to review and audit
by the grantor agencies. Entitlement to these resources is generally conditional upon compliance with the terms
and conditions of grant agreements and applicable federal and state regulations, including the expenditure of
resources for allowable purposes. Any disallowance resulting from a federal or state audit may become a liability
of the County.
All County agencies and departments are required to comply with various federal and state regulations if such
agency or department is a recipient of a federal or state grant, contract or their sponsored agreement. Certain
agencies and departments may not be in total compliance with these regulations. Failure to comply may result in
questions concerning the allowability of related direct and indirect charges pursuant to such agreements. It is
believed that the ultimate disallowance pertaining to these regulations, if any, will be immaterial to the overall
financial condition of the County.
NOTE R – SUBSEQUENT EVENTS
LINE OF CREDIT
On February 14, 2017, the County closed on the first extension of a $15,000,000 Non-Revolving Line of Credit,
dated October 22, 2015 for the purpose of financing various capital improvement projects within the County. The
Line of Credit agreement has both a tax-exempt and a taxable option, allows for draws with 3, 5, 7, 10 and 15 year
terms, and has no prepayment penalty. On the date of closing, the county made its first draw of $600,000 for the
purpose of financing the purchase of County vehicles. This first draw is to be repaid over a 3-year term from Fleet
Replacement Internal Service Fund.
HERNANDO COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION OTHER POST EMPLOYMENT BENEFIT PLAN
SCHEDULE OF FUNDING PROGRESS September 30, 2016
78
Actuarial Valuation Date (a)
Actuarial Value of Assets
Actuarial
Amortization Method
Actuarial Accrued Liability (AAL)
Unfunded AAL
(UAAL)
Funded Ratio
Covered Payroll
UALL as a Percentage Of Covered
Payroll
10/01/06
- Projected Unit Credit $ 8,813,000 $ 8,813,000
0.00% $ 40,607,170
21.7%
10/01/08
- Projected Unit Credit $ 11,794,000 $ 11,794,000
0.00% $ 58,465,695
20.1%
10/01/10
- Entry Age $ 17,993,474 $ 17,993,474
0.00% $ 61,325,882
29.3%
10/01/12
- Entry Age $ 13,293,147 $ 13,293,147
0.00% $ 62,075,001
21.4%
10/01/14
- Entry Age $ 17,923,915 $ 17,923,915
0.00% $ 62,434,507
28.7%
(a) Tenth year of plan disclosure, no prior data available
HER N A N DO CO U N T Y,FL O R IDAR EQ U IR ED S U P P L EM EN T A R Y IN FO R M A T IO N
S CHEDU L EO FT HECO U N T Y’S P R O P O R T IO N A T ES HAR EO FT HEN ET P EN S IO N L IA BIL IT Y
S eptem ber30,2016
79
FLORIDA RETIREMENT SYSTEM PENSION PLAN
September 30,2015
September 30,2016
County’s Proportion of the FRS NetPension Plan 0.336186138% 0.3748363150%County’s Proportionate Share of the FRSNet
Pension Liability $ 43,422,948 $ 94,646,464
County’s Covered-Employee Payroll $ 68,651,508 $ 67,886,891County’s Proportionate Share of the FRSNet
Pension Liability as a Percentage of itsCovered-Employee Payroll 63.25% 139.42%
FRS Plan Fiduciary Net Position as aPercentage
of the Total Pension Liability 92.00% 84.88%
Note: The amounts shown above as reported on the date indicated have a measurement date three months
prior. Covered-employee payroll is for the year shown. Additional information will be provided annually
until ten years’ data is presented.
HEALTH INSURANCE SUBSIDY PENSION PLAN
September 30,2015
September 30,2016
County’s Proportion of the FRS Net Pension Plan 0.223078724% 0.234274955%
County’s Proportionate Share of the FRS NetPension Liability $ 22,750,521 $ 27,303,775
County’s Covered-Employee Payroll $ 68,632,966 $ 67,886,891
County’s Proportionate Share of the FRS NetPension Liability as a Percentage of itsCovered-Employee Payroll 33.15% 40.22%
FRS Plan Fiduciary Net Position as a Percentageof the Total Pension Liability .50% .97%
Note: The amounts shown above as reported on the date indicated have a measurement date three months
prior. Covered-employee payroll is for the year shown. Additional information will be provided annually
until ten years’ data is presented.
HER N A N DO CO U N T Y,FL O R IDAR EQ U IR ED S U P P L EM EN T A R Y IN FO R M A T O N
S CHEDU L EO FT HECO U N T Y’S CO N T R IBU T IO N SS eptem ber30,2016
80
FLORIDA RETIREMENT SYSTEM PENSION PLAN
2015 2016
Contractually Required Contributions $ 8,393,369 $ 8,953,651FRS Contribution in Relation to the Contractually RequiredContributions (8,393,369) (8,953,651)
FRS Contribution Deficiency (Excess) $ - $ -
County’s Covered-Employee Payroll $ 68,651,508 $ 67,886,891FRS Contributions as a Percentage of Covered-EmployeePayroll 12.23% 13.19%
Note: Additional information will be provided annually until ten years’ data is presented.
HEALTH INSURANCE SUBSIDY PENSION PLAN
2015 2016
Contractually Required Contributions $ 933,323 $ 1,190,541FRS Contribution in Relation to the Contractually RequiredContributions (933,323) (1,190,541)
FRS Contribution Deficiency (Excess) $ - $ -
County’s Covered-Employee Payroll $ 68,632,966 $ 67,885,892FRS Contributions as a Percentage of Covered-EmployeePayroll 1.36% 1.75%
Note: Additional information will be provided annually until ten years’ data is presented.
HER N A N DO CO U N T Y,FL O R IDAN O T ES T O R EQ U IR ED S U P P L EM EN T A R Y IN FO R M A T IO N
S eptem ber30,2016
81
NOTE 1 – SCHEDULES OF NET PENSION LIABILITY AND SCHEDULES OF CONTRIBUTIONS
Changes in Benefit Terms from the year ended June 30, 2015 to June 30, 2016:
■ FRS―No significant changes.
■ HIS―No significant changes.
Changes in Assumptions from the year ended June 30, 2015 to June 30, 2016:
FRS: No significant changes. The inflation rate assumption remained at 2.60% and the overall payroll
growth rate assumption remained at 3.25%. The long-term expected rate of return was reduced to 7.60%.
HIS: The municipal bond rate used to determine total pension liability decreased from 3.80% to 2.85%.
Combining and Individual Fund Statements and Schedules
Nonmajor Governmental Funds
Special Revenue Funds
Stormwater ManagementTo account for the proceeds of ad valorem taxes and other revenues for the purpose of funding
Stormwater Management.
Sensitive LandsTo account for the proceeds of ad valorem taxes and other revenues for the purpose of purchasing
environmentally sensitive lands.
State Housing Initiative PartnershipTo account for the grant proceeds and associated expenditures of a low income housing assistance
program.
Court-Related FundsTo account for the proceeds of revenues received for the purpose of funding court-related technology,
court improvements, court innovations, juvenile alternative programs, law library, legal aid, youth court andtreatment of alcohol and other drug abuse.
Municipal Service Benefit Units Special Revenue FundTo account for the proceeds of assessments levied for the purpose of funding road improvements,
street lighting, fire hydrant maintenance, and other services within the various Municipal Service Benefit Unitsof the County.
Hernando County Fire Rescue-RescueTo account for the revenue and expenditures related to providing ambulance and rescue services
within this district.
Miscellaneous Special Revenue FundsTo account for the revenues from specific taxes or other earmarked revenue sources which by law are
designated to finance particular functions or activities of government and which, therefore, cannot be divertedto other uses. Included in this fund are the following: Hernando/Citrus MPO, Florida Boating ImprovementProgram, Health Department, State and Local Mosquito Control, Law Enforcement Trust Fund, CrimePrevention, Tourist Development Tax, Affordable Housing, Landscape Enhancement, Industrial/EconomicIncentives, Library Estate and Dori Slosberg Driver Education Safety.
Clerk of Court & Comptroller Special Revenue FundsTo account for the funds received in the Clerk of Circuit Court’s Records Modernization Fund and
Fines and Forfeitures Fund.
Property Appraiser Special Revenue FundsTo account for the funds received in the Property Appraiser’s Graphic Information Systems Fund,
Addressing Fund, Addressing Fees Fund, GIS Business Units Fund and the County Fees and CommissionsFund.
Sheriff Special Revenue FundsTo account for the funds received in the Sheriff’s Law Enforcement Education Fund, Child Saver
Program Fund, Inmate Welfare Fund, Grants and Contributions Fund, Federal Forfeitures Fund, Sheriff E911Fund and 800MHz Fund.
Debt Service Funds
Capital Improvement and Refunding Revenue Bonds 2004To account for the debt service requirements of the Capital Improvement and Refunding Revenue
Bonds, Series 2004.
Non-Ad Valorem Refunding Revenue Bonds 2010To account for the debt service requirements of the Non-Ad Valorem Refunding Revenue Bonds,
Series 2010.
Gas Tax Revenue Refunding Bonds 2002To account for the debt service requirements of the Gas Tax Revenue Refunding Bonds, Series 2002.
Non-Ad Valorem Refunding Revenue Note 2012To account for the debt service requirements of the Non-Ad Valorem Refunding Revenue Note, Series
2012.
Capital Project Funds
Capital Improvement ProgramTo account for the capital outlay expenditures of the Board of County Commissioners General Fund.
State
Housing
Stormwater Sensitive Initiative
Management Lands Partnership
ASSETS
Cash and Cash Equivalents $ - $ - $ -
Pooled Cash and Investments 5,375,005 5,861,576 423,071
Accounts Receivable (net) - - 53,406
Due from Other Funds 12,681 15 -
Due from Other Governments 1,688 - -
Inventories - - -
Prepaid Items - - -
Total Assets $ 5,389,374 $ 5,861,591 $ 476,477
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
Liabilities
Accounts Payable $ 22,814 $ 27,413 $ 22,634
Retainage Payable - - -
Accrued Liabilities 3,391 3,300 -
Due to Other Funds - - -
Due to Other Governments - - -
Unearned Revenue - - -
Deposits - 500 -
Advances from Other Funds - - -
Total Liabilities 26,205 31,213 22,634
Deferred Inflows of Resources
Unavailable Revenue - - -
Fund Balances
Nonspendable:
Inventories - - -
Prepaid Items - - -
Restricted for:Grant Funded Programs - - 453,843
Court Programs - - -
Special Assessment Projects - - -
Environment Conservation 5,363,169 5,830,378 -
Bond covenants or debt service - - -
Public Safety - - -
Capital Projects - - -
Other Purposes - - -
Committed to:
Other Purposes - - -
Assigned to:
Economic Development - - -
Capital Projects - - -
Other - - -
Unassigned - - -
Total Fund Balances 5,363,169 5,830,378 453,843
Total Liabilities, Deferred Inflows of Resources
and Fund Balances $ 5,389,374 $ 5,861,591 $ 476,477
See accompanying independent auditors' report.
Special Revenue Funds
September 30, 2016
HERNANDO COUNTY, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
82
Hernando Miscellaneous
Court- Municipal County Fire Special
Related Service Benefit Rescue - Revenue
Funds Units Rescue Funds
$ - $ 250 $ - $ 400
5,365,864 3,650,370 4,259,381 4,857,873
87,263 - 2,119,733 68,076
- 25,627 73,753 998
4,678 - 4,895 104,217
- - 1,800 -
- - 9,516 -
$ 5,457,805 $ 3,676,247 $ 6,469,078 $ 5,031,564
$ 71,853 $ 239,032 $ 58,463 $ 73,733
- 9,931 - -
7,214 - 136,462 18,333
- 341,644 - -
- - - -
- - 60,000 4,015
- - - -
- 82,000 - 450,000
79,067 672,607 254,925 546,081
- - 1,147,885 53,045
- - 1,800 -
- - 9,516 -
- - - 47,016
5,378,738 - - -
- 321,087 - -
- - - -
- 1,365,250 - -
- - 5,054,952 -
- 1,317,303 - -
- - - 2,116,562
- - - 314,249
- - - 1,843,905
- - - -
- - - 110,706
- - - -
5,378,738 3,003,640 5,066,268 4,432,438
$ 5,457,805 $ 3,676,247 $ 6,469,078 $ 5,031,564
Continued
Special Revenue Funds
83
Clerk of Court Property
and Comptroller Appraiser Sheriff
Special Revenue Special Revenue Special Revenue
Funds Funds Funds
ASSETS
Cash and Cash Equivalents $ - $ 987,516 $ 3,905,116
Pooled Cash and Investments 2,104,498 - -
Accounts Receivable (net) - - 31,146
Due from Other Funds - - -
Due from Other Governments 68,264 - 414,643
Inventories - - -
Prepaid Items 36,371 - -
Total Assets $ 2,209,133 $ 987,516 $ 4,350,905
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
Liabilities
Accounts Payable $ 9,466 $ 394 $ 21,969
Retainage Payable - - -
Accrued Liabilities 102,117 - 20,289
Due to Other Funds 135,217 53,899 -
Due to Other Governments 490,299 248 -
Unearned Revenue - - -
Deposits 157,470 - 140
Advances from Other Funds - - -
Total Liabilities 894,569 54,541 42,398
Deferred Inflows of Resources
Unavailable Revenue - - 162,475
Fund Balances
Nonspendable:
Inventories - - -
Prepaid Items 36,371 - -
Restricted for:Grant Funded Programs - - -
Court Programs - - -
Special Assessment Projects - - -
Environment Conservation - - -
Bond covenants or debt service - - -
Public Safety - - 4,146,032
Capital Projects - - -
Other Purposes 1,278,193 - -
Committed to:
Other Purposes - 932,975 -
Assigned to:
Economic Development - - -
Capital Projects - - -
Other - - -
Unassigned - - -
Total Fund Balances 1,314,564 932,975 4,146,032
Total Liabilities, Deferred Inflows of Resources
and Fund Balances $ 2,209,133 $ 987,516 $ 4,350,905
Special Revenue Funds
September 30, 2016
HERNANDO COUNTY, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
84
Non-Ad Valorem
Refunding
Revenue
Bonds 2010
$ 4,893,282 $ - $ - $ -
31,897,638 7,319 8,572 5,763
2,359,624 - - -
113,074 - - -
598,385 - - -
1,800 - - -
45,887 - - -
$ 39,909,690 $ 7,319 $ 8,572 $ 5,763
$ 547,771 $ - $ - $ -
9,931 - - -
291,106 - - -
530,760 - - -
490,547 - - -
64,015 - - -
158,110 - - -
532,000 - - -
2,624,240 - - -
1,363,405 - - -
1,800 - - -
45,887 - - -
500,859 - - -
5,378,738 - - -
321,087 - - -
11,193,547 - - -
1,365,250 7,319 8,572 5,763
9,200,984 - - -
1,317,303 - - -
3,394,755 - - -
1,247,224 - - -
1,843,905 - - -
- - - -
110,706 - - -
- - - -
- - -
35,922,045 7,319 8,572 5,763
$ 39,909,690 $ 7,319 $ 8,572 $ 5,763
Continued
Refunding Revenue
Total
Special Revenue
Improvement
and Refunding Non-Ad Valorem
Revenue
Capital
Debt Service Funds
Funds Bonds 2004 Note 2012
85
ASSETS
Cash and Cash Equivalents $ - $ - $ 4,893,282
Pooled Cash and Investments 21,654 864,411 32,783,703
Accounts Receivable (net) - - 2,359,624
Due from Other Funds - - 113,074
Due from Other Governments - - 598,385
Inventories - - 1,800
Prepaid Items - - 45,887
Total Assets $ 21,654 $ 864,411 $ 40,795,755
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
Liabilities
Accounts Payable $ - $ 15,243 $ 563,014
Retainage Payable - - 9,931
Accrued Liabilities - - 291,106
Due to Other Funds - - 530,760
Due to Other Governments - - 490,547
Unearned Revenue - - 64,015
Deposits - - 158,110
Advances from Other Funds - - 532,000
Total Liabilities - 15,243 2,639,483
Deferred Inflows of Resources
Unavailable Revenue - - 1,363,405
Fund Balances
Nonspendable:
Inventories - - 1,800
Prepaid Items - - 45,887
Restricted for:Grant Funded Programs - - 500,859
Court Programs - - 5,378,738
Special Assessment Projects - - 321,087
Environment Conservation - - 11,193,547
Bond covenants or debt service 21,654 - 1,386,904
Public Safety - - 9,200,984
Capital Projects - - 1,317,303
Other Purposes - - 3,394,755
Committed to:
Other Purposes - - 1,247,224
Assigned to:
Economic Development - - 1,843,905
Capital Projects - 849,168 849,168
Other - - 110,706
Unassigned - - -
Total Fund Balances 21,654 849,168 36,792,867
Total Liabilities, Deferred Inflows of Resources
and Fund Balances $ 21,654 $ 864,411 $ 40,795,755
Improvement
Capital
Debt Service
Total
HERNANDO COUNTY, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
September 30, 2016
Capital Project Fund
ProgramFunds
Total
Nonmajor
Governmental
Funds
86
State
Housing
Stormwater Sensitive Initiative
Management Lands Partnership
Revenues
Taxes $ 814,575 $ 1,196 $ -
Licenses and Permits - - -
Intergovernmental 6,196 - 878,463
Charges for Services - - -
Fines and Forfeitures - - -
Special Assessments - - -
Interest 61,838 67,104 9,528
Miscellaneous 44,047 1,230 293,321
Total Revenues 926,656 69,530 1,181,312
Expenditures
Current
General Government - - -
Public Safety - - -
Physical Environment 457,187 364,946 -
Transportation - - -
Economic Environment - - 1,274,443
Human Services - - -
Culture and Recreation - - -
Court Operations - - -
Debt Service
Principal - - -
Interest and Fiscal Charges - - -
Capital Outlay 103,921 - -
Total Expenditures 561,108 364,946 1,274,443
Excess of Revenues Over (Under) Expenditures 365,548 (295,416) (93,131)
Other Financing Sources (Uses)
Transfers In 12,681 430 -
Transfers Out - - -
Additions to Long-Term Debt - - -
Total Other Financing Sources (Uses) 12,681 430 -
Net Change in Fund Balances 378,229 (294,986) (93,131)
Fund Balances at Beginning of Year 4,984,940 6,125,364 546,974
Fund Balances at End of Year $ 5,363,169 $ 5,830,378 $ 453,843
See accompanying independent auditors' report.
For the Fiscal Year Ended September 30, 2016
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
87
Hernando
Court- Municipal County Fire Miscellaneous
Related Service Benefit Rescue - Special Revenue
Funds Units Rescue Funds
$ - $ - $ 4,807,423 $ 1,636,804
- - - -
14,288 - 19,260 717,358
1,177,476 - 7,307,447 30,520
- - - 194,506
- 2,142,799 - -
59,236 32,400 56,343 56,622
65 51,182 59,132 183,669
-
1,251,065 2,226,381 12,249,605 2,819,479
- - - 613,453
- 230,515 10,122,913 160,869
- 2,737 - 5,009
- 1,155,472 - 16,349
- - - 1,288,001
- - - 1,472,558
- - - 106,211
942,153 - - -
- 315,232 106,991 -
- 56,736 10,438 -
63,662 526,169 37,249 155,234
1,005,815 2,286,861 10,277,591 3,817,684
245,250 (60,480) 1,972,014 (998,205)
162,734 2,340,065 189,042 592,696
- (1,209,978) (440,500) -
- 756,845 - -
162,734 1,886,932 (251,458) 592,696
407,984 1,826,452 1,720,556 (405,509)
4,970,754 1,177,188 3,345,712 4,837,947
-$ 5,378,738 $ 3,003,640 $ 5,066,268 $ 4,432,438
Continued
Special Revenue Funds
88
Clerk of Court Property
and Comptroller Appraiser Sheriff
Special Revenue Special Revenue Special Revenue
Funds Funds Funds
Revenues
Taxes $ - $ - $ -
Licenses and Permits - - -
Intergovernmental 427,529 865,798 162,889
Charges for Services 3,382,746 74,077 2,612,222
Fines and Forfeitures 987,556 - 284,663
Special Assessments - - -
Interest 20,283 819 4,760
Miscellaneous - - 108,892
Total Revenues 4,818,114 940,694 3,173,426
Expenditures
Current
General Government 56,591 765,173 -
Public Safety - - 1,664,766
Physical Environment - - -
Transportation - - -
Economic Environment - - -
Human Services - - -
Culture and Recreation - - -
Court Operations 4,418,656 - -
Debt Service
Principal - - -
Interest and Fiscal Charges - - -
Capital Outlay 19,008 13,155 36,418
Total Expenditures 4,494,255 778,328 1,701,184
Excess of Revenues Over (Under) Expenditures 323,859 162,366 1,472,242
Other Financing Sources (Uses)
Transfers In - - -
Transfers Out (135,217) (53,899) -
Additions to Long-Term Debt - - -
Total Other Financing Sources (Uses) (135,217) (53,899) -
Net Change in Fund Balances 188,642 108,467 1,472,242
Fund Balances at Beginning of Year 1,125,922 824,508 2,673,790
Fund Balances at End of Year $ 1,314,564 $ 932,975 $ 4,146,032
Special Revenue Funds
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Fiscal Year Ended September 30, 2016
89
Capital
Improvement Non-Ad Valorem
and Refunding Refunding
Revenue Revenue
Bonds 2004 Bonds 2010
$ 7,259,998 $ - $ - $ - $ -
- - - - -
3,091,781 - - - -
14,584,488 - - - -
1,466,725 - - - -
2,142,799 - - - -
368,933 89 104 684 151
741,538 - - - -
29,656,262 89 104 684 151
1,435,217 6 7 5 9
12,179,063 - - - -
829,879 - - - -
1,171,821 - - - -
2,562,444 - - - -
1,472,558 - - - -
106,211 - - - -
5,360,809 - - - -
422,223 905,000 325,000 - 1,610,000
67,174 49,310 116,894 - 603,301
954,816 - - - -
26,562,215 954,316 441,901 5 2,213,310
3,094,047 (954,227) (441,797) 679 (2,213,159)
3,297,648 954,110 441,709 - 2,214,301
(1,839,594) - - (61,647) -
756,845 - - - -
2,214,899 954,110 441,709 (61,647) 2,214,301
5,308,946 (117) (88) (60,968) 1,142
30,613,099 7,436 8,660 60,968 4,621
$ 35,922,045 $ 7,319 $ 8,572 $ - $ 5,763
Continued
Special Revenue
Total
Note 2012
Debt Service Funds
Revenue Non-Ad Valorem
Gas Tax
Funds Bonds 2002
Refunding RevenueRefunding
90
Revenues
Taxes $ - $ - $ 7,259,998
Licenses and Permits - - -
Intergovernmental - - 3,091,781
Charges for Services - - 14,584,488
Fines and Forfeitures - - 1,466,725
Special Assessments - - 2,142,799
Interest 1,028 10,257 380,218
Miscellaneous - - 741,538
Total Revenues 1,028 10,257 29,667,547
Expenditures
Current
General Government 27 36,424 1,471,668
Public Safety - 27,523 12,206,586
Physical Environment - - 829,879
Transportation - - 1,171,821
Economic Environment - - 2,562,444
Human Services - - 1,472,558
Culture and Recreation - - 106,211
Court Operations - - 5,360,809
Debt Service
Principal 2,840,000 - 3,262,223
Interest and Fiscal Charges 769,505 - 836,679
Capital Outlay - 429,812 1,384,628
Total Expenditures 3,609,532 493,759 30,665,506
Excess of Revenues Over (Under) Expenditures (3,608,504) (483,502) (997,959)
Other Financing Sources (Uses)
Transfers In 3,610,120 - 6,907,768
Transfers Out (61,647) - (1,901,241)
Additions to Long-Term Debt - - 756,845
Total Other Financing Sources (Uses) 3,548,473 - 5,763,372
Net Change in Fund Balances (60,031) (483,502) 4,765,413
Fund Balances at Beginning of Year 81,685 1,332,670 32,027,454
Fund Balances at End of Year $ 21,654 $ 849,168 $ 36,792,867
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
Nonmajor
Total
For the Fiscal Year Ended September 30, 2016
Debt Service Funds Capital Project Fund
Total Capital
GovernmentalImprovementDebt Service
Funds FundsProgram
91
HERNANDO COUNTY, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
IMPACT FEES CAPITAL PROJECT FUND
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Impact Fees $ 709,443 $ 1,010,633 1,299,423 $ 288,790
Interest 20,052 28,552 80,534 51,982
Total Revenues 729,495 1,039,185 1,379,957 340,772
Expenditures
Current
Public Safety 63,000 63,000 5,135 57,865
Capital Outlay 1,616,205 2,686,679 1,269,018 1,417,661
Total Expenditures 1,679,205 2,749,679 1,274,153 1,475,526
Excess of Revenues Over Expenditures (949,710) (1,710,494) 105,804 1,816,298
Other Financing Sources (Uses)
Transfers Out (486,515) (486,515) (486,512) 3
Reserve for Contingencies (8,666,434) (7,860,906) - 7,860,906
Total Other Financing Sources (Uses) (9,152,949) (8,347,421) (486,512) 7,860,909
Net Change in Fund Balance (10,102,659) (10,057,915) (380,708) 9,677,207
Fund Balance at Beginning of Year 10,102,659 10,057,915 8,262,108 (1,795,807)
Fund Balance at End of Year $ - $ - $ 7,881,400 $ 7,881,400
See accompanying independent auditors' report.
Budgeted Amounts
92
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
STORMWATER MANAGEMENT
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes $ 798,551 $ 814,266 $ 814,575 $ 309
Intergovernmental 490,000 15,000 6,196 (8,804)
Interest 12,000 41,640 61,838 20,198
Miscellaneous 6,500 56,500 44,047 (12,453)
Total Revenues 1,307,051 927,406 926,656 (750)
Expenditures
Current
Physical Environment 1,026,289 748,579 457,187 291,392
Capital Outlay 1,075,000 1,574,113 103,921 1,470,192
Total Expenditures 2,101,289 2,322,692 561,108 1,761,584
Excess of Revenues Over (Under) Expenditures (794,238) (1,395,286) 365,548 1,760,834
Other Financing Sources (Uses)
Transfers In 25,000 25,000 12,681 (12,319)
Reserve for Contingencies (3,833,014) (3,599,654) - 3,599,654
Total Other Financing Sources (Uses) (3,808,014) (3,574,654) 12,681 3,587,335
Net Change in Fund Balance (4,602,252) (4,969,940) 378,229 5,348,169
Fund Balance at Beginning of Year 4,602,252 4,969,940 4,984,940 15,000
Fund Balance at End of Year $ - $ - $ 5,363,169 $ 5,363,169
See accompanying independent auditors' report.
Budgeted Amounts
93
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
SENSITIVE LANDS
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes $ 1,000 $ 1,000 $ 1,196 $ 196
Interest 45,000 45,000 67,104 22,104
Miscellaneous 5,160 5,160 1,230 (3,930)
Total Revenues 51,160 51,160 69,530 18,370
Expenditures
Current
Physical Environment 528,150 529,782 364,946 164,836
Total Expenditures 528,150 529,782 364,946 164,836
Excess of Revenues Over (Under) Expenditures (476,990) (478,622) (295,416) 183,206
Other Financing Sources (Uses)
Transfers In - 415 430 15
Reserve for Contingencies (5,521,993) (5,647,157) - 5,647,157
Total Other Financing Sources (Uses) (5,521,993) (5,646,742) 430 5,647,172
Net Change in Fund Balance (5,998,983) (6,125,364) (294,986) 5,830,378
Fund Balance at Beginning of Year 5,998,983 6,125,364 6,125,364 -
Fund Balance at End of Year $ - $ - $ 5,830,378 $ 5,830,378
See accompanying independent auditors' report.
Budgeted Amounts
94
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
STATE HOUSING INITIATIVE PARTNERSHIP
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Intergovernmental $ 864,090 $ 864,090 $ 878,463 $ 14,373
Interest 11,500 11,500 9,528 (1,972)
Miscellaneous 115,000 115,000 293,321 178,321
Total Revenues 990,590 990,590 1,181,312 190,722
Expenditures
Current
Economic Environment 1,494,603 1,494,603 1,274,443 220,160
Total Expenditures 1,494,603 1,494,603 1,274,443 220,160
Excess of Revenues Over (Under) Expenditures (504,013) (504,013) (93,131) 410,882
Other Financing Sources (Uses)
Reserve for Contingencies - (42,960) - 42,960
Total Other Financing Sources (Uses) - (42,960) - 42,960
Net Change in Fund Balance (504,013) (546,973) (93,131) 453,842
Fund Balance at Beginning of Year 504,013 546,973 546,974 1
Fund Balance at End of Year $ - $ - $ 453,843 $ 453,843
See accompanying independent auditors' report.
Budgeted Amounts
95
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Intergovernmental $ - $ 14,288 $ 14,288 $ -
Charges for Services 1,293,455 1,293,455 1,177,476 (115,979)
Interest 22,630 22,630 59,236 36,606
Miscellaneous - - 65 65
Total Revenues 1,316,085 1,330,373 1,251,065 (79,308)
Expenditures
Current
Court Operations 966,545 1,003,193 942,153 61,040
Capital Outlay 115,555 101,555 63,662 37,893
Total Expenditures 1,082,100 1,104,748 1,005,815 98,933
Excess of Revenues Over (Under) Expenditures 233,985 225,625 245,250 19,625
Other Financing Sources (Uses)
Transfers In 162,734 169,260 162,734 (6,526)
Reserve for Contingencies (5,479,503) (5,394,776) - 5,394,776
Total Other Financing Sources (Uses) (5,316,769) (5,225,516) 162,734 5,388,250
Net Change in Fund Balance (5,082,784) (4,999,891) 407,984 5,407,875
Fund Balance at Beginning of Year 5,082,784 4,999,891 4,970,754 (29,137)
Fund Balance at End of Year $ - $ - $ 5,378,738 $ 5,378,738
See accompanying independent auditors' report.
Budgeted Amounts
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
COURT-RELATED FUNDS
For the Fiscal Year Ended September 30, 2016
96
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
MUNICIPAL SERVICE BENEFIT UNITS
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Special Assessments $ 2,155,723 $ 2,143,606 $ 2,142,799 $ (807)
Interest 10,585 18,168 32,400 14,232
Miscellaneous 12,070 46,655 51,182 4,527
Total Revenues 2,178,378 2,208,429 2,226,381 17,952
Expenditures
Current
Public Safety 231,140 231,140 230,515 625
Physical Environment 2,381 2,381 2,737 (356)
Transportation 1,273,660 1,287,058 1,155,472 131,586
Debt Service
Principal 658,251 383,763 315,232 68,531
Interest and Fiscal Charges 131,210 59,086 56,736 2,350
Capital Outlay 261,000 2,365,708 526,169 1,839,539
Total Expenditures 2,557,642 4,329,136 2,286,861 2,042,275
Excess of Revenues Over (Under) Expenditures (379,264) (2,120,707) (60,480) 2,060,227
Other Financing Sources (Uses)
Transfers In - 2,314,438 2,340,065 25,627
Transfers Out (2,000,000) (1,209,981) (1,209,978) 3
Additions to Long-Term Debt 2,250,000 756,845 756,845 -
Reserve for Contingencies (935,108) (1,329,664) - 1,329,664
Total Other Financing Sources (Uses) (685,108) 531,638 1,886,932 1,355,294
Net Change in Fund Balance (1,064,372) (1,589,069) 1,826,452 3,415,521
Fund Balance at Beginning of Year 1,064,372 1,589,069 1,177,188 (411,881)
Fund Balance at End of Year $ - $ - $ 3,003,640 $ 3,003,640
See accompanying independent auditors' report.
Budgeted Amounts
97
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
HERNANDO COUNTY FIRE RESCUE - RESCUE
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes $ 4,723,166 $ 4,723,166 $ 4,807,423 $ 84,257
Intergovernmental 18,235 78,235 19,260 (58,975)
Charges for Services 6,957,406 6,957,406 7,307,447 350,041
Interest 61,452 18,200 56,343 38,143
Miscellaneous - 43,252 59,132 15,880
Total Revenues 11,760,259 11,820,259 12,249,605 429,346
Expenditures
Current
Public Safety 10,043,149 10,201,501 10,122,913 78,588
Debt Service
Principal - 106,991 106,991 -
Interest and Fiscal Charges 12,085 10,438 10,438 -
Capital Outlay 113,242 123,945 37,249 86,696
Total Expenditures 10,168,476 10,442,875 10,277,591 165,284
Excess of Revenues Over (Under) Expenditures 1,591,783 1,377,384 1,972,014 594,630
Other Financing Sources (Uses)
Transfers In 99,378 138,574 189,042 50,468
Transfers Out (436,500) (440,500) (440,500) -
Reserve for Contingencies (1,946,699) (4,421,169) - 4,421,169
Total Other Financing Sources (Uses) (2,283,821) (4,723,095) (251,458) 4,471,637
Net Change in Fund Balance (692,038) (3,345,711) 1,720,556 5,066,267
Fund Balance at Beginning of Year 692,038 3,345,711 3,345,712 1
Fund Balance at End of Year $ - $ - $ 5,066,268 $ 5,066,268
See accompanying independent auditors' report.
Budgeted Amounts
98
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
MISCELLANEOUS SPECIAL REVENUE FUNDS
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes $ 1,574,951 $ 1,575,651 $ 1,636,804 $ 61,153
Intergovernmental 1,117,876 1,126,848 717,358 (409,490)
Charges for Services - 22,000 30,520 8,520
Fines and Forfeitures 159,000 159,000 194,506 35,506
Interest 21,375 27,089 56,622 29,533
Miscellaneous 76,300 226,957 183,669 (43,288)
Total Revenues 2,949,502 3,137,545 2,819,479 (318,066)
Expenditures
Current
General Government 1,030,924 1,033,624 613,453 420,171
Public Safety 263,062 263,062 160,869 102,193
Physical Environment 101,900 101,900 5,009 96,891
Transportation 22,496 29,530 16,349 13,181
Economic Environment 1,923,126 2,180,987 1,288,001 892,986
Human Services 1,582,868 1,687,676 1,472,558 215,118
Capital Outlay 96,200 286,536 155,234 131,302
Total Expenditures 5,036,576 5,860,102 3,817,684 2,042,418
Excess of Revenues Over (Under) Expenditures (2,087,074) (2,722,557) (998,205) 1,724,352
Other Financing Sources (Uses)
Transfers In 495,771 602,939 592,696 (10,243)
Transfers Out (28,000) - - -
Additions to Long-Term Debt - 55,000 - (55,000)
Reserve for Contingencies (2,997,158) (2,780,822) - 2,780,822
Total Other Financing Sources (Uses) (2,529,387) (2,122,883) 592,696 2,715,579
Net Change in Fund Balance (4,616,461) (4,845,440) (405,509) 4,439,931
Fund Balance at Beginning of Year 4,616,461 4,845,440 4,837,947 (7,493)
Fund Balance at End of Year $ - $ - $ 4,432,438 $ 4,432,438
See accompanying independent auditors' report.
Budgeted Amounts
99
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CLERK OF COURT AND COMPTROLLER SPECIAL REVENUE FUNDS
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Intergovernmental $ 175,000 $ 175,000 $ 427,529 $ 252,529
Charges for Services 3,190,500 3,190,500 3,382,746 192,246
Fines and Forfeitures 1,050,000 1,050,000 987,556 (62,444)
Interest 5,280 5,280 20,283 15,003
Total Revenues 4,420,780 4,420,780 4,818,114 397,334
Expenditures
Current
General Government 129,800 129,800 56,591 73,209
Court Operations 4,509,380 4,509,380 4,418,656 90,724
Capital Outlay 140,000 140,000 19,008 120,992
Total Expenditures 4,779,180 4,779,180 4,494,255 284,925
Excess of Revenues Over (Under) Expenditures (358,400) (358,400) 323,859 682,259
Other Financing Sources (Uses)
Transfers Out - - (135,217) (135,217)
Reserve for Contingencies (660,600) (660,600) - 660,600
Total Other Financing Sources (Uses) (660,600) (660,600) (135,217) 525,383
Net Change in Fund Balance (1,019,000) (1,019,000) 188,642 1,207,642
Fund Balance at Beginning of Year 1,019,000 1,019,000 1,125,922 106,922
Fund Balance at End of Year $ - $ - $ 1,314,564 $ 1,314,564
See accompanying independent auditors' report.
Budgeted Amounts
100
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
PROPERTY APPRAISER SPECIAL REVENUE FUNDS
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Intergovernmental $ 865,798 $ 865,798 $ 865,798 $ -
Charges for Services - - 74,077 74,077
Interest - - 819 819
Total Revenues 865,798 865,798 940,694 74,896
Expenditures
Current
General Government 837,298 854,551 765,173 89,378
Capital Outlay 28,500 11,247 13,155 (1,908)
Total Expenditures 865,798 865,798 778,328 87,470
Excess of Revenues Over Expenditures - - 162,366 162,366
Other Financing Sources (Uses)
Transfers Out - - (53,899) (53,899)
Total Other Financing Sources (Uses) - - (53,899) (53,899)
Net Change in Fund Balance - - 108,467 108,467
Fund Balance at Beginning of Year - - 824,508 824,508
Fund Balance at End of Year $ - $ - $ 932,975 $ 932,975
See accompanying independent auditors' report.
Budgeted Amounts
101
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
SHERIFF SPECIAL REVENUE FUNDS
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Intergovernmental $ 136,873 $ 241,508 $ 162,889 $ (78,619)
Charges for Services 1,170,000 2,570,000 2,612,222 42,222
Fines and Forfeitures 253,000 253,000 284,663 31,663
Interest 400 400 4,760 4,360
Miscellaneous 93,287 111,190 108,892 (2,298)
Total Revenues 1,653,560 3,176,098 3,173,426 (2,672)
Expenditures
Current
Public Safety 1,932,700 2,076,238 1,664,766 411,472
Capital Outlay 659,935 659,935 36,418 623,517
Total Expenditures 2,592,635 2,736,173 1,701,184 1,034,989
Excess of Revenues Over (Under) Expenditures (939,075) 439,925 1,472,242 1,032,317
Other Financing Sources (Uses)
Reserve for Contingencies (1,730,400) (3,109,400) - 3,109,400
Total Other Financing Sources (Uses) (1,730,400) (3,109,400) - 3,109,400
Net Change in Fund Balance (2,669,475) (2,669,475) 1,472,242 4,141,717
Fund Balance at Beginning of Year 2,669,475 2,669,475 2,673,790 4,315
Fund Balance at End of Year $ - $ - $ 4,146,032 $ 4,146,032
See accompanying independent auditors' report.
Budgeted Amounts
102
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL IMPROVEMENT AND REFUNDING REVENUE BONDS 2004
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Interest $ 24 $ 24 $ 89 $ 65
Total Revenues 24 24 89 65
Expenditures
Current
General Government 16 7,461 6 7,455
Debt Service
Principal 905,000 905,000 905,000 -
Interest and Fiscal Charges 49,110 49,110 49,310 (200)
Total Expenditures 954,126 961,571 954,316 7,255
Excess of Revenues Over (Under) Expenditures (954,102) (961,547) (954,227) 7,320
Other Financing Sources (Uses)
Transfers In 954,111 954,111 954,110 (1)
Total Other Financing Sources (Uses) 954,111 954,111 954,110 (1)
Net Change in Fund Balance 9 (7,436) (117) 7,319
Fund Balance at Beginning of Year (9) 7,436 7,436 -
Fund Balance at End of Year $ - $ - $ 7,319 $ 7,319
See accompanying independent auditors' report.
Budgeted Amounts
103
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
NON-AD VALOREM REFUNDING REVENUE BONDS 2010
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Interest $ 24 $ 24 $ 104 $ 80
Total Revenues 24 24 104 80
Expenditures
Current
General Government 16 8,683 7 8,676
Debt Service
Principal 325,000 325,000 325,000 -
Interest and Fiscal Charges 116,710 116,710 116,894 (184)
Total Expenditures 441,726 450,393 441,901 8,492
Excess of Revenues Over (Under) Expenditures (441,702) (450,369) (441,797) 8,572
Other Financing Sources (Uses)
Transfers In 441,710 441,710 441,709 (1)
Total Other Financing Sources (Uses) 441,710 441,710 441,709 (1)
Net Change in Fund Balance 8 (8,659) (88) 8,571
Fund Balance at Beginning of Year (8) 8,659 8,660 1
Fund Balance at End of Year $ - $ - $ 8,572 $ 8,572
See accompanying independent auditors' report.
Budgeted Amounts
104
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GAS TAX REVENUE REFUNDING BONDS 2002
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Interest $ - $ - $ 684 $ 684
Total Revenues - - 684 684
Expenditures
Current
General Government - - 5 (5)
Total Expenditures - - 5 (5)
Excess of Revenues Over (Under) Expenditures - - 679 679
Other Financing Sources (Uses)
Transfers Out - - (61,647) (61,647)
Total Other Financing Sources (Uses) - - (61,647) (61,647)
Net Change in Fund Balance - - (60,968) (60,968)
Fund Balance at Beginning of Year - - 60,968 60,968
Fund Balance at End of Year $ - $ - $ - $ -
See accompanying independent auditors' report.
Budgeted Amounts
105
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
NON-AD VALOREM REFUNDING REVENUE NOTE 2012
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Interest $ 12 $ 12 $ 151 $ 139
Total Revenues 12 12 151 139
Expenditures
Current
General Government 21 4,636 9 4,627
Debt Service
Principal 1,610,000 1,610,000 1,610,000 -
Interest and Fiscal Charges 604,301 604,301 603,301 1,000
Total Expenditures 2,214,322 2,218,937 2,213,310 5,627
Excess of Revenues Over (Under) Expenditures (2,214,310) (2,218,925) (2,213,159) 5,766
Other Financing Sources (Uses)
Transfers In 2,214,305 2,214,305 2,214,301 (4)
Total Other Financing Sources (Uses) 2,214,305 2,214,305 2,214,301 (4)
Net Change in Fund Balance (5) (4,620) 1,142 5,762
Fund Balance at Beginning of Year 5 4,620 4,621 1
Fund Balance at End of Year $ - $ - $ 5,763 $ 5,763
See accompanying independent auditors' report.
Budgeted Amounts
106
HERNANDO COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL IMPROVEMENT PROGRAM
For the Fiscal Year Ended September 30, 2016
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Interest $ 4,000 $ 4,000 $ 10,257 $ 6,257
Miscellaneous - - - -
Total Revenues 4,000 4,000 10,257 6,257
Expenditures
Current
General Government 40 36,425 36,424 1
Public Safety 788,928 793,426 27,523 765,903
Capital Outlay 57,339 471,810 429,812 41,998
Total Expenditures 846,307 1,301,661 493,759 807,902
Excess of Revenues Over (Under) Expenditures (842,307) (1,297,661) (483,502) 814,159
Other Financing Sources (Uses)
Reserve for Contingencies (710,862) (35,008) - 35,008
Total Other Financing Sources (Uses) (710,862) (35,008) - 35,008
Net Change in Fund Balance (1,553,169) (1,332,669) (483,502) 849,167
Fund Balance at Beginning of Year 1,553,169 1,332,669 1,332,670 1
Fund Balance at End of Year $ - $ - $ 849,168 $ 849,168
See accompanying independent auditors' report.
Budgeted Amounts
107
Internal Service Funds
Central Fueling SystemTo account for the internal operation of the central fueling division of Hernando County.
Risk ManagementTo account for the internal operation of the general insurance programs used by the County.
Workers’ CompensationTo account for the internal operations of the self-insured workers’ compensation program.
Computer ReplacementTo account for the management and replacement of County computers.
Vehicle MaintenanceTo account for the internal operation of the privatized vehicle maintenance program.
Fleet ReplacementTo account for the management and replacement of County vehicles.
County Health InsuranceTo account for self-insured medical insurance provided to the employees by the County.
Sheriff Health InsuranceTo account for self-insured medical insurance provided to the employees by the Sheriff.
ASSETSCurrent Assets Cash and Cash Equivalents $ - $ - $ 200,000 $ - Pooled Cash and Investments 403,983 1,481,307 5,909,786 582,288 Cash with Fiscal Agent - - - - Accounts Receivable (net) 16,067 - - - Due from Other Funds - 2,286 - - Due from Other Governments - 49 - - Inventories 38,189 - - - Prepaid Expenses - - - - Total Current Assets 458,239 1,483,642 6,109,786 582,288 Non-Current Assets Capital Assets, net of accumulated depreciation: Buildings - - - - Equipment - 830 - 262,645 Total Non-Current Assets - 830 - 262,645 Total Assets $ 458,239 $ 1,484,472 $ 6,109,786 $ 844,933
Deferred Outflows of Resources $ 10,634 $ 42,432 $ 22,682 $ -
LIABILITIESCurrent Liabilities: Accounts Payable 47,308 2,606 50,048 - Accrued Liabilities 644 1,292 1,662 - Due to Other Funds 418 - - - Compensated Absences 2,747 7,202 2,193 - Unearned Revenues - - - - Claims Liabilities - - 2,080,000 - Total Current Liabilities 51,117 11,100 2,133,903 - Non-Current Liabilities: Compensated Absences 272 712 217 - Other Post-Employment Benefits 2,365 7,233 9,234 - Net Pension Liability 25,134 77,569 64,370 - Claims Liabilities - - 650,000 - Total Non-Current Liabilities 27,771 85,514 723,821 - Total Liabilities $ 78,888 $ 96,614 $ 2,857,724 $ -
Deferred Inflows of Resources $ 638 $ - $ 253 $ -
NET POSITIONNet Investment in Capital Assets - 830 - 262,645 Unrestricted 389,347 1,429,460 3,274,491 582,288
Total Net Position $ 389,347 $ 1,430,290 $ 3,274,491 $ 844,933
HERNANDO COUNTY, FLORIDACOMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDSSeptember 30, 2016
Central Workers'Fueling Risk ComputerSystem Management Replacement
Compen-sation
108
HERNANDO COUNTY, FLORIDACOMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITIONINTERNAL SERVICE FUNDS
For the Fiscal Year Ended September 30, 2016
$ 720 $ - $ - $ - $ 200,720 759,852 1,300,051 3,469,072 - 13,906,339
- - - 5,322,304 5,322,304 989 - - 51,820 68,876
- - - - 2,286 - - - - 49 - - - - 38,189 - 343,227 - - 343,227
761,561 1,643,278 3,469,072 5,374,124 19,881,990
1,587,165 - - - 1,587,165 6,326 9,690,314 - - 9,960,115
1,593,491 9,690,314 - - 11,547,280 $ 2,355,052 $ 11,333,592 $ 3,469,072 $ 5,374,124 $ 31,429,270
$ 170,703 $ 14,353 $ - $ - $ 260,804
208,832 414,217 671,849 365,074 1,759,934 14,275 1,031 377,625 - 396,529
3,541 146 - - 4,105 38,309 4,051 - - 54,502
- - - 358,666 358,666 - - 554,979 297,063 2,932,042
264,957 419,445 1,604,453 1,020,803 5,505,778
3,789 401 - - 5,391 41,449 3,088 - - 63,369
431,916 39,387 - - 638,376 - - - - 650,000
477,154 42,876 - - 1,357,136 $ 742,111 $ 462,321 $ 1,604,453 $ 1,020,803 $ 6,862,914
$ 8,468 $ 1,807 $ - $ - $ 11,166
1,593,491 9,690,314 - - 11,547,280 181,685 1,193,503 1,864,619 4,353,321 13,268,714
$ 1,775,176 $ 10,883,817 $ 1,864,619 $ 4,353,321 $ 24,815,994
HealthInsuranceReplacement
FleetVehicleMaintenance
SheriffHealth
Insurance Total
County
109
HERNANDO COUNTY, FLORIDACOMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITIONINTERNAL SERVICE FUNDS
For the Fiscal Year Ended September 30, 2016
Operating Revenues Charges for Services $ 888,377 $ 3,949,319 $ 1,324,863 Miscellaneous 10 64 88,913 Total Operating Revenues 888,387 3,949,383 1,413,776
Operating Expenses Personal Services 41,038 86,846 88,366 Other Services & Charges 838,223 3,826,564 253,886 Claims - - 610,062 Depreciation and Amortization - 383 - Total Operating Expenses 879,261 3,913,793 952,314
Operating Income (Loss) 9,126 35,590 461,462
Non-Operating Revenues (Expenses) Interest Income 1,987 26,763 64,049 Gain (Loss) on Sale of Capital Assets - - - Total Non-Operating Revenues (Expenses) 1,987 26,763 64,049
Income (Loss) Before Transfers 11,113 62,353 525,511
Transfers In - - - Transfers Out - - - Total Transfers - - -
Change in Net Position 11,113 62,353 525,511
Net Position-Beginning , As Restated 378,234 1,367,937 2,748,980
Net Position-Ending $ 389,347 $ 1,430,290 $ 3,274,491
See accompanying independent auditors' report.
ManagementCompen-
sationRisk
SystemFueling Central Workers'
110
HERNANDO COUNTY, FLORIDACOMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITIONINTERNAL SERVICE FUNDS
For the Fiscal Year Ended September 30, 2016
$ 178,959 $ 2,321,447 $ 2,089,008 $ 10,450,525 $ 5,192,341 $ 26,394,839 - 588 5,041 182,305 110,905 387,826
178,959 2,322,035 2,094,049 10,632,830 5,303,246 26,782,665
- 702,866 52,726 - - 971,842 11,960 1,767,737 469,418 1,586,376 830,662 9,584,826
- - - 9,447,850 4,440,229 14,498,141 108,706 60,477 1,528,056 - - 1,697,622 120,666 2,531,080 2,050,200 11,034,226 5,270,891 26,752,431
58,293 (209,045) 43,849 (401,396) 32,355 30,234
6,180 992 28,844 24,454 2,615 155,884 - 741 348,113 - - 348,854
6,180 1,733 376,957 24,454 2,615 504,738
64,473 (207,312) 420,806 (376,942) 34,970 534,972
- - 22,675 - - 22,675 - (111,247) (2,428,494) - - (2,539,741) - (111,247) (2,405,819) - - (2,517,066)
64,473 (318,559) (1,985,013) (376,942) 34,970 (1,982,094)
780,460 2,093,735 12,868,830 2,241,561 4,318,351 26,798,088
$ 844,933 $ 1,775,176 $ 10,883,817 $ 1,864,619 $ 4,353,321 $ 24,815,994
Maintenance TotalHealthHealth
Insurance Insurance
SheriffComputer
CountyFleet
ReplacementReplacementVehicle
111
Cash Flows from Operating Activities Receipts from Customers $ 854,054 $ 3,923,963 $ 1,324,863 Receipts from Inter-Fund Services 31,096 23,021 - Payments to Suppliers (859,942) (3,828,548) (288,992)
Payments to Employees (39,805) (80,032) (83,907) Claims Paid - - (1,150,062) Other Receipts (Payments) 10 64 88,913 Net Cash provided by ( used in) Operating Activities (14,587) 38,468 (109,185)
Cash Flows from Noncapital Financing Activities Transfers from Other Funds - - - Transfers to Other Funds - - - Net Cash Provided by (used for) Noncapital Financing Activities - - -
Cash Flows from Capital and Related Financing Activities Additions to Capital Assets 3,828 - - Proceeds From Sale of Capital Assets - - - Net Cash Provided by (used for) Capital and Related Financing Activities 3,828 - -
Cash Flows from Investing Activities Interest Received 1,987 26,763 64,049 Net Cash Provided by Investing Activities 1,987 26,763 64,049
Net Increase (Decrease) in Cash and Cash Equivalents (8,772) 65,231 (45,136)
Cash and Cash Equivalents at Beginning of Year 412,755 1,416,076 6,154,922
Cash and Cash Equivalents at End of Year $ 403,983 $ 1,481,307 $ 6,109,786
See accompanying independent auditors' report.
Fueling Risk Compen-
For the Fiscal Year Ended September 30, 2016
System Management
Central
HERNANDO COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
Workers'
sation
112
Vehicle Fleet
$ 177,482 $ 2,321,458 $ 2,089,008 $ 10,445,895 $ 1,185,261 $ 22,321,984 1,477 209 - 38,046 4,025,666 4,119,515
(11,960) (1,772,470) (1,346,639) (2,083,664) (830,662) (11,022,877)
- (676,492) (49,236) 377,625 - (551,847) - - - (9,406,594) (4,767,370) (15,324,026) - 588 5,041 182,305 110,905 387,826
166,999 (126,707) 698,174 (446,387) (276,200) (69,425)
- - 22,675 - - 22,675 - (111,247) (2,428,494) - - (2,539,741)
- (111,247) (2,405,819) - - (2,517,066)
(58,202) (4,242) (3,422,063) - - (3,480,679) - 741 348,113 - - 348,854
(58,202) (3,501) (3,073,950) - - (3,131,825)
6,180 992 28,844 24,454 2,615 155,884 6,180 992 28,844 24,454 2,615 155,884
114,977 (240,463) (4,752,751) (421,933) (273,585) (5,562,432)
467,311 1,001,035 6,052,802 3,891,005 5,595,889 24,991,795
$ 582,288 $ 760,572 $ 1,300,051 $ 3,469,072 $ 5,322,304 $ 19,429,363
Continued
Replacement Insurance TotalInsuranceMaintenance
SheriffHealthComputer
MaintenanceHealthCounty
113
Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities
Operating Income (Loss) $ 9,126 $ 35,590 $ 461,462
Adjustments to Reconcile Operating Income (Loss) to Net Cash provided by (used in) Operating Activities
Depreciation and Amortization - 383 - Other Post-Employment Benefits 249 507 546 Pension Adjustments 1,414 8,651 3,183 (Increase) Decrease in Accounts Receivable (3,227) - - Due from Other Funds - (2,286) - Due from Other Governments - (49) - Inventories 9,227 - - Prepaid Expenses - - - Increase (Decrease) in Accounts Payable (31,364) (1,984) (35,106) Accrued Liabilities (430) (2,344) 730 Due to Other Funds 418 - - Unearned Revenues - - - Claims Liabilities - - (540,000) Total Adjustments (23,713) 2,878 (570,647)
Net Cash Provided by (used in) Operating Activities $ (14,587) $ 38,468 $ (109,185)
System sationManagement
For the Fiscal Year Ended September 30, 2016
HERNANDO COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
Fueling Compen-RiskCentral Workers'
114
$ 58,293 $ (209,045) $ 43,849 $ (401,396) $ 32,355 $ 30,234
108,706 60,477 1,528,056 - - 1,697,622 - 4,002 330 - - 5,634 - 20,345 1,768 - - 35,361
- 11 - 33,416 23,719 53,919 - - - - - (2,286) - 209 - - - 160 - 46,204 - - - 55,431 - - (343,227) - - (343,227)
- (54,478) (534,140) (497,288) (327,899) (1,482,259) - 2,027 1,392 377,625 - 379,000 - 3,541 146 - - 4,105 - - - - 18,586 18,586 - - - 41,256 (22,961) (521,705)
108,706 82,338 654,325 (44,991) (308,555) (99,659)
$ 166,999 $ (126,707) $ 698,174 $ (446,387) $ (276,200) $ (69,425)
TotalVehicle Health
InsuranceMaintenance Insurance
SheriffHealth
MedicalFleet
ReplacementComputer
Replacement
115
Fiduciary Funds
Board of County Commissioners Agency FundTo account for assets held in trust by the Board of County Commissioners as trustee or agent,
including employee insurance payments, industrial bond escrow funds and impact fees held for the SchoolBoard of Hernando County.
Clerk of Circuit Court Agency FundTo account for assets held in trust by the Clerk of Circuit Court as trustee or agent, including fines and
fees, court registry funds, child support and alimony payments, and juror and witness funds.
Tax Collector Agency FundTo account for assets held in trust by the Tax Collector as trustee or agent, including tax and tag
funds.
Sheriff Agency FundTo account for assets held in trust by the Sheriff as trustee or agent, including service fees.
Board of Clerk
County of the Tax
Commissioners Circuit Court Collector
ASSETS
Cash and Cash Equivalents $ - $ - $ 2,212,834
Pooled Cash and Investments 2,702,183 3,554,076 310,911
Accounts Receivable (net) - 300 -
Due from Other Governments - - 414
Total Assets $ 2,702,183 $ 3,554,376 $ 2,524,159
LIABILITIES
Accounts Payable $ 98,448 $ 14,317 $ 12,050
Accrued Liabilities 2,565,483 2,033,339 -
Due to Other Funds - - -
Due to Other Governments 18,465 645,948 299,298
Deposits 19,787 860,772 2,212,811
Total Liabilities $ 2,702,183 $ 3,554,376 $ 2,524,159
See accompanying independent auditors' report.
HERNANDO COUNTY, FLORIDA
COMBINING BALANCE SHEET
AGENCY FUNDS
September 30, 2016
116
Sheriff Total
$ 103,838 $ 2,316,672
- 6,567,170
- 300
- 414
$ 103,838 $ 8,884,556
$ 40,212 $ 165,027
- 4,598,822
32,334 32,334
10,566 974,277
20,726 3,114,096
$ 103,838 $ 8,884,556
117
Balance Balance
9/30/2015 Additions Deletions 9/30/2016
ASSETS
Pooled Cash and Investments $ 1,902,433 $ 799,750 $ - $ 2,702,183
Total Assets $ 1,902,433 $ 799,750 $ - $ 2,702,183
LIABILITIES
Accounts Payable $ 93,391 $ 5,057 $ - $ 98,448
Accrued Liabilities 1,789,255 776,228 - 2,565,483
Due to Other Governments - 18,465 - 18,465
Deposits 19,787 - - 19,787
Total Liabilities $ 1,902,433 $ 799,750 $ - $ 2,702,183
See accompanying independent auditors' report.
-
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
BOARD OF COUNTY COMMISSIONERS' AGENCY FUNDS
For the Fiscal Year Ended September 30, 2016
118
Balance Balance
9/30/2015 Additions Deletions 9/30/2016
ASSETS
Pooled Cash and Investments $ 3,201,827 $ 352,249 $ - $ 3,554,076
Accounts Receivable (net) 300 - - 300
Total Assets $ 3,202,127 $ 352,249 $ - $ 3,554,376
LIABILITIES
Accounts Payable $ 7,660 $ 6,657 $ - $ 14,317
Accrued Liabilities 1,590,968 442,371 2,033,339
Due to Other Governments 716,074 - 70,126 645,948
Deposits 887,425 - 26,653 860,772
Total Liabilities $ 3,202,127 $ 449,028 $ 96,779 $ 3,554,376
See accompanying independent auditors' report.
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
CLERK OF COURT & COMPTROLLER AGENCY FUNDS
For the Fiscal Year Ended September 30, 2016
119
Balance Balance
9/30/2015 Additions Deletions 9/30/2016
ASSETS
Cash and Cash Equivalents $ 2,178,203 $ 34,631 $ - $ 2,212,834
Pooled Cash and Investments 382,010 - 71,099 310,911
Due from Other Governments 302 112 - 414
Total Assets $ 2,560,515 $ 34,743 $ 71,099 $ 2,524,159
LIABILITIES
Accounts Payable $ 5,099 $ 6,951 $ - $ 12,050
Due to Other Governments 377,237 - 77,939 299,298
Deposits 2,178,179 34,632 - 2,212,811
Total Liabilities $ 2,560,515 $ 41,583 $ 77,939 $ 2,524,159
See accompanying independent auditors' report.
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
TAX COLLECTOR AGENCY FUNDS
For the Fiscal Year Ended September 30, 2016
120
Balance Balance
9/30/2015 Additions Deletions 9/30/2016
ASSETS
Cash and Cash Equivalents $ 87,388 $ 16,450 $ - $ 103,838
Total Assets $ 87,388 $ 16,450 $ - $ 103,838
LIABILITIES
Accounts Payable $ 62,300 $ - $ 22,088 $ 40,212
Due to Other Funds - 32,334 - 32,334
Due to Other Governments 9,045 1,521 - 10,566
Deposits 16,043 4,683 - 20,726
Total Liabilities $ 87,388 $ 38,538 $ 22,088 $ 103,838
See accompanying independent auditors' report.
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
SHERIFF AGENCY FUNDS
For the Fiscal Year Ended September 30, 2016
121
Balance Balance
9/30/2015 Additions Deletions 9/30/2016
ASSETS
Cash and Cash Equivalents $ 2,265,591 $ 51,081 $ - $ 2,316,672
Pooled Cash and Investments 5,486,270 1,151,999 71,099 6,567,170
Accounts Receivable (net) 300 - - 300
Due from Other Governments 302 112 - 414
Total Assets $ 7,752,463 $ 1,203,192 $ 71,099 $ 8,884,556
LIABILITIES
Accounts Payable $ 168,450 $ 18,665 $ 22,088 $ 165,027
Accrued Liabilities 3,380,223 1,218,599 - 4,598,822
Due to Other Funds - 32,334 - 32,334
Due to Other Governments 1,102,356 19,986 148,065 974,277
Deposits 3,101,434 39,315 26,653 3,114,096
Total Liabilities $ 7,752,463 $ 1,328,899 $ 196,806 $ 8,884,556
See accompanying independent auditors' report.
ALL AGENCY FUNDS
For the Fiscal Year Ended September 30, 2016
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
122
STATISTICAL SECTION
This part of Hernando County’s comprehensive annual financial report presents detailedinformation as a context for understanding what the information in the financial statements, notedisclosures, and required supplementary information says about the government’s overallfinancial health.
Contents Page
Financial Trends
S-1through
S-9These schedules contain trend information to help the reader understand howthe government’s financial performance and well-being have changed overtime.
Revenue Capacity
S-10through
S-14These schedules contain information to help the reader assess thegovernment’s most significant local revenue source, the property tax.
Debt Capacity
S-15through
S-19These schedules present information to help the reader assess the affordabilityof the government’s current levels of outstanding debt and the government’sability to issue additional debt in the future
Demographic and Economic Information
S-20through
S-23These schedules offer demographic and economic indicators to help the readerunderstand the environment within which the government’s financial activitiestake place.
Operating Information
S-24through
S-29These schedules contain service and infrastructure data to help the readerunderstand how the information in the government’s financial report relates tothe services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensiveannual financial reports for the relevant year.
Schedule 1
Hernando County, FloridaNet Position by Component
Last Ten Fiscal Years(accrual basis of accounting)
(dollars expressed in thousands)
2007 2008 2009 2010 2011
Governmental Activities
Net Investment in Capital Assets $ 231,151 $ 240,796 $ 257,885 $ 267,795 $ 280,327
Restricted 3,799 69,441 80,026 76,929 86,754
Unrestricted (Deficit) 105,197 55,722 49,724 51,616 37,429
Total Governmental Activities Net Position $ 340,147 $ 365,959 $ 387,635 $ 396,340 $ 404,510
Business-type Activities
Net Investment in Capital Assets $ 138,995 $ 154,168 $ 161,722 $ 173,889 $ 179,518
Restricted 21,771 14,632 37,246 9,964 6,956
Unrestricted 29,032 26,750 25,097 20,836 19,608
Total Business-type Activities Net Position $ 189,798 $ 195,550 $ 224,065 $ 204,689 $ 206,082
Primary Government
Net Investment in Capital Assets $ 370,146 $ 394,964 $ 419,607 $ 441,684 $ 459,845
Restricted 25,570 84,073 117,272 86,893 93,710
Unrestricted 134,229 82,472 74,821 72,452 57,037
Total Primary Government Net Position $ 529,945 $ 561,509 $ 611,700 $ 601,029 $ 610,592
(1) GASB 68 was implemented in 2015, requiring a reduction in beginning net position of $67,122,821 (governmental) and $4,813,564
(business-type). Prior years have not been restated in this schedule.
Fiscal Year
S - 1
2012 2013 2014 2015 (1) 2016
$ 285,954 $ 290,020 $ 292,320 $ 303,506 $ 306,373
88,847 82,667 72,678 61,254 62,476
30,767 24,747 32,333 (28,753) (42,266)
$ 405,568 $ 397,434 $ 397,331 $ 336,007 $ 326,583
$ 170,908 $ 171,017 $ 168,614 $ 171,560 $ 174,660
10,743 10,312 10,442 9,597 12,753
25,030 28,386 33,505 37,215 42,892
$ 206,681 $ 209,715 $ 212,561 $ 218,372 $ 230,305
$ 456,862 $ 461,037 $ 460,934 $ 475,066 $ 481,033
99,590 92,979 83,120 70,851 75,229
55,797 53,133 65,838 8,462 626
$ 612,249 $ 607,149 $ 609,892 $ 554,379 $ 556,888
S - 2
Schedule 2
Hernando County, FloridaChanges in Net Position
Last Ten Fiscal Years (a)
(accrual basis of accounting)
(dollars expressed in thousands)
2007 2008 2009 2010 2011
Expenses
Governmental Activities:
General Government $ 25,058 $ 24,579 $ 23,141 $ 20,142 $ 18,750
Public Safety 70,596 75,116 63,261 61,896 59,674
Physical Environment 1,502 1,175 1,731 1,088 1,236
Transportation 19,539 18,872 18,864 22,998 25,265
Economic Environment 5,654 2,549 2,891 5,919 3,828
Human Services 6,933 6,832 6,622 6,159 7,280
Culture and Recreation 7,400 7,711 7,126 5,839 5,557
Court Operations 7,343 7,817 7,165 5,852 5,771
Interest on Long-term Debt 2,206 2,072 2,095 1,887 1,730
Total Governmental Activities Expenses 146,231 146,723 132,896 131,780 129,091
Business-type Activities:
Water and Sewer District 24,245 25,469 25,669 25,797 25,648
Aviation Operatoins 1,330 1,523 1,664 1,717 2,588
Waste Management 8,361 7,197 9,748 368 6,072
Building Department 5,628 4,350 2,204 1,774 1,710
Zoning Department - - 991 609 446
Total Business-type Activities Expenses 39,564 38,539 40,276 30,265 36,464
Total Primary Government Expenses $ 185,795 $ 185,262 $ 173,172 $ 162,045 $ 165,555
Program Revenues
Governmental Activities:
Charges for Services:
General Government $ 10,620 $ 10,550 $ 11,322 $ 10,729 $ 12,696
Public Safety 14,939 15,757 19,068 16,014 16,153
Physical Environment 238 258 615 172 100
Transportation 12,270 7,292 4,792 4,588 4,460
Economic Environment 325 2 12 24 57
Human Services 279 278 236 245 249
Culture and Recreation 1,302 596 657 655 724
Court Operations 6,875 6,478 5,145 4,196 4,336
Operating Grants and Contributions 7,658 5,709 4,938 7,027 7,818
Capital Grants and Contributions 8,617 7,695 18,733 11,995 15,538
Total Government Activities Program Revenues 63,123 54,615 65,518 55,645 62,131
Business-type Activities:
Charges for Services:
Water and Sewer District 24,875 22,790 22,164 21,941 22,988
Aviation Operations 1,423 1,585 1,726 1,704 1,587
Waste Management 7,468 7,019 7,067 6,867 6,965
Building Department 3,693 2,377 1,482 1,641 1,737
Zoning Department - - 503 302 319
Operating Grants and Contributions 100 48 36 38 584
Capital Grants and Contributions 7,683 5,282 3,554 1,315 2,300
Total Business-type Activities Program Revenues 45,242 39,101 36,532 33,808 36,480
Total Primary Government Program Revenues $ 108,365 $ 93,716 $ 102,050 $ 89,453 $ 98,611
(a) In fiscal year 2009, the Building Department and Zoning Department Business-Type Activities were split and reported separately.
In fiscal year 2015, the Zoning Department was moved to the General Fund.
Fiscal Year
S - 3
2012 2013 2014 2015 2016
$ 17,511 $ 20,629 $ 21,044 $ 22,134 $ 24,583
69,359 69,196 74,079 74,105 86,582
1,114 1,316 988 1,195 1,230
20,939 19,119 19,983 20,187 23,236
2,691 2,377 1,689 2,355 3,095
10,404 8,819 10,009 8,762 7,275
5,004 5,326 5,173 5,146 5,714
5,609 6,140 6,656 6,868 6,773
1,654 1,224 1,144 1,062 1,038
134,285 134,146 140,765 141,814 159,526
25,976 25,147 25,505 25,882 27,673
2,232 2,561 2,914 2,242 2,567
6,040 6,902 6,918 3,348 6,447
1,794 1,724 1,990 2,218 2,786
378 350 359 - -
36,420 36,684 37,686 33,690 39,473
$ 170,705 $ 170,830 $ 178,451 $ 175,504 $ 198,999
$ 12,666 $ 10,116 $ 13,730 $ 14,238 $ 12,050
19,961 18,180 27,931 29,063 31,168
630 79 306 214 345
4,194 4,327 3,165 4,856 5,398
2 115 54 96 -
238 231 245 229 250
809 811 851 833 915
4,399 4,978 5,120 5,059 4,832
3,864 4,528 2,408 5,033 4,935
3,652 4,323 1,887 3,006 1,777
50,415 47,688 55,697 62,627 61,670
24,491 25,275 26,568 28,569 31,032
1,558 1,878 1,629 1,607 1,806
7,085 7,331 7,420 7,668 7,653
1,921 1,792 1,900 2,602 2,970
274 247 320 - -
85 75 245 294 94
2,409 2,036 1,549 2,531 5,306
37,823 38,634 39,631 43,271 48,861
$ 88,238 $ 86,322 $ 95,328 $ 105,898 $ 110,531
S - 4
Schedule 2
Hernando County, FloridaChanges in Net Position (Continued)
Last Ten Fiscal Years(accrual basis of accounting)
(dollars expressed in thousands)
2007 2008 2009 2010 2011
Net (Expense)/Revenue
Governmental Activities $ (83,108) $ (92,108) $ (67,378) $ (76,135) $ (66,960)
Business-type Activities 5,678 562 (3,744) 3,543 15
Total Primary Government Net Expense $ (77,430) $ (91,546) $ (71,122) $ (72,592) $ (66,945)
General Revenues and Other Changes in
Net Position
Governmental Activities:
Taxes
Property Taxes $ 90,478 $ 85,150 $ 67,314 $ 61,237 $ 52,091
Fuel Taxes 7,192 6,952 6,573 6,696 7,112
Sales Taxes 8,228 7,631 7,098 7,154 7,817
Other Taxes 1,919 1,927 2,155 1,892 1,946
State Shared Revenue 4,159 3,967 3,592 3,611 3,758
Investment Earnings 8,129 8,371 5,599 2,449 1,297
Miscellaneous 2,240 282 1,113 1,532 941
Gain on Sale of Capital Assets - - - 354 47
Extraordinary Item (5,110) 3,695 - - -
Transfers (1,009) (56) (3,663) (85) 121
Total Governmental Activities 116,226 117,919 89,781 84,840 75,130
Business-type Activities:
Investment Earnings 3,725 3,294 1,976 846 382
Gain on Sale of Capital Assets 93 6 12 4 1
Miscellaneous 1,622 1,834 1,510 1,242 1,116
Transfers 1,009 56 3,664 85 (121)
Total Business-type Activities 6,449 5,190 7,162 2,177 1,378
Total Primary Government $ 122,675 $ 123,109 $ 96,943 $ 87,017 $ 76,508
Change in Net Position
Governmental Activities $ 33,118 $ 25,811 $ 22,403 $ 8,705 $ 8,170
Business-type Activities 12,127 5,752 3,418 5,720 1,393
Total Primary Government $ 45,245 $ 31,563 $ 25,821 $ 14,425 $ 9,563
Fiscal Year
S - 5
2012 2013 2014 2015 2016
$ (83,870) $ (85,068) $ (79,187) $ (104,569) $ (97,856) 1,404 1,945 9,581 3,988 9,388
$ (82,466) $ (83,123) $ (69,606) $ (100,581) $ (88,468)
$ 56,605 $ 57,141 $ 59,178 $ 58,984 $ 61,572 6,216 6,058 6,089 6,242 8,146 7,367 7,638 8,029 8,697 9,100 1,768 1,804 1,667 2,530 2,560 4,013 4,227 4,428 4,756 4,889 2,209 73 1,475 1,671 1,437 1,787 1,460 4,351 1,274 1,378
- - 28 221 349 - - - - -
(77) (76) (18) 610 (998) 79,888 78,325 85,227 84,985 88,433
664 31 605 743 701 (1,091) 116 50 46 28
(454) 860 900 864 818 77 76 18 (610) 998
(804) 1,083 1,573 1,043 2,545 $ 79,084 $ 79,408 $ 86,800 $ 86,028 $ 90,978
$ (3,981) $ (6,743) $ 6,040 $ (19,584) $ (9,423) 600 3,028 11,154 5,031 11,933
$ (3,381) $ (3,715) $ 17,194 $ (14,553) $ 2,510
S - 6
Schedule 3
Hernando County, FloridaFund Balances of Governmental Funds
Last Ten Fiscal Years (a)(modified accrual basis of accounting)
(dollars expressed in thousands)
2007 2008 2009
General Fund Reserved $ 522 $ 670 $ 687 Unreserved 37,782 36,750 30,054 Total General Fund $ 38,304 $ 37,420 $ 30,741
All other Government Funds Reserved $ 6,333 $ 1,946 $ 10,982 Unreserved, reported in: Special Revenue Funds 66,442 81,675 79,719 Capital Projects Funds 5,349 9,144 13,630 Total all other Governmental Funds $ 78,124 $ 92,765 $ 104,331
2010 2011 2012 2013 2014 2015 2016
General Fund Nonspendable $ 206 $ 215 $ 187 $ 145 $ 46 $ 829 $ 4,570 Restricted 4,435 3,630 2,783 981 312 142 341 Committed 4,776 4,854 4,968 4,436 4,812 5,374 5,320 Assigned 1,725 2,300 8,500 3,350 5,712 4,000 3,000 Unassigned 17,027 13,277 10,225 9,825 12,034 12,992 9,443 Total General Fund $ 28,169 $ 24,276 $ 26,663 $ 18,737 $ 22,916 $ 23,337 $ 22,674
All other Governmental Funds Nonspendable $ 58 $ 56 $ 674 $ 574 $ 78 $ 65 $ 57 Restricted 80,134 81,256 83,527 79,282 69,625 59,257 59,914 Committed 1,184 925 965 966 1,017 1,140 1,247 Assigned 22,933 18,598 7,410 7,473 9,220 10,164 8,104 Total all other Governmental Funds $ 104,309 $ 100,835 $ 92,576 $ 88,295 $ 79,940 $ 70,626 $ 69,322
(a) GASB Statement No. 54 was implemented in fiscal year 2011. Fiscal year 2010 data was restated for presentation comparable to GASB Statement No. 54.
Fiscal Year
S - 7
Schedule 4
Hernando County, FloridaChanges in Fund Balances of Governmental Funds
Last Ten Fiscal Years(modified accrual basis of accounting)
(dollars expressed in thousands)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
RevenueTaxes $ 99,588 $ 94,029 $ 76,043 $ 69,826 $ 60,486 $ 64,669 $ 65,009 $ 66,892 $ 67,733 $ 72,115 Licenses and Permits 107 120 104 109 97 157 62 60 390 446 Intergovernmental 26,505 21,889 26,752 34,852 29,968 24,855 24,149 20,716 23,624 23,916 Charges for Services 21,354 22,911 19,741 15,015 14,476 18,020 18,276 21,034 28,395 26,403 Fines and Forfeitures 2,422 2,378 3,940 996 635 974 1,060 1,692 1,621 1,543 Special Assessments 9,397 11,225 11,248 11,269 11,302 11,388 11,348 19,155 19,140 20,404 Impact Fees 7,633 5,995 3,050 478 783 146 (6) 422 892 1,299 Interest 7,683 8,030 5,278 2,296 1,204 2,012 99 1,334 1,460 1,281 Miscellaneous 3,884 1,927 1,824 1,950 4,832 5,646 2,513 8,535 2,552 2,553 Total Revenues $ 178,573 $ 168,504 $ 147,980 $ 136,791 $ 123,783 $ 127,867 $ 122,510 $ 139,840 $ 145,807 $ 149,960
ExpendituresCurrent General Government $ 22,763 $ 22,552 $ 20,624 $ 18,264 $ 16,905 $ 15,891 $ 18,563 $ 18,516 $ 20,258 $ 21,271 Public Safety 68,420 71,908 60,334 60,096 58,051 67,047 67,047 70,449 75,963 78,707 Physical Environment 1,492 1,097 1,643 1,004 1,148 1,057 1,140 966 1,131 1,094 Transportation 14,593 14,837 14,547 13,374 13,112 12,666 13,037 13,500 13,584 14,932 Economic Environment 5,620 2,516 2,838 5,881 3,799 2,646 2,350 1,639 2,298 3,031 Human Services 5,272 5,448 5,234 4,757 5,882 9,054 7,402 8,538 7,043 5,520 Culture and Recreation 6,746 6,774 6,326 5,004 4,749 4,228 4,500 4,316 4,615 4,758 Court Operations 7,297 7,732 7,084 5,756 5,602 5,461 6,034 6,525 6,708 6,585 Debt Service Principal 3,740 3,058 3,209 3,376 3,141 3,204 3,319 3,085 2,888 3,854 Interest and Fiscal Charges 2,177 2,047 2,040 2,037 1,691 1,627 963 1,078 990 978 Capital Outlay 21,112 18,626 16,240 20,042 17,602 15,095 14,227 15,663 19,297 13,475 Total Expenditures $ 159,232 $ 156,595 $ 140,119 $ 139,591 $ 131,682 $ 137,976 $ 138,582 $ 144,275 $ 154,775 $ 154,205
Excess of Revenues Over (Under) Expenditures 19,341 11,909 7,861 (2,800) (7,899) (10,109) (16,072) (4,435) (8,968) (4,245)
Fiscal Year
S - 8
Schedule 4
Hernando County, FloridaChanges in Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years(modified accrual basis of accounting)
(dollars expressed in thousands)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Other Financing Sources (Uses)Transfers In 13,545 13,489 17,351 12,226 6,488 12,851 10,276 6,812 6,046 10,989 Transfers Out (12,963) (12,637) (20,922) (12,152) (6,256) (12,964) (10,889) (8,266) (7,834) (9,469) Additions to Long-Term Debt - 996 1,323 50 299 196 29,786 1,713 1,864 757 Proceeds of Refunding Bonds - - - 5,700 - - - - - - Premium on Refunding Bonds - - - 23 - - - - - - Discount on Refunding Bonds - - - - - - - - - - Payment to Refunded Bond Escrow Agent - - - (5,640) - - (25,308) - - - Total Other Financing Sources (Uses) 582 1,848 (2,248) 207 531 83 3,865 259 76 2,277
Net Change in Fund Balances $ 19,923 $ 13,757 $ 5,613 $ (2,593) $ (7,368) (10,026) (12,207) (4,176) (8,892) (1,968)
Debt Service as a Percentage of Noncapital Expenditures 4.3% 3.7% 4.2% 4.3% 4.0% 3.8% 3.4% 3.2% 2.9% 3.4%
Fiscal Year
S - 9
Schedule 5
Hernando County, FloridaGeneral Government State Shared Revenues by Source
Last Ten Fiscal Years(dollars expressed in thousands)
Local State State
Government Revenue Local Housing
Half-Cent Sharing Constitutional County Option Initiative
Fiscal Year Sales Tax Proceeds Fuel Tax Fuel Tax 1 - 6 cents Partnership
2007 8,228 3,758 1,783 777 4,916 1,721
2008 7,631 3,562 1,728 753 4,746 1,110
2009 7,098 3,228 1,696 735 4,450 1,604
2010 7,154 3,252 1,656 723 4,548 350
2011 7,232 3,398 1,660 725 4,457 350
2012 7,354 3,653 1,702 737 4,277 -
2013 7,608 3,838 1,657 731 4,136 428
2014 8,000 4,063 1,701 734 4,143 -
2015 8,647 4,392 1,724 756 4,257 864
2016 9,099 4,519 1,780 787 4,571 878
(a) Note that these revenue sources are a component of Intergovernmental Revenues on the financial statements. Other
Components of Intergovernmental Revenues include federal, state, and local government grants.
S - 10
Schedule 6
Hernando County, FloridaFair Market, Assessed Value and Taxable Value of Property
Last Ten Fiscal Years(dollars expressed in thousands)
Fair Market (a)(i) Assessed Value (b)(i) Taxable Value (d)(i)
Tax Roll Real Personal Real Personal Real Personal Real Personal Centrally Total Direct
Year Property (f) Property (g) Property (f) Property (g) Property (f) Property (g) Property (f) Property (g) Assessed (h) Total Tax Rate (e)
2007 16,518,236 1,105,701 13,238,586 1,085,763 2,695,549 244,027 10,543,037 841,735 13,699 11,398,471 7.7456
2008 15,836,287 1,185,886 13,371,281 1,167,054 3,920,192 325,882 9,451,089 841,172 6,398 10,298,659 7.6981
2009 13,471,361 1,403,422 11,638,948 1,111,661 3,752,551 339,154 8,229,029 1,044,563 6,924 9,280,516 7.6826
2010 11,572,263 1,669,623 10,731,692 1,652,662 3,593,658 336,472 7,138,035 1,316,191 6,499 8,460,724 7.7206
2011 10,600,374 1,629,933 9,915,576 1,585,617 3,466,896 325,372 6,448,681 1,260,244 7,199 7,716,124 7.7912
2012 9,949,202 1,691,643 9,269,516 1,645,987 3,332,500 339,564 5,937,016 1,306,423 7,325 7,250,764 8.2396
2013 9,989,311 1,602,911 9,341,160 1,594,242 3,349,573 627,890 5,991,587 966,351 7,626 6,965,564 8.4478
2014 10,349,863 1,606,000 9,531,618 1,604,589 3,350,771 608,798 6,180,847 995,791 7,842 7,184,480 8.4775
2015 10,800,268 1,585,644 9,795,639 1,584,744 3,403,429 600,482 6,392,210 984,263 7,869 7,384,342 8.5941
2016 11,208,262 1,703,765 10,044,161 1,703,015 3,473,220 596,852 6,570,941 1,106,163 8,326 7,685,431 8.5942
(a)
(b)
(c)
(d)
(e)
(f)
(g) Personal Property commonly known as Tangible Personal Property (TPP) is defined as furniture, fixtures and equipment used in the operation of a business.
(h) Centrally assessed property are the railroad tracks and train cars which cross county lines and are assessed by the Florida Department of Revenue who provide the assessed values to
(i)
Data represents the tax roll for the year effective January 1 of the year reflected, billed in October of that year, and is collected to support the fiscal year beginning in that year.
Source: Hernando County Property Appraiser
Exemptions (c)(i)
Florida law requires that 'Just Value' of all property be determined each year. The Florida Supreme Court has declared Just Value to be legally synonymous to Full Cash Value and FairMarket Value. The Just Value or Fair Market Value is the amount it could sell for in a competitive open market, assuming that the buyer and seller both acted knowledgeably and without
Assessed value is different than just/market value for those properties that have assessment limitations on them. Examples of assessment limitations include Save our Homes (SOH)limitation for homestead properties, "greenbelt" for properties which have an agricultural use classification, and pollution control devices.
duress.
There are a number of property tax exemptions which include, but are not limited to; homestead, widow/widowers, blind, disabled, veterans, government and institutional.
the respective Property Appraiser. No exemptions are applicable to Centrally Assessed Properties.
The year previous to current year may be restated due to changes made subsequent to release of previous year's values.
to develop the ad valorem property tax.Taxable value is the resulting value after all applicable exemptions have been deducted from the assessed value of the property. The taxable value is what the millage rates are applied
Total Direct Tax Rate is the weighted average of the direct rates in each area. See Schedule 7, "Direct and Overlapping Property Tax Rates" for more information.
Real Property means land, buildings, fixtures, and all other improvements to land.
S - 11
Schedule 7
Hernando County, FloridaDirect and Overlapping Property Tax Rates
Last Ten Fiscal Years
DIRECT RATES (a)Countywide Hernando County Government:General Fund 5.4394 5.4394 5.4394 5.4394 5.6279 5.9169 6.8669 6.9912 6.9912 6.9912Special Revenue Transportation Trust Fund 0.7091 0.7091 0.7091 0.7091 0.7091 0.7091 0.7091 0.7091 0.7091 0.7091 Health Department 0.1102 0.1102 0.1102 0.1102 0.1102 0.1102 0.1102 0.1102 0.1102 0.1102 Sensitive Lands Fund (voted) 0.0844 0.0844 0.0844 0.0844 - - - - - - Total Countywide 6.3431 6.3431 6.3431 6.3431 6.4472 6.7362 7.6862 7.8105 7.8105 7.8105 Maximum Allowed (b) 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000
OtherHernando County Government:Municipal Services Taxing Units Stormwater Management Program 0.1139 0.1139 0.1139 0.1139 0.1139 0.1139 0.1139 0.1139 0.1139 0.1139 Emergency Medical Services 0.5839 0.5598 0.5598 0.5598 0.5598 0.5598 0.5534 0.5534 0.6700 0.6700 Mosquito Control - - - - 0.0844 0.0844 0.1000 - - - Spring Hill Fire and Rescue (e) 2.2686 2.2686 2.2686 2.5000 2.5000 2.5000 - - - - Total 2.9664 2.9423 2.9423 3.1737 3.2581 3.2581 0.7673 0.6673 0.7839 0.7839 Maximum Allowed Per Taxpayer (b) 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000
Total Direct Tax Rates (c) 7.7456 7.6981 7.6826 7.7206 7.7912 8.2396 8.4478 8.4775 8.5941 8.5942
OVERLAPPING RATES (d)CountywideSchool Board 8.0650 7.7790 7.4790 0.7417 7.5080 7.4540 7.2800 7.1670 7.1960 6.8690Southwest Florida Water Management District 0.3866 0.3866 0.3866 0.3770 0.3928 0.3928 0.3818 0.3658 0.3488 0.3317
Not CountywideMunicipalities City of Brooksville 6.3230 6.0690 6.0690 6.3700 6.3700 6.3700 6.7317 6.6962 6.6439 6.6426 City of Weeki Wachee 2.1744 2.1173 2.5769 2.6587 2.7838 2.7137 2.7654 2.6237 2.7622 2.8478Southwest Florida Water Management District Withlacoochee Basin 0.2308 0.2308 0.2308 0.2380 - - - - - - Coastal Basin 0.1885 0.1885 0.1885 0.1885 - - - - - -
(a) Direct rates support the ad valorem revenue base for County Government operations.
(MSTU).
(d) Overlapping rates are those rates levied by other local governments who overlap Hernando County's geographic area. Not all rates apply to all Hernando County residents; for example each incorporated municipality within the County also taxes its respective residents
(e) On June 11, 2009, a Special Act of the Legislature was passed changing the Spring Hill Fire And Rescue's status to independent of the County and subsequently was dissolved becoming dependent on the County on October 1, 2011.
(f) Data represents the millages used to approve the budget, and calculate taxes to support the following year, but are based on the tax roll which began on January 1 for reflected year.
Source: Hernando County Property Appraiser
20112007 2008
Fiscal Year
2010 20122009 2013 2014
(b) Section 200.071, Florida Statutes, a county may not levy in excess of 10 mills, except for voted levies and for services or facilities provided through a municipal services taxing unit
(c) Total Direct Tax Rate is the weighted average of the direct rates in each area.
2015 2016
S - 12
Schedule 8
Hernando County, FloridaPrincipal Property Taxpayers
Latest Fiscal year compared to the Fiscal Year Ten Years Earlier(dollars expressed in thousands)
2016 2006
Percentage of Percentage of
Taxable Total Taxable Taxable Total Taxable
Assessed Assessed Assessed Assessed
Taxpayer Type of Business Value Rank Value Value Rank Value
Cement
Cemex, Inc. Manufacturing $ 262,841 1 3.42% $ 49,820 6 0.50%
Withlacoochee River
Electric Co-op Electric Utility 189,253 2 2.46% 116,920 2 1.18%
Florida Power Development, LLC Electric Utility 150,346 3 1.96%
Retail Sales,
Wal-Mart Stores, Inc. Distribution 113,466 4 1.48% 123,139 1 1.24%
Duke Energy (formerly Progress Electric Utility 80,531 5 1.05% 36,795 8 0.37%
Energy)
Florida Gas Transmissions Utility 46,678 6 0.61%
HCA Health Services
of Florida, Inc. Hospital/Health Care 46,385 7 0.60% 63,552 4 0.64%
AT&T
Telecommunications Telecommunications 36,478 8 0.47%
Bright House Networks Cable Utility 32,057 9 0.42% 30,955 9 0.31%
BRE DDR Retail Sales 25,615 10 0.33%
Florida Crushed Stone
Corporation Rock Mining 64,572 3 0.65%
Bell South Telecommunications Public Utility 59,331 5 0.60%
Hampton Ridge Development Real Estate 39,834 7 0.40%
BDC Investors Real Estate 27,031 10 0.27%
Totals $ 983,650 12.80% $ 611,949 6.16%
Source: Hernando County Property Appraiser
S - 13
Schedule 9
Hernando County, FloridaProperty Tax Levies and Collections
Last Ten Fiscal Years(dollars expressed in thousands)
Certified Adjusted
Fiscal Year Taxes Levied Certificates of Taxes Levied Prior Year
Ended for the Correction by for the Levied Adjusted Percentage Taxes Percentage
September 30 Fiscal Year (a) (d) Property Appraiser Fiscal Year (a) Collections Discounts/Penalties Collections Collected Collected (c) Amount Collected
2007 107,611 107,132 99.55 41 107,173 99.59
2008 104,359 103,128 98.82 326 103,454 99.13
2009 95,401 93,822 98.34 698 94,520 99.08
2010 (e) 87,787 (335) 87,452 86,578 (2,490) 84,088 96.15 772 84,860 97.04
2011 81,473 (1,728) 79,745 76,596 (2,276) 74,320 93.20 776 75,096 94.17
2012 77,291 (1,801) 75,490 73,689 (2,197) 71,492 94.70 677 72,169 95.60
2013 75,403 (2,870) 72,533 72,114 (2,197) 69,917 96.39 320 70,237 96.83
2014 83,274 (204) 83,070 82,776 (2,531) 80,245 96.60 404 80,649 97.09
2015 85,321 (419) 84,902 84,555 (2,629) 81,926 96.49 229 82,155 96.76
2016 88,933 (112) 88,821 88,485 (2,778) 85,707 96.49 403 86,110 96.95
( a) Certified taxes levied is the original tax assessment due to Hernando County before any adjustments are determined by Property Appraiser and/or the Value Adjustment
Board, and before any tax amounts are determined to be uncollectible due to insolvencies and/or litigation. Adjusted Taxes Levied reflects changes made throughout
the fiscal year. The tax levy represents only the taxes due to the Hernando County financial reporting entity and therefore, excludes taxes due to the School Board, the City
of Brooksville, Southwest Florida Water Management District and certain other governmental entities. This corresponds to the Direct Tax Rates section of Schedules 6 and 7.
( b) In accordance with Florida Statutes, property taxes become due and payable on November 1 of each year and are delinquent on April 1 of the following year. A four percent
discount is allowed if the taxes are paid in November, with the discount declining by one percent each month thereafter. Taxes collected will not equal 100% of the tax levy
due to insolvencies, litigation and county certificates. In the table above, taxes collected November 1, 2014 through March 31, 2015 are reflected as levied for the Fiscal Year
Ended September 30, 2015. Tax Certificates for unpaid taxes and assessments for that year will be sold no later than June 1, 2015.
( c) Includes all delinquent tax collections received during the year regardless of the year in which the taxes were originally levied.
( d) Includes non-ad valorem taxes, which are not a part of the tax notice. Non-ad valorem taxes are separately reported as Special Assessments in the Governmental Funds and
are part of Charges for Services in the Proprietary Funds.
( e) Effective fiscal year 2010, it has been deemed more informative to provide additional information.
Source: Hernando County Tax Collector
Collected Within the
Fiscal year of the Levy (b) Total Taxes Collected
S - 14
Schedule 10
Hernando County, FloridaRatios of Outstanding Debt by Type
Last Ten Fiscal Years(dollars expressed in thousands, except per capita)
Revenue and Water and Debt as aFiscal Year Revenue Sewer Solid Waste Total Ratio to
Ended Refunding Notes Capital Revenue Revenue Notes Primary Personal Debt PerSeptember 30 Bonds (a) Payable Leases Bonds (a) Bonds (a) Payable Government Income (b) Capita
2007 48,554 1,732 - 53,283 - 1,235 104,804 2.21% 6432008 45,987 1,238 946 51,512 - 965 100,648 2.01% 6062009 43,351 2,076 807 49,701 - 1,559 97,494 1.89% 5902010 40,970 1,370 657 47,947 - 11,514 102,458 2.02% 6192011 38,376 1,278 498 45,962 - 18,207 104,321 1.96% 6032012 35,711 916 512 43,915 - 24,969 106,023 1.91% 6132013 8,663 29,230 535 40,920 - 24,195 103,543 1.89% 596
2014 ( c) 6,983 30,900 217 40,666 - 23,196 101,962 2.04% 5832015 5,209 31,665 54 38,337 - 40,540 115,805 2.13% 6552016 3,964 29,852 - 35,949 - 57,739 127,504 - 712
Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements.
(a) Bonds are shown net of related deferred gains or losses on bond refundings and net of related unamortized bond issue premiums or discounts.
(b) Due to a time lag in receiving personal income figures, ratios were not reported for the most recent year(s).See Schedule 14, "Demographic and Economic Statistics", for actual personal income and population figures used above. Source: U.S. Department of Commerce Bureau of Economic Analysis
( c) Effective 2014, debt amounts exclude losses which have been reclassified to deferred outflows on the balance sheet in accordance with GASB 65.
Governmental Activities Business-Type Activities
S - 15
Schedule 11
Hernando County, FloridaRatios of General Bonded Debt Outstanding
Last Ten Fiscal Years(dollars expressed in thousands, except per capita amount)
Revenue and Percentage of General
Fiscal Year Revenue Less: Amounts Taxable Debt
Ended Refunding Available in Debt Net General Value of Per
September 30 Bonds Service Fund Bonded Debt Property (a) Capita (b)
2007 48,554 652 47,902 0.42% 293
2008 45,987 688 45,299 0.44% 272
2009 43,351 753 42,598 0.45% 257
2010 40,970 723 40,247 0.48% 247
2011 38,376 650 37,726 0.49% 221
2012 35,711 671 35,040 0.48% 206
2013 8,663 667 7,996 0.11% 50
2014 6,983 658 6,325 0.09% 40
2015 5,209 82 5,127 0.07% 29
2016 3,964 22 3,942 0.05% 22
Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements.
(a) Bonds are shown net of related deferred gains or losses on bond refundings and net of related unamortized bond
issue premiums or discounts.
(b) Taxable Value information can be found on Schedule 6, Schedule of Fair Market, Assessed Value and Taxable Value of
Property for property value data.
(c) Population data can be found on Schedule 14, Schedule of Demographic and Economic Statistics.
S - 16
Schedule 12
Hernando County, FloridaComputation of Direct and Overlapping Debt
Payable from
Ad Valorem
Taxes
Non-Self-
Supporting
Revenue Debt Total
Percentage
of Debt to
Total Debt
COUNTY BOARD:
Non-revolving line of credit draws $ - $ 7,269,217 $ 7,269,217 4.27%
Non-Ad Valorem Refunding Revenue Note, Series 2012 - 22,583,000 22,583,000 13.28%
Capital Improvement and Refunding Revenue Bonds,
Series 2004 - 935,000 935,000 0.55%
Non-Ad Valorem Refunding Revenue Bonds,
Series 2010 - 3,015,000 3,015,000 1.77%
Subtotal Direct Debt $ - $ 33,802,217 $ 33,802,217 19.87%
SCHOOL BOARD: (1)
State Board of Education Bonds, Series 2009A Refunding - 95,000 95,000 0.06%
State Board of Education Bonds, Series 2010A - 1,150,000 1,150,000 0.68%
State Board of Education Bonds, Series 2011A Refunding - 285,000 285,000 0.17%
State Board of Education Bonds, Series 2014A Refunding - 463,000 463,000 0.27%
State Board of Education Bonds, Series 2014B Refunding - 927,000 927,000 0.55%
Bonds Payable-Unamortized Premium 297,089 297,089 0.17%
Certificates of Participation, Series 2013A - 20,819,668 20,819,668 12.24%
Certificates of Participation, Series 2016A - 90,645,000 90,645,000 53.29%
Unamortized Premium 11,553,598 11,553,598 6.79%
Capital Improvement bonds, Series 2001 - 2,235,000 2,235,000 1.31%
Notes Payable - 4,860,255 4,860,255 2.86%
CITY OF BROOKSVILLE:
General Fund Promissory Note 247,291 - 247,291 0.15%
USDA Loan - 150,000 150,000 0.09%
Florida Capital Improvement Revenue Note,
Series 2011 - 2,552,689 2,552,689 1.50%
Subtotal Overlapping Debt $ 247,291 $ 136,033,299 $ 136,280,590 80.13%
Total Direct and Overlapping Debt $ 247,291 $ 169,835,516 $ 170,082,807 100.00%
(1) Outstanding debt obligations for Hernando County School Board at June 30, 2016.
The percentage of the overlap is calculated as follows:
Total Overlapping Debt
Total Direct and Overlapping Debt
S-17
Schedule 13A
Hernando County, FloridaSchedule of Revenue Bond Coverage
Capital Improvement Revenue Bonds, Series 2004
Last Ten Fiscal Years(dollars expressed in thousands)
Fiscal Year Net Revenue
Ended Gross Available for
September 30 Revenues (a) Expenditures (b) Debt Service Principal Interest Total Coverage
2007 8,228 - 8,228 1,820 1,848 3,668 2.24
2008 7,631 - 7,631 1,870 1,795 3,665 2.08
2009 7,098 - 7,098 1,920 1,737 3,657 1.94
2010 7,154 - 7,154 1,500 1,388 2,888 2.48
2011 7,232 - 7,232 1,545 1,342 2,887 2.51
2012 7,354 - 7,354 1,595 1,292 2,887 2.55
2013 7,608 - 7,608 825 131 956 7.96
2014 8,000 - 8,000 850 106 956 8.37
2015 8,647 - 8,647 875 78 953 9.07
2016 9,099 - 9,099 905 48 953 9.55
(a) Gross revenues reflect the pledged revenues for the bonds. Pledged revenues for these bonds consist of the distribution of theState "Half-Cent Sales Tax".
(b) There are no expenditures that relate directly to the gross revenue, but gross revenues not used for the purpose of debt service
are used for other purposes in the budget.
( c) In 2013, a Non-Ad Valorem Refunding Revenue Note for $24,430,000 was used to refinance Capital Improvement and Refunding
Bonds, Series 2002 and a portion of Capital Improvement and Refunding Bonds, Series 2004.
Fiscal Year Net Revenue
Ended Gross Available for
September 30 Revenues (a) Expenditures (b) Debt Service Principal Interest Total Coverage
2011 31,221 - 31,221 560 178 738 42.30
2012 31,807 - 31,807 570 164 734 43.33
2013 28,088 - 28,088 600 595 1,195 23.50
2014 34,209 - 34,209 310 761 1,071 31.94
2015 33,869 - 33,869 557 749 1,306 25.93
2016 34,711 34,711 1,935 720 2,655 13.07
(a) Gross revenues reflect the pledged revenues for the bonds and notes. Pledged revenues consist of non-ad valorem revenues.
(b) There are no expenditures that relate directly to the gross revenue, but gross revenues not used for the purpose of debt serviceare used for other purposes in the budget.
(dollars expressed in thousands)
Debt Service Requirements
Debt Service Requirements
Hernando County, FloridaSchedule of Non-Ad Valorem Debt Coverage
Non-Ad Valorem Refunding Revenue Bonds, Series 2010
Last Four Fiscal Years
Schedule 13B
Non-Ad Valorem Refunding Revenue Note, Series 2012
S - 18
Schedule 13C
Hernando County, FloridaSchedule of Revenue Bond Coverage
Water and Sewer Revenue Bonds, Series 2013A
Last Ten Fiscal Years(dollars expressed in thouands)
Fiscal Year Net Revenue
Ended Gross Available for Connection Pledged
September 30 Revenues(a) Expenses (b) Debt Service Fees Funds(c) Principal Interest Total Coverage
2007 27,342 15,715 11,627 2,427 14,054 1,725 2,353 4,078 3.45
2008 25,386 17,066 8,320 1,437 9,757 1,770 2,310 4,080 2.39
2009 23,531 17,490 6,041 1,579 7,620 1,815 2,262 4,077 1.87
2010 22,667 17,479 5,188 553 5,741 1,880 2,198 4,078 1.41
2011 23,496 17,110 6,386 552 6,938 1,990 2,044 4,034 1.72
2012 24,894 16,086 8,808 538 9,346 2,055 1,982 4,037 2.31
2013 25,623 15,026 10,597 794 11,391 2,125 1,916 4,041 2.82
2014 27,270 15,617 11,653 1,379 13,032 2,015 1,525 3,540 3.68
2015 29,089 16,062 13,027 1,384 14,411 2,150 1,652 3,802 3.79
2016 31,925 17,805 14,120 2,178 16,298 2,210 1,590 3,800 4.29
(a) Pursuant to bond definitions, gross revenues include operating revenue and interest income, but do not include sewer connection
fees, water connection fees or special assessment proceeds.
(b) Pursuant to bond definitions, expenses do not include amortizations or depreciation. Similarly, charges associated with replacement
of vehicles in lieu of depreciation have not been included.
(c) Effective with the issuance of the Water and Sewer Refunding Revenue Bonds Series 2003, connection fees are included in the
definition of pledged funds.
(d) Includes Water and Sewer Refunding Revenue Bonds, Series 2013A, and the Water and Sewer portion of the Non-Ad Valorem Refunding
Revenue Bonds, Series 2010.
Debt Service Requirements
S - 19
Schedule 14
Hernando County, FloridaDemographic and Economic Statistics
Last Ten Fiscal Years
Personal Total Citizens Unincorporated Income Personal With a Public
Fiscal City of City of Hernando Permanent Per Income Median Bachelors School UnemploymentYear Brooksville Weeki Wachee County Total Households (b) Capita (c)(f) (in thousands) (c)(f) Age (c) Degree(b) Enrollment (d) Rate (e)
2007 7,309 8 154,876 162,876 68,789 28,064 4,737,480 45.3 9.9% 23,382 6.0%2008 7,640 8 158,325 165,973 70,263 29,148 4,997,414 44.3 14.7% 22,492 9.2%2009 7,633 7 157,408 165,154 70,022 29,950 5,147,746 44.8 15.1% 22,598 13.8%2010 7,592 7 157,973 165,572 70,231 29,397 5,079,155 46.8 15.5% 22,316 14.8%2011 7,711 12 165,355 173,078 71,864 30,729 5,318,514 47.7 16.2% 22,146 13.5%2012 7,702 12 165,397 173,111 72,106 31,927 5,536,867 47.7 16.2% 21,855 10.4%2013 7,643 5 166,160 173,808 72,238 31,422 5,481,211 48.0 15.5% 21,541 8.5%2014 7,687 5 167,263 174,955 72,492 32,324 5,684,266 48.5 14.9% 21,470 8.1%2015 7,780 5 169,034 176,819 72,951 33,666 6,007,249 48.0 15.5% 21,421 6.5%2016 8,006 5 171,492 179,503 73,402 - - 48.4 15.7% 21,613 6.2%
(a) Source: Bureau of Economic and Business Research (BEBR), University of Florida. These numbers have been adjusted to reflect BEBR data available through April 1 annually.
(b) Source: Hernando County Planning Department
(c) Source: Bureau of Economic and Business Research, University of Florida.
(d) Source: Hernando County School Board
(e) Source: Florida Department of Economic Opportunity, September annually (not seasonally adjusted)
(f) Due to a time lag in receiving personal income and population figures, ratios were calculated using income and population figures from the most recently available information.
Population (a)
S - 20
Schedule 15
Hernando County, FloridaPrincipal Employers (a)
Non-retail, Non-government
Latest Fiscal Year compared to the Nine Prior Fiscal Years
2016 2015 2014
Employer Type of Operation Employees % Rank Employees % Rank Employees % Rank
Oak Hill Hospital Healthcare 2,036 3.20 1 1,156 1.84 2 1,136 1.93 1
Bayfront Regional Healthcare Healthcare 1,032 1.62 2 965 1.53 3 965 1.64 3
Walmart Distribution Center Distribution Center 1,020 1.60 3 1,200 1.91 1 1,020 1.73 2
HealthSouth Healthcare 355 0.56 4 288 0.46 4 288 0.49 4
Accuform Signs Inc Manufacturer 280 0.44 5 290 0.46 5 274 0.47 5
Cemex (formerly Rinker Materials/FCS) Manufacturer 250 0.39 6 240 0.38 6 240 0.41 6
HPH Hospice Healthcare 221 0.35 7 119 0.19 8 181 0.31 8
Sparton Electronics Manufacturer 219 0.34 8 200 0.32 7 215 0.37 7
Sun Trust Bank Service 110 0.17 9 85 0.14 9 85 0.14 9
Withlacoochee River Electric Coop Utility 80 0.13 10 79 0.13 10 80 0.14 10
Evergreen Woods Healthcare - - - - - - - - -
Alumi Guard Manufacturer - - - - - - - - -
Commercial Carrier Corp Trucking - - - - - - - - -
Cemex Manufacturer - - - - - - - - -
Totals 5,603 8.79 % 4,622 7.35 % 4,484 7.62 %
Total Employment 63,720 62,873 58,867
(a) Percentages shown represent the number of employees as a percent of Hernando County's total employment.
Source: Hernando County Office of Business Development. S - 21
Schedule 15
Hernando County, FloridaPrincipal Employers (a)
Non-retail, Non-government
Latest Fiscal Year compared to the Nine Prior Fiscal Years
Employer Type of Operation
Oak Hill Hospital Healthcare
Bayfront Regional Healthcare Healthcare
Walmart Distribution Center Distribution Center
HealthSouth Healthcare
Accuform Signs Inc Manufacturer
Cemex (formerly Rinker Materials/FCS) Manufacturer
HPH Hospice Healthcare
Sparton Electronics Manufacturer
Sun Trust Bank Service
Withlacoochee River Electric Coop Utility
Evergreen Woods Healthcare
Alumi Guard Manufacturer
Commercial Carrier Corp Trucking
Cemex Manufacturer
Totals
Total Employment
2013 2012 2011
Employees % Rank Employees % Rank Employees % Rank
1,089 1.71 1 1,070 1.70 1 950 1.51 2
913 1.44 3 1,018 1.62 2 1,032 1.64 1
1,020 1.60 2 1,008 1.60 3 900 1.43 3
355 0.56 4 272 0.43 6 125 0.20 9
280 0.44 5 280 0.45 5 247 0.39 5
250 0.39 6 288 0.46 4 288 0.46 4
221 0.35 7 221 0.35 7 170 0.27 6
219 0.34 8 180 0.29 8 159 0.25 7
110 0.17 9 105 0.17 10 105 0.17 10
80 0.13 10 - - - 77 0.12
- - 130 0.21 9 135 0.21 8
- - - - - - - - -
- - - - - - - - -
- - - - - - - - -
4,537 7.14 % 4,572 7.27 % 4,188 6.66 %
63,581 62,895 62,895
S - 22
Schedule 15
Hernando County, FloridaPrincipal Employers (a)
Non-retail, Non-government
Latest Fiscal Year compared to the Nine Prior Fiscal Years
Employer Type of Operation
Oak Hill Hospital Healthcare
Bayfront Regional Healthcare Healthcare
Walmart Distribution Center Distribution Center
HealthSouth Healthcare
Accuform Signs Inc Manufacturer
Cemex (formerly Rinker Materials/FCS) Manufacturer
HPH Hospice Healthcare
Sparton Electronics Manufacturer
Sun Trust Bank Service
Withlacoochee River Electric Coop Utility
Evergreen Woods Healthcare
Alumi Guard Manufacturer
Commercial Carrier Corp Trucking
Cemex Manufacturer
Totals
Total Employment
2010 2009 2008 2007
Employees % Rank Employees % Rank Employees % Rank Employees % Rank
947 1.49 2 900 1.43 1 900 1.40 2 896 1.43 2
1,032 1.62 3 763 1.22 3 763 1.19 3 763 1.22 3
1,200 1.89 1 900 1.43 1 1,044 1.62 1 1,500 2.40 1
125 0.20 9 - - - - - - - - -
245 0.39 5 245 0.39 5 245 0.38 6 200 0.32 7
264 0.42 4 300 0.48 4 300 0.47 5 300 0.48 6
207 0.33 - - - - - - - - -
225 0.35 6 225 0.36 6 325 0.51 4 325 0.52 4
135 0.21 8 113 0.18 8 113 0.18 8 308 0.50 5
100 0.16 10 - - - - - - - - -
160 0.25 7 140 0.22 7 140 0.22 7 160 0.26 8
- - - 100 0.16 9 100 0.16 9 - - -
- - - 100 0.16 9 100 0.16 9 145 0.23 9
- - - - - - - - - 126 0.20 10
4,640 7.31 % 3,786 6.03 % 4,030 6.29 % 4,723 7.36 %
63,511 62,747 64,355 62,510
S - 23
Schedule 16
Hernando County, FloridaCounty Government Employees by Function/Program
Last Ten Fiscal Years
2007 2008 2009 (b) 2010 2011
Function/Program
Governmental Activities:
General Government 306 297 271 238 243
Public Safety 504 507 362 368 471
Physical Environment 10 10 7 7 5
Transportation 108 97 99 99 79
Economic Environment 10 8 8 8 7
Human Services 30 35 32 25 20
Culture and Recreation 112 95 93 72 62
Courts 93 84 74 77 78
Business-type Activities:
Airport 5 5 5 5 5
Water and Wastewater 163 167 164 154 149
Business Development 67 43 34 31 29
Solid Waste 52 55 52 28 28
Total 1,460 1,403 1,201 1,112 1,176
(a) Source: Hernando County Department of Financial Services.
(b) Spring Hill Fire and Rescue District became an independent District in fiscal year 2009 and subsequently was dissolved
becoming dependent on the County on October 1, 2011.
(c) Increase is due to addition of jail employees to the Hernando County Sheriff department.
Fiscal Year
S-24
2012 (b) 2013 ( c) 2014 2015 2016
227 221 227 225 237
566 750 773 776 782
7 6 7 7 8
91 91 92 93 92
7 7 7 8 10
21 21 21 20 19
65 65 66 63 63
79 84 88 85 78
5 5 5 4 4
147 142 139 134 132
28 26 28 27 27
29 29 28 33 32
1,272 1,447 1,481 1,475 1,484
S - 25
Schedule 17
Hernando County, FloridaOperating Indicators by Function
Last Ten Fiscal Years
Function 2007 2008 2009 2010 2011
General GovernmentNumber of programs broadcast 342 310 299 207 212Number of employee records managed 994 1,091 785 683 645
Public SafetyTotal incidents responded to (HCFR) 15,013 13,895 14,234 14,020 14,076Number of emergency citizen volunteers 600 656 655 750 838Number of building permits issued 16,140 11,210 9,194 10,074 11,316
Physical EnvironmentExtension Classes/programs 30,756 40,993 30,480 27,015 20,055
TransportationNumber of signals maintained 84 88 83 86 80Number of lane miles of roads re-surfaced 80 129 61 199 70
Economic EnvironmentNumber of successful business projects 19 48 16 9 7Number of veteran clients served 29,860 33,590 32,719 21,955 6,681
Human ServicesAnimals impounded 6,557 6,659 5,773 5,117 4,256Number of human service requestsprocessed 18,797 19,723 25,513 27,043 13,256
Culture and RecreationRegistered library card holders 72,562 84,579 86,204 93,685 85,284Number of participants in the CountyRecreation programs 13,750 21,445 20,563 21,115 19,485
Court OperationsNumber of judicial cases managed 59,149 52,168 55,476 60,109 57,394
Water and SewerWater consumption in millions of gallons
a day 20.7 22.9 19.5 15.6 18.9Average number of water accounts 61,253 57,667 57,378 60,966 61,260Number of meter reads 742,571 719,043 688,536 749,652 752,244
Aviation OperationsNumber of airport & industrial park leases 146 146 145 178 173
Waste ManagementTotal tons landfilled 118,356 119,599 105,697 77,770 99,346Tons of Convenience CenterWaste Collected 7,780 5,975 7,244 7,012 7,681Tons of recyclables collected & processed 6,012 5,905 5,497 5,264 5,638
Source: Various County Departments.
Fiscal Year
S-26
2012 2013 2014 2015 2016
208 208 206 190 196859 745 772 771 782
22,868 27,222 26,254 28,951 30,496825 903 982 1,009 1,440
11,904 10,492 11,104 12,048 12,525
17,863 30,480 20,172 29,730 32,267
88 88 88 85 8564 32 36 42 39
8 7 9 8 823,540 6,857 6,918 7,916 8,909
3,578 3,095 2,923 2,950 2,725
23,540 8,288 9,099 10,789 6,285
90,623 97,642 102,910 109,366 116,994
19,185 13,799 17,955 20,045 22,049
65,520 63,060 64,290 53,796 51,869
18.4 17.1 16.8 16.7 17.761,363 56,975 57,376 58,251 58,281
736,400 737,748 740,748 719,986 751,440
140 140 141 138 133
104,281 103,733 114,370 117,230 122,259
15,701 7,317 6,161 6,945 7,8144,881 4,910 11,976 11,839 11,685
S - 27
Schedule 18
Hernando County, FloridaCapital Asset and Infrastructure Statistics by Function/Program
Last Ten Fiscal Years
Function/Program 2007 2008 2009 2010 2011
General GovernmentNumber of buildings 180 174 169 169 172Fleet Vehicles 488 453 434 405 395
Public SafetySheriff's patrol vehicles: 334 343 346 341 343Radio Towers 3 3 5 5 5
TransportationLane miles 2,305 2,332 2,345 2,364 2,371
Culture and RecreationPark acreage - developed 302 310 310 323 323Park acreage - undeveloped 1,540 1,230 1,230 1,206 1,206Trails-Jogging/Exercise/Nature 23 30 30 30 30Playgrounds 14 14 14 14 14Boat ramps (lanes) 16 16 16 16 16Picnic shelters 185 189 189 189 189Number of libraries/branches 6 6 6 6 6
Aviation OperationsNumber of runways 2 2 2 2 2Runways in linear feet 12,000 12,000 12,000 12,000 12,000Land (acres) 2,400 2,400 2,400 2,400 2,400
Waste ManagementVolume developed for landfill use (million
cubic yards) 2,846,689 3,189,269 3,337,115 6,601,544 6,601,544Remaining available landfill capacity
(cubic yards) 590,998 692,408 298,940 3,547,487 3,346,936
WaterTrans & dist lines (miles) 1,050 1,050 1,232 1,232 1,247Maximum daily storage capacity (million gallons) 10.25 10.25 17.72 15.58 19.46Number of meters in service 61,260 57,730 57,089 58,455 59,131
SewerNumber of pumping or lift stations 267 298 298 300 297Collection & Trans lines (miles) 388 421 465 465 486Reclaimed water trans & dist lines (miles) 0.38 0.38 2.90 2.00 4.30Number of manholes 6,133 6,462 6,732 6,732 6,946
(a) Source: Various County Departments.
Fiscal Year
S-28
2012 2013 2014 2015 2016
151 156 160 165 169370 403 423 403 378
336 336 324 325 3365 5 5 5 4
2,380 2,393 2,407 2,457 2,492
323 323 340 340 3401,206 1,206 1,206 1,206 1,206
30 30 30 30 3014 14 14 14 1416 16 16 16 16
189 189 190 190 1906 6 5 5 4
2 2 2 2 212,000 12,000 12,000 12,000 12,000
2,400 2,400 2,400 2,400 2,400
6,601,544 6,601,544 6,601,544 6,601,544 6,601,544
3,255,100 2,941,953 2,704,818 2,452,353 2,435,065
1,232 1,232 1,232 1,232 1,23220.90 20.90 19.08 19.08 19.78
61,290 56,805 57,376 58,251 58,281
298 298 301 301 301486 486 501 501 513
4.30 4.30 4.30 4.30 4.306,945 6,945 6,952 7,106 7,165
S - 29
COMPLIANCE SECTION
This section contains the following:
Single Audit Reports and Grant Compliance
Bond Compliance Information
Single Audit Reports and Grant Compliance
C-1
INDEPENDENT AUDITORS’ 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
Distinguished Members of the Board of County Commission Hernando County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Hernando County, Florida (the County) as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements, and have issued our report thereon dated March 24, 2017. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the County's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
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Distinguished Members of the Board of County Commission Hernando County, Florida
INDEPENDENT AUDITORS’ 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
(Concluded) Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. March 24, 2017 Sarasota, Florida
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INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY UNIFORM GUIDANCE AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
Distinguished Members of the Board of County Commission Hernando County, Florida Report on Compliance for Each Major Federal Program/State Project We have audited Hernando County, Florida (the County)’s compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement, and the requirements described in the Florida Department of Financial Services’ State Projects Compliance Supplement, that could have a direct and material effect on each of the County’s major federal programs and state projects for the year ended September 30, 2016. The County's major federal programs and state projects are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, the terms and conditions of its federal awards applicable to its federal programs and state projects. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of the County’s major federal programs and state projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and Chapter 10.550, Rules of the Auditor General. Those standards and Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program and state project. However, our audit does not provide a legal determination of the County's compliance.
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Distinguished Members of the Board of County Commission Hernando County, Florida
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
(Concluded) Opinion on Each Major Federal Program and State Project In our opinion, the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 2016. Report on Internal Control over Compliance Management of the County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the County's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program and state project to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and state project, and to test and report on internal control over compliance in accordance with Uniform Guidance and Chapter 10.550, Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program or state project that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of Uniform Guidance and Chapter 10.550, Rules of the Auditor General. Accordingly, this report is not suitable for any other purpose. March 24, 2017 Sarasota, Florida
HERNANDO COUNTY, FLORIDA
Schedule of Federal Awards and State Financial Assistance
Year Ended September 30, 2016
Grant Program Name
Direct
Recovery Act Community Development Block Grant (NSP3) 14.228 B-11-UN-12-0021 59,152$
Total DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 59,152$
Direct
FISH & WILDLIFE SERVICE
Refuge Revenue Sharing 15.659 -- 13,448$
Total DEPARTMENT OF THE INTERIOR 13,448$
Direct
State Criminal Alien Assistance Program (SCAAP) 16.606 2014-AP-BX-0827 1,726$
State Criminal Alien Assistance Program (SCAAP) 16.606 2015-AP-BX-0780 2,473
Subtotal CFDA 16.606 4,199$
Equitable Sharing Program 16.922 FL0270000 39,047$
Pass Through FLORIDA OFFICE OF ATTORNEY GENERAL
Crime Victim Assistance (VOCA) 16.575 V040-15009 35,584$
Pass Through FLORIDA DEPARTMENT OF CHILDREN & FAMILIES
STOP Violence Against Women 16.588 17-8015-LE-ENH 26,159$
STOP Violence Against Women 16.588 16-8015-LE-ENH 67,137
Subtotal CFDA 16.588 93,296$
Pass Through FLORIDA DEPARTMENT OF LAW ENFORCEMENT
Edward Byrne Memorial Justice Assistance Grant Program 16.738 2016-JAGC-HERN-2-H3-168 18,874$
Edward Byrne Memorial Justice Assistance Grant Program 16.738 2016-JAGC-HERN-2-H3-192 21,435
Edward Byrne Memorial Justice Assistance Grant Program 16.738 2013-DJ-BX-0915 1,978
Edward Byrne Memorial Justice Assistance Grant Program 16.738 2016-DJ-BX-0466 32,044
Subtotal CFDA 16.738 74,331$
Total DEPARTMENT OF JUSTICE 246,457$
DEPARTMENT OF TRANSPORTATIONDirect
Airport Improvement Program 20.106 3-12-0008-16-2013 7,514$
Airport Improvement Program 20.106 3-12-0008-018-2015 1,233,591
Airport Improvement Program 20.106 3-12-0008-019-2016 35,357
Subtotal CFDA 20.106 1,276,462$
Pass Through FLORIDA DEPARTMENT OF TRANSPORTATION
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 ARL24; FPN 427996 1 58/68 01 21,031$
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 ARL26; FPN 427996 5 58/68 01 2,742
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 ARR65; FPN 430586 1 58/68 01 41,039
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 ARR63; FPN 430582 1 58/68 01 432,916
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 ARR64; FPN 430584 1 58/68 01 197,020
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 ARR94; FPN 430583 1 38 01 3,319
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 G0318; FPN 433695 1 38 01 7,314
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 G0915; FPN 434499 1 38 01 14,612
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 G0996; FPN 430503 1 58/68 01 652
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 G0997; FPN 430504 1 58/68 01 461
Highway Planning & Construction- Federal Aid Highway Program (LAP) 20.205 G0D79; FPN 427996 3 38 01 1,046
Highway Planning & Construction- Federal Aid Highway Program (PL) 20.205 G0086; FPN 437264 1 18 01 179,495
Highway Planning & Construction- Federal Aid Highway Program (PL) 20.205 A9773; FPN 259209 1 14 16 313,016
Highway Planning & Construction- Federal Aid Highway Program (PL) 20.205 GOD09; FPN 439335 1 14 01 85,077
Subtotal CFDA 20.205 1,299,740$
DEPARTMENT OF JUSTICE
Federal/State/Pass Through Grantor CFDA /
CSFA #Grant ID Expenditures
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
DEPARTMENT OF THE INTERIOR
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HERNANDO COUNTY, FLORIDA
Schedule of Federal Awards and State Financial Assistance
Year Ended September 30, 2016
Grant Program Name
Federal/State/Pass Through Grantor CFDA /
CSFA #Grant ID Expenditures
Metropolitan Transportation Planning (Section 5305d) 20.505 ARA86; FPN 401983 1 14 14 4,877$
Metropolitan Transportation Planning (Section 5305d) 20.505 ARL23; FPN 401983 1 14 15 22,950
Subtotal CFDA 20.505 27,827$
Urbanized Area Formula Program (Section 5307) 20.507 FL-90-X794-00 17,466$
Urbanized Area Formula Program (Section 5307) 20.507 FL-90-X865-00 1,229,363
Urbanized Area Formula Program (Section 5307) 20.507 X015 291,927
Urbanized Area Formula Program (Section 5307) 20.507 X016 44,142
Subtotal CFDA 20.507 1,582,898$
Formula Grants for Rural Areas (Section 5311) 20.509 ART59; FPN 401982 1 84 15 112,200$
Total DEPARTMENT OF TRANSPORTATION 4,299,127$
ENVIRONMENTAL PROTECTION AGENCY
Pass Through FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION
Cleanwater State Revolving Funds (CWSRF) 66.458 WW270100 58,743$
Cleanwater State Revolving Funds (CWSRF) 66.458 WW270150 16,533,372
Subtotal CFDA 66.458 16,592,115$
Total ENVIRONMENTAL PROTECTION AGENCY 16,592,115$
DEPARTMENT OF HEALTH & HUMAN SERVICES
Pass Through FLORIDA DEPARTMENT OF REVENUE
Child Support Enforcement 93.563 COC27 391,871$
Child Support Enforcement 93.563 COC27 2,290
Subtotal CFDA 93.563 394,161$
Pass Through FLORIDA DEPARTMENT OF STATE- DIVISION OF ELECTIONS
HHS 2011 VOTE Program Grant 93.617 2015-2016-0004-HER 4,808$
Total DEPARTMENT OF HEALTH & HUMAN SERVICES 398,969$
DEPARTMENT OF HOMELAND SECURITY
Pass Through FLORIDA DIVISION OF EMERGENCY MANAGEMENT
Hazard Mitigation Grant 97.039 14HM-6B-05-37-01-465 10,011$
Emergency Management Performance Grant 97.042 16FG-5A-05-37-01-093 78,569$
Emergency Management Performance Grant 97.042 16CI-S9-05-37-02-406 9,158
Emergency Management Performance Grant 97.042 16CC-S9-05-37-02-405 9,158
Emergency Management Performance Grant 97.042 17-FG-P9-05-37-01-100 663
Subtotal CFDA 97.042 97,548$
Homeland Security Grant Program 97.067 15DS-P4-05-37-01-373 20,000$
Total DEPARTMENT OF HOMELAND SECURITY 127,559$
TOTAL EXPENDITURES OF FEDERAL AWARDS 21,736,827$
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HERNANDO COUNTY, FLORIDA
Schedule of Federal Awards and State Financial Assistance
Year Ended September 30, 2016
Grant Program Name
Federal/State/Pass Through Grantor CFDA /
CSFA #Grant ID Expenditures
FLORIDA EXECUTIVE OFFICE OF THE GOVERNOR
Emergency Management Program (EMPA) 31.063 16-BG-83-05-37-01-026 99,821$
Emergency Management Program (EMPA) 31.063 17-BG-83-05-37-01-033 15,262
Subtotal CSFA 31.063 115,083$
Total FLORIDA EXECUTIVE OFFICE OF THE GOVERNOR 115,083$
FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY
Visit Florida 40.006 5150 654$
Total FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY 654$
FLORIDA HOUSING FINANCE CORPORATION
State Housing Initiatives Program (SHIP) 40.901 SHIP FY14/15 316,358$
State Housing Initiatives Program (SHIP) 40.901 SHIP FY15/16 958,085
1,274,443$
Total FLORIDA HOUSING FINANCE CORPORATION 1,274,443$
FLORIDA DEPARTMENT ARGICULTURE & CONSUMER SERVICES
Mosquito Control 42.003 022242 30,292$
Total FLORIDA DEPARTMENT ARGICULTURE & CONSUMER SERVICES 30,292$
FLORIDA DEPARTMENT OF STATE
State Aid to Libraries 45.030 14-ST-19 59,878$
State Aid to Libraries 45.030 15-ST-19 82,216
State Aid to Libraries 45.030 16-ST-19 76,693
Subtotal CSFA 45.030 218,787$
Total FLORIDA DEPARTMENT OF STATE 218,787$
FLORIDA DEPARTMENT OF TRANSPORTATION
Commission for Transportation Disadvantaged Planning Grant 55.002 GO271 14,203$
Commission for Transportation Disadvantaged Planning Grant 55.002 GOC50 2,147
Subtotal CSFA 55.002 16,350$
Aviation Development Grants 55.004 AQU75; FPN 42410419401 570,000$
Aviation Development Grants 55.004 APF09; FPN 41577819401 617,782
Aviation Development Grants 55.004 AQV71; FPN 42410429401 891
Aviation Development Grants 55.004 AQ176; FPN 42069919411 50,573
Aviation Development Grants 55.004 ARD41; FPN 42592429401 3,910
Aviation Development Grants 55.004 ARD13; FPN 42592419401 16,167
Aviation Development Grants 55.004 G0003; FPN 43299219401 93,400
Aviation Development Grants 55.004 G0006; FPN 43755019401 169,832
Aviation Development Grants 55.004 G0382; FPN 43749919401 26,436
Subtotal CSFA 55.004 1,548,991$
Public Transit Block Program 55.010 AR951; FPN 40810418414 83,209$
Public Transit Block Program 55.010 ART63; FPN 40810418415 125,117
Subtotal CSFA 55.010 208,326$
Public Transit Service Development Program 55.012 G0692; FPN 40198238416 112,604$
Transit Corridor Program 55.013 ARA86; FPN 401983-1-14-14 610$
Transit Corridor Program 55.013 ARL23; FPN 401983-1-14-15 2,869
Subtotal CSFA 55.013 3,479$
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HERNANDO COUNTY, FLORIDA
Schedule of Federal Awards and State Financial Assistance
Year Ended September 30, 2016
Grant Program Name
Federal/State/Pass Through Grantor CFDA /
CSFA #Grant ID Expenditures
NPDES/TMDL Stormwater Retrofit Project 55.024 AQX46; FPN 421748 1 72 06 6,196$
Total FLORIDA DEPARTMENT OF TRANSPORTATION 1,895,946$
FLORIDA DEPARTMENT OF HEALTH
County Grant Awards (EMS) 64.005 C4027 35,693$
Total FLORIDA DEPARTMENT OF HEALTH 35,693$
FLORIDA FISH & WILDLIFE CONSERVATION COMMISSION
Artificial Reef Grants Program 77.007 FWC-14017 87$
Total FLORIDA FISH & WILDLIFE CONSERVATION COMMISSION 87$
TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE 3,570,985$
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HERNANDO COUNTY, FLORIDA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
Note 1 - General The accounting policies and presentation of the accompanying schedule of expenditures of federal
awards and state financial assistance of Hernando County, Florida (the County) have been designed to conform with generally accepted accounting principles applicable to governmental units, including the reporting and compliance requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (federal awards), and Chapter 10.550, Rules of the Auditor General of the State of Florida.
The County reporting entity is defined in Note A to the County's basic financial statements for the
year ended September 30, 2016. All federal awards and state financial assistance received directly from federal or state agencies, as well as federal awards and state financial assistance passed through other governmental agencies, are included in the schedule.
Note 2 - Basis of Accounting The accompanying schedule of expenditures of federal awards and state financial assistance is
presented using the same basis of accounting as the fund in which the grant is recorded, generally the accrual or modified accrual basis, as described in Note A to the County's financial statements.
Note 3 - Loans Outstanding The County has the following loan balances outstanding at September 30, 2016: CSFA Loan Program Number Outstanding State Housing Initiatives Partnership 40.901 $ 13,445,863 Only current year loans issued to eligible recipients are included as expenditures on the
accompanying schedule. Note 4 - Contingencies
Grant monies received and disbursed by the County are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to the disallowance of expenditures. Based upon prior experience, the County does not believe that such disallowances, if any, would have a material effect on the financial position of the County.
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HERNANDO COUNTY, FLORIDA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
(Concluded) Note 5 - Other Matters
Program income generated by and expended on a Federal or State award during the period of performance is only included on the Schedule of Expenditures of Federal Awards and State Financial Assistance if the program income is added to the award amount or if specifically directed by the awarding agency and/or required by program guidance. Program income that is expended by reducing the total program expenditures (deduction method) is not included on this schedule.
In accordance with the direction from the grantor, program income totaling $26,756 was
expended on the Community Development Block Grant (CFDA 14.228) during 2016, and is included in the total expended amount recorded on the Schedule of Expenditures of Federal Awards and State Financial Assistance.
In accordance with the direction from the grantor, program income totaling $4,586 was expended on the Justice Assistance Grant (CFDA 16.738) during 2016, and is included in the total expended amount recorded on the Schedule of Expenditures of Federal Awards and State Financial Assistance.
In accordance with the terms of the grant, program income generated during 2016 totaled
$174,230, and was used to reduce the program expenditures for the Urbanized Area Formula Program (CFDA 20.507), Formula Grants for Rural Areas (CFDA 20.509), Public Transit Block Program (CSFA 55.010), and Public Transit Service Development Program (CSFA 55.012). These associated expenditures are not reported on the Schedule of Expenditures of Federal Awards and State Financial Assistance.
In accordance with the terms of the grant, program income received in the State Housing
Initiative Partnership (SHIP) program (CSFA 40.901) during 2016, is added to the original award amount in the corresponding year the program income was earned. Expense of this program income may not occur until subsequent fiscal years.
Under the pre-award authorization for the Urbanized Area Formula Program (CFDA 20.507)—Section 5307, expenditures were incurred during the fiscal year, but not expected to be reimbursed until a later fiscal year when the award is granted, are included on the Schedule of Expenditures of Federal Awards and State Financial Assistance. The granting agency, Federal Transit Administration (FTA), has not assigned a final unique grant/project number, so “X015” ($291,927) and “X016” ($44,142) are currently being used. Hernando County Board of County Commissioners did not elect to use the 10% de minimis cost rate in 2016 as covered in 2 CFR 200.414.
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HERNANDO COUNTY, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FEDERAL AWARD PROGRAMS AND STATE FINANCIAL ASSISTANCE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
PART A - SUMMARY OF AUDITORS’ RESULTS 1. The independent auditors’ report expresses unmodified opinions on the financial
statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Hernando County, Florida (the County) as of and for the year ended September 30, 2016, which collectively comprise the County’s basic financial statements.
2. No material weaknesses or significant deficiencies in the internal control over financial
reporting were disclosed during the audit of the basic financial statements (see Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards).
3. No instances of noncompliance material to the financial statements of the County were
disclosed during the audit (see the same report referenced in 2). 4. No material weaknesses or significant deficiencies in internal control over major federal
awards programs or major state financial assistance projects were disclosed (see Independent Auditors’ Report on Compliance for each Major Federal Program and State Project and on Internal Control Over Compliance Required by Uniform Guidance and Chapter 10.550, Rules of the Auditor General).
5. An unqualified opinion was issued on compliance over major federal programs and major
state projects (see the same report referenced in 4). 6. Audit findings relative to the major federal award programs for the County are reported in
Part C of this schedule. Audit findings relative to the major state financial assistance projects are reported in Part D of this schedule.
7. The programs/projects tested as major programs/projects included the following:
■ Major Federal Programs U.S Department of Transportation:
● Airport Improvement Program, CFDA No. 20.106 U.S. Department of Transportation, Passed Through Florida Department of
Transportation: ● Federal-Aid Highway Program, CFDA No. 20.205
Environmental Protection Agency, Passed Through Florida Department of
Environmental Protection: ● Clean Water State Revolving Fund, CFDA No. 66.458
U. S. Department of Health and Human Services, Passed Through Florida Department of Revenue: ● Child Support Enforcement, CFDA No. 93.563
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HERNANDO COUNTY, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FEDERAL AWARD PROGRAMS AND STATE FINANCIAL ASSISTANCE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
(Concluded) PART A - SUMMARY OF AUDITORS’ RESULTS (Concluded)
7. (Concluded)
■ Major State Projects Florida Department of Transportation:
● Aviation Development Grants, CSFA No. 55.004 ● Public Transit Block Grant Program, CSFA No. 55.010 ● Public Transit Service Development Program, CSFA No. 55.012
8. The threshold for distinguishing Type A and Type B programs/projects was $750,000 for major federal award programs and $750,000 for major state financial assistance projects.
9. The County did qualify as a low-risk auditee per criteria set forth in Section .520 of the
Uniform Guidance.
PART B - FINDINGS - FINANCIAL STATEMENT AUDIT None PART C - FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS None PART D - FINDINGS AND QUESTIONED COSTS - MAJOR STATE FINANCIAL ASSISTANCE
PROJECTS None PART E - OTHER ISSUES No summary schedule of prior audit findings is required because there were no prior audit
findings related to federal programs or state projects. No corrective action plan is required because there were no current year findings required to
be reported under the Federal or Florida Single Audit Acts.
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MANAGEMENT LETTER Distinguished Members of the Board of County Commission Hernando County, Florida Report on the Financial Statements We have audited the financial statements of Hernando County, Florida (the County) as of and for the year ended September 30, 2016, and have issued our report thereon dated March 24, 2017. Auditors’ Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance); and Chapter 10.550, Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditors’ 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; Independent Auditors’ Report on Compliance for Each Major Federal Program and State Project and on Internal Control over Compliance required by the Uniform Guidance and Chapter 10.550, Rules of the Auditor General; Schedule of Findings and Questioned Costs; and our Independent Accountants’ Report on Compliance with Section 218.415, Florida Statutes. Disclosures in those reports and schedule, which are all dated March 24, 2017, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The County has disclosed this information in the notes to the financial statements.
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Distinguished Members of the Board of County Commission Hernando County, Florida
MANAGEMENT LETTER (Continued)
Financial Condition Sections 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether or not the County has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the County did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management’s responsibility to monitor the County’s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Annual Financial Report Sections 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether the annual financial report for the County for the fiscal year ended September 30, 2016, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2016. In connection with our audit, we determined that these two reports were in agreement. Special District Component Units Section 10.554(1)(i)5.d, Rules of the Auditor General, requires that we determine whether or not a special district that is a component unit of the County provided the financial information necessary for proper reporting of the component unit within the audited financial statements of the County in accordance with Section 218.39(3)(b), Florida Statutes. In connection with our audit, we determined that all special district component units provided the necessary information for proper reporting in accordance with Section 218.39(3)(b), Florida Statutes. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of the Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Distinguished Members of the Hernando County, Florida, Board of County Commission, and applicable management, and is not intended to be, and should not be, used by anyone other than these specified parties.
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Distinguished Members of the Board of County Commission Hernando County, Florida
MANAGEMENT LETTER (Concluded)
We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of the audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. March 24, 2017 Sarasota, Florida
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INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES
Distinguished Members of the Board of County Commission Hernando County, Florida We have examined Hernando County, Florida (the County)’s compliance with the requirements of Section 218.415, Florida Statutes, as of and for the year ended September 30, 2016, as required by Section 10.556(10)(a), Rules of the Auditor General with regards to the County’s investments during the year ended September 30, 2016. Management is responsible for the County’s compliance with those requirements. Our responsibility is to express an opinion on the County’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the County’s compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the County’s compliance with specified requirements. In our opinion, the County complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Distinguished Members of the Board of County Commission, and applicable management, and is not intended to be, and should not be, used by anyone other than these specified parties. March 24, 2017 Sarasota, Florida
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INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE WITH SECTION 365.172(10), FLORIDA STATUTES
Distinguished Members of the Board of County Commission Hernando County, Florida We have examined Hernando County, Florida (the County)’s compliance with the requirements of Section 365.172(10), Florida Statutes, as of and for the year ended September 30, 2016, as required by Section 10.556(10)(b), Rules of the Auditor General with regards to the use of the County’s E911 funds. Management is responsible for the County’s compliance with those requirements. Our responsibility is to express an opinion on the County’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the County’s compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the County’s compliance with specified requirements. In our opinion, the County complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Distinguished Members of the Board of County Commission, and applicable management, and is not intended to be, and should not be, used by anyone other than these specified parties. March 24, 2017 Sarasota, Florida
Bond Compliance
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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BOND COMPLIANCE INFORMATION
CAPITAL IMPROVEMENT AND REFUNDING REVENUE BONDS, SERIES 2004
HISTORICAL COLLECTIONS OF STATE SALES TAXLAST TEN FISCAL YEARS
The following table sets forth data regarding the collection of overall State Sales Tax and theannual percentage increases for the State of Florida and for Hernando County, Florida.
State Fiscal YearEnded June 30 State of Florida
%Change Hernando County
%Change
2007 21,750,646,000 (0.29) 102,017,532 (0.35)
2008 20,569,094,349 (5.43) 94,967,233 (6.91)
2009 17,368,889,418 (15.60) 79,335,172 (16.50)
2010 16,768,646,720 (3.46) 79,707,979 0.47
2011 17,575,218,111 4.81 81,297,441 1.99
2012 18,487,539,555 5.10 82,488,028 1.46
2013 19,657,996,927 6.33 85,819,584 4.04
2014 21,097,421,292 7.32 90,149,675 5.05
2015 22,833,522,335 8.23 98,203,183 8.93
2016 24,089,395,925 5.50 104,492,643 6.40Source: Department of Revenue
PERCENTAGE DISTRIBUTION OF HALF-CENT SALES TAX REVENUEFOR HERNANDO COUNTY AND THE CITY OF BROOKSVILLE (1)
The following table sets forth the respective percentage distribution of the State of Florida Half-Cent Sales Tax Revenues to Hernando County, Florida and to the City of Brooksville, Florida forthe last ten State fiscal years.
State Fiscal YearEnded June 30 Hernando County City of Brooksville
2007 95.26 4.742008 95.42 4.582009 95.57 4.432010 95.52 4.482011 95.50 4.502012 95.70 4.302013 95.70 4.302014 95.70 4.302015 95.70 4.302016 95.70 4.30
(1) The City of Weeki Wachee receives an immaterial percentage of the State of Florida Half-Cent SalesTax Revenues for Hernando County. The percentage is so small that it is not included in this table.
(2) Percentages are estimated based on data provided by the Florida Department of Revenue.
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
C-19
RECEIPT OF HALF-CENT SALES TAX REVENUESBY HERNANDO COUNTY, FLORIDA
The historical State of Florida Half-Cent Sales Tax Revenues received by Hernando County,Florida during the last ten fiscal years are set forth in the table below.
Fiscal Year Sales Tax Revenues % Change
2007 8,228,307 (4.22)2008 7,631,497 (7.25)2009 7,098,139 (6.99)2010 7,153,868 0.792011 7,231,814 1.092012 7,354,197 1.692013 7,607,684 3.452014 8,000,302 4.912015 8,646,879 8.082016 9,098,938 5.23
WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2013A
HISTORIC GROWTH OF WATER AND WASTEWATER SYSTEM CUSTOMERS
The following table sets forth data regarding the Historic Growth of Water and WastewaterSystem Customers for the last ten fiscal years for Hernando County, Florida:
Number of Active Accounts (1)Fiscal Year Water Sewer
2007 60,509 28,1142008 57,667 27,3662009 57,089 27,0142010 56,962 26,9092011 56,597 26,7572012 56,777 26,8112013 56,975 26,8972014 57,376 27,1272015 58,251 27,6882016 58,281 27,688
(1) Figures represent number of active accounts at the close of each Fiscal Year ended September 30.
Source: Hernando County Utilities Department
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
C-20
HISTORIC WATER CONSUMPTION FLOWS
The following table sets forth data regarding the Historic Water Consumption Flows for the lastten fiscal years for Hernando County, Florida:
Fiscal Average Daily Peak DayYear Flow (MGD) Flow (MGD)
2007 23.995 38.5382008 22.879 38.9682009 19.543 29.6432010 19.832 40.9082011 18.902 28.9452012 18.380 25.1372013 17.088 24.9992014 16.762 24.4262015 16.725 23.9572016 17.707 24.664
Source: Hernando County Utilities Department
HISTORIC WASTEWATER TREATMENT PLANT FLOWS
The following table sets forth data regarding the Historic Wastewater Treatment Plant Flows forthe last ten fiscal years for Hernando County, Florida:
FiscalYear
Average DailyFlow (MGD)
2007 3.8692008 3.6442009 3.8172010 3.8272011 3.6922012 3.9662013 3.9782014 4.1282015 4.1912016 4.470
Source: Hernando County Utilities Department
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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COUNTY SYSTEM RATESMonthly Water Rates
As of September 30, 2016Residential
Minimum Monthly Billing Charge:All Meter Sizes $ 6.69
Consumption Charge (Per 1,000 Gallons)0-5000 $ 1.25
5,001-10,000 1.4710,001-20,000 2.2020,001-30,000 2.9630,001-50,000 4.4250,001-75,000 7.36Above 75,000 14.72
CommercialMinimum Monthly Billing Charge:
Per ERU $ 6.69Consumption Charge (Per 1,000 Gallons)
0-10,000 $ 1.4710,001-20,000 2.2020,001-30,000 2.9630,001-50,000 4.4250,001-75,000 7.36Above 75,000 14.72
IrrigationMinimum Monthly Billing Charge:
Per ERU $ 6.69Consumption Charge (Per 1,000 Gallons)
0-10,000 $ 1.4710,001-20,000 2.2020,001-30,000 2.9630,001-50,000 4.4250,001-75,000 7.36Above 75,000 14.72
ResidentialMinimum Monthly Billing Charge (per Account) $ 17.86Consumption Charge (Per 1,000 Gallons) 3.85
(Capped at 10,000 Gallons per Month)
CommercialMinimum Monthly Billing Charge (per ERU) $ 17.86Consumption Charge (Per 1,000 Gallons) 3.85
1) Amounts shown to be applied on a per ERU basis.Source: Hernando County Utilities Department
HERNANDO COUNTY, FLORIDA SUPPLEMENTAL INFORMATION
September 30, 2016 (UNAUDITED)
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COUNTY SYSTEM RATES (CONTINUED)
Connection Fee ERU
Set forth below is a table which summarizes the water and wastewater system Connection Fees for each respective meter size for the last five fiscal years: 2012 2013 2014 2015 2016
Meter
Size
ERU Meter Facto
r Water Sewer Water Sewer Water Sewer Water Sewer Water Sewer
5/8 1 $ 1,147 $ 3,544 $ 1,147 $ 3,544 $ 1,147 $ 3,544 $ 1,147 $ 3,544 $ 1,147 $ 3,544
3/4 1.5 1,721 5,316 1,721 5,316 1,721 5,316 1,721 5,316 1,721 5,316
1 2.5 2,868 8,860 2,868 8,860 2,868 8,860 2,867 8,860 2,867 8,860
1 1/2 5 5,735 17,720 5,735 17,720 5,735 17,720 5,735 17,720 5,735 17,720
2 8 9,176 28,352 9,176 28,352 9,176 28,352 9,176 28,352 9,176 28,352
3 16 18,352 56,704 18,352 56,704 18,352 56,704 18,352 56,704 18,352 56,704
4 25 28,675 88,600 28,675 88,600 28,675 88,600 28,675 88,600 28,675 88,600
6 50 57,350 177,200 57,350 177,200 57,350 177,200 57,350 177,200 57,350 177,200
8 80 91,760 283,520 91,760 283,520 91,760 283,520 91,760 283,520 91,760 283,520
10 115 131,905 407,560 131,905 407,560 131,905 407,560 131,905 407,506 131,905 407,506
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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COUNTY SYSTEM RATES (CONTINUED)
Other County System Rates and Charges
The County has several other charges that are applicable to miscellaneous or customer-requested services. Set forth in the table below is a summaryof other miscellaneous charges imposed by the County that are common in the utility industry, for the last five fiscal years.
Charges/Fee Descriptions 2012 2013 2014 2015 2016
Water Hook-up Fees:
Meter Size:
5/8" x 3/4" Water Meter $ 250 $ 250 $ 250 $ 250 $ 250
5/8" x 3/4" Water Meter Short/Long Tap-In 350 350 350 350 350
1" Water Meter 750 750 750 750 750
1 1/2" Water Meter 1,170 1,170 1,170 1,170 1,170
2" Water Meter 1,400 1,400 1,400 1,400 1,400
3" Compound Water Meter Contracted Contracted Contracted Contracted Contracted
4" Compound Water Meter Contracted Contracted Contracted Contracted Contracted
6" Compound Water Meter Contracted Contracted Contracted Contracted Contracted
8" Compound Water Meter Contracted Contracted Contracted Contracted Contracted
Wastewater Hook-Up Fee:
Residential N/A N/A N/A N/A N/A
Commercial N/A N/A N/A N/A N/A
Utility Service Fee:
Workdays - 8:00 a.m. to 5:00 p.m. $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00
After 5:00 p.m., Weekends, Holidays 70.00 70.00 70.00 70.00 70.00
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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The following two tables set forth a summary of the Hernando County Water and Sewer Capital Improvements and Funding Sources forthe next five years.
FIVE-YEAR CAPITAL IMPROVEMENTS PROGRAM
Fiscal Year Ending September 30,
2017 2018 2019 2020 2021 Total
WATER SYSTEM
Water Production $ - $ 500,000 $ 300,000 $ - $ - $ 800,000
Water Distribution/Storage 2,559,058 800,000 2,430,216 1,830,216 700,000 8,319,490
Water Decommission - - - 54,636 1,181,784 1,236,420
Total Water Systems 2,559,058 1,300,000 2,730,216 1,884,852 1,881,784 10,355,910
WASTEWATER SYSTEM
Treatment and Effluent Disposal 1,583,000 - - - - 1,583,000
Reclaimed Water Facilities 6,000,000 6,000,000 - - - 12,000,000
W.W. Collection/Effluent Transmission 3,032,423 975,000 1,025,000 1,025,000 175,000 6,232,423
Total Wastewater System 10,615,423 6,975,000 1,025,000 1,025,000 175,000 19,815,423
TOTAL – Water & Wastewater System $ 13,174,481 $ 8,275,000 $ 3,755,216 $ 2,909,852 $ 2,056,784 $ 30,171,333
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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FUNDING SOURCES FOR FIVE-YEAR WATER AND SEWER CAPITAL IMPROVEMENTS PROGRAM
Fiscal Year Ending September 30,
FUNDING SOURCES 2017 2018 2019 2020 2021 Total
WATER SYSTEM
Proceeds from issuance of debt & StateRevolving Loan Proceeds $ - $ - $ - $ - $ - $ -
Capital Reserves 1,993,000 600,000 900,000 - - 3,493,000
Renewal & Replacement Fund 482,625 700,000 700,000 700,000 700,000 3,2825,625
Connection Fees 83,433 - 1,130,216 1,130,216 - 2,343,865
Operating Reserves - - - 54,636 1,181,784 1,236,420
Total Water System 2,559,058 1,300,000 2,730,216 1,884,852 1,881,784 10,355,910
WASTEWATER SYSTEM
Proceeds from issuance of debt & StateRevolving Loan Proceeds - - - - - -
Capital Reserves 4,301,000 1,500,000 - - - 5,801,000
Renewal & Replacement Fund 1,683,000 975,000 175,000 175,000 175,000 3,183,000
Connection Fees 131,423 - 850,000 850,000 - 1,831,423
Other Funding Sources 4,500,000 4,500,000 - - - 9,000,000
Total Wastewater System 10,615,423 6,975,000 1,025,000 1,025,000 175,000 19,815,423
TOTAL – Water & Wastewater System $ 13,174,481 $ 8,275,000 $ 3,755,216 $ 2,909,852 $ 2,056,784 $ 30,171,333
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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HISTORICAL OPERATING RESULTS AND DEBT SERVICE COVERAGE-COUNTY SYSTEM
The following table shows certain historical operating data for the Water and Sewer System for the last five fiscal years. Presentation of such figuresis intended to reflect the provisions of the Resolution. The historical figures are derived from the County’s audited financial statements.
Fiscal Year Ending September 30,2012 2013 2014 2015 2016
Water & Wastewater Sales Revenues $ 24,192,129 $ 25,241,583 $ 26,555,419 $ 28,251,427 $ 31,061,648Other Operating Revenues 391,513 318,425 413,874 454,335 501,088Interest Income 310,588 62,792 300,214 383,392 362,002Total Gross Revenues (1) 24,894,230 25,622,800 27,269,507 29,089,154 31,924,738Operating Expenses: (2)
Personal Services 7,422,585 6,950,981 7,338,481 7,388,867 8,116,910Other Operating Expenses 8,940,837 8,350,666 8,559,089 9,002,832 9,857,776Depreciation Equivalent Charges (3) (277,508) (275,374) (280,955) (329,876) (169,459)
Total Operating Expenses 16,085,914 15,026,273 15,616,615 16,061,823 17,805,227
Net Revenues (4) 8,808,316 10,596,527 11,652,892 13,027,331 14,119,511
Connection Fees:Water Connection Fees 189,508 252,476 390,692 439,996 644,833Wastewater Connection Fees 348,780 541,610 988,048 944,020 1,532,964
Total Connection Fees 538,288 794,086 1,378,740 1,384,016 2,177,797
Pledged Funds (5) 9,346,604 11,390,613 13,031,632 14,411,347 16,297,308
Actual Senior Lien Debt Service $ 4,037,493 $ 4,041,262 $ 3,540,182 $ 3,802,294 $ 3,800,334
Actual Coverage on Net Revenues (6) 2.18 2.62 3.29 3.43 3.72Required Coverage 1.00 1.00 1.00 1.00 1.00
Actual Coverage on Pledged Funds (6) 2.32 2.82 3.68 3.79 4.29Required Coverage 1.10 1.10 1.10 1.10 1.10
(1) Pursuant to the Resolution, does not include Sewer Connection Fees, Water Connection Fees or Special Assessment Proceeds.(2) Pursuant to the Resolution, does not include amortization or depreciation.(3) For purposes of this table, charges associated with replacement of vehicles in lieu of depreciation have been eliminated. This is consistent with definition of Operating Expenses in the Resolution, which
excludes depreciation, amortization and other similar charges.(4) Net revenues are defined in the Resolution as Gross Revenues less Operating Expenses.
(5) Pledged Revenues are defined in the Resolution as Net Revenues plus Connection Fees, together with certain other funds and accounts which are accounted for in this table.(6) The Series 1998 Bonds were refunded with Non-Ad Valorem Refunding Revenue Bonds, Series 2010. The Pledge for the 2010 bonds is from non-ad valorem revenues, not from revenue of the water and
sewer system, and is therefore not a legal obligation of the water and sewer system. For purposes of this report, however, we have included the portion of debt service attributed to the water and sewerfund. If the Non-Ad Valorem Bond debt service were not included in the calculation, the coverage for each of the Net Revenues and Pledged Funds would increase by 0.62 and the Pledged Funds wouldincrease by 0.71.
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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TOP TEN UTILITY CUSTOMERS (BASED ON SALES REVENUE)
The following table shows the ten largest customers of Hernando County for fiscal year ending September 30, 2016:
Customer Class Meter Size Type of Service System Revenue
% of TotalCounty
Sales Revenue
Hernando County School Board Commercial 3”-6” Water & Sewer 229,540 0.7%
Oak Hill Hospital Commercial 6” Water & Sewer $ 152,301 0.5%
Oak Hill Hospital Cooling Tower Commercial 2” Water 106,953 0.3%
Hernando Correctional Institution Commercial 6” Water & Sewer 105,196 0.3%
Hernando County Jail Commercial 6” Water & Sewer 97,965 0.3%
Brooksville Regional Hospital Commercial 6” Water & Sewer 93,145 0.3%
Bridgewater Club Apartments Commercial 6” Water & Sewer 87,901 0.3%
Atria Evergreen Woods Commercial 4” Water & Sewer 47,864 0.2%
Evergreen Woods Commercial 4” Water & Sewer 37,807 0.1%
Spring Hill Hospital Cooling Tower Commercial 2” Water 36,916 0.1%
Total $ 995,588
Source: Hernando County Utilities Department.
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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NON-AD VALOREM REFUNDING REVENUE BONDS, SERIES 2010
The following table represents the County’s determination of non-ad valorem revenues for the lastsix years (excludes non-ad valorem revenues of the County which are not legally available to paydebt service on the Series 2010 Bonds). Certain of such revenue may heretofore or hereinafter bespecifically pledged to secure other indebtedness by the County. Any such debt would be payablefrom such specific revenue sources prior to payment of debt service on the Series 2010 Bonds.Such table is not intended to represent revenues of the County which would necessarily beavailable to pay debt service on the Series 2010 Bonds; however, they are an indication of therelative amounts of non-ad valorem revenues of the County which may be available for thepayment of principal and interest on the Series 2010 Bonds taking into account generalgovernment expenditures. Certain categories may cease to exist altogether and new sources maycome about from time to time.
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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HISTORICAL NON-AD VALOREM REVENUES IN GENERAL FUND (1)
Fiscal Year Ending September 30,
2011 2012 2013 2014 2015 2016
RevenuesTaxes:
Local Communications Services Tax $ 1,504,949 $ 1,449,390 $ 1,435,395 $ 1,633,894 $ 1,786,365 $ 1,725,437
Licenses and Permits:Other 84,855 114,792 25,045 29,280 326,210 363,882
Intergovernmental:Local Governmental Half-Cent Sales Tax (2) 7,231,814 7,354,197 7,607,684 8,000,302 8,646,879 9,098,938State Revenue Sharing 3,398,058 3,653,304 3,837,535 4,063,333 4,392,492 4,519,219Other (3) 6,333,825 5,214,191 4,442,909 3,324,724 4,082,022 6,225,361
Charges for Services:General Government 6,115,380 6,186,098 6,333,203 7,227,029 9,389,625 7,642,009Public Safety 900,651 1,446,821 1,435,883 1,569,743 1,792,748 1,668,836Physical Environment - 13,535 14,387 46,486 170,986 308,890Transportation 124,650 105,383 153,139 146,528 164,232 174,220Human Services 184,711 166,362 205,263 215,707 212,236 225,273Recreation and Culture 653,264 720,273 696,200 716,081 687,864 746,590Other 17,188 18,867 16,997 16,414 30,890 25,368
Fines and Forfeitures 81,279 72,890 80,083 94,522 87,637 76,420Interest Income 199,819 439,913 (50,679) 311,288 358,184 402,933Miscellaneous Revenue 4,391,048 4,856,984 1,854,816 6,813,485 1,740,723 1,507,647
Total Sources of Non-Ad Valorem Revenues $ 31,221,491 $ 31,813,000 $ 28,087,860 $ 34,208,816 $ 33,869,093 $ 34,711,023
(1) Includes non-ad valorem revenues in General Fund only.(2) This revenue source is pledged as the source of security for the Capital Improvement and Refunding Revenue Bonds, Series 2004, and parity bonds issued in the future, and this revenue source will only be
available as a source for payment for the Series 2010 Bonds, Non-Ad Valorem Refunding Revenue Note, Series 2012, and the Non-Revolving Lines of Credit after the satisfaction of such debt service paymentobligations.
(3) Increases/decreases predominantly due to changes in grant funding provided by other governmental agencies.
(4) Increase in fiscal year ending 2011 due to $3,000,000 new hospital lease agreement.
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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OTHER OBLIGATIONS PAYABLE FROM NON-AD VALOREM REVENUES
The County has other debt issues outstanding which are secured by and payable from specific non-advalorem revenues (excluding gas taxes and net revenues of the water and sewer enterprise fund, neither ofwhich are legally available to pay debt service on the Series 2010 Bonds). Such indebtedness is summarizedbelow.
DescriptionSource ofSecurity
AmountOutstanding (1)
FinalMaturity
MaximumAnnual Debt
Service
Non-Revolving Line ofCredit
Covenant toBudget andAppropriate
Legally AvailableNon-Ad Valorem
Revenues
$ 9,211,945 05/01/2029 $ 3,328,779
Non-Ad ValoremRefunding RevenueBonds, Series 2010
Covenant toBudget andAppropriate
Legally AvailableNon-Ad Valorem
Revenues
$ 3,015,000 02/01/2024 $ 1,209,806
Capital Improvementand RefundingRevenue Bonds,Series 2004
Half-Cent SalesTax
$ 935,000 02/01/2017 $ 951,363
Non-Ad ValoremRefunding RevenueNote, Series 2012
Covenant toBudget andAppropriate
Legally AvailableNon-Ad Valorem
Revenues
$ 22,583,000 02/01/2028 $ 3,159,419
$ 35,744,945 $ 8,649,367
(1) The amount outstanding on each bond issue is calculated as of September 30, 2016.
HERNANDO COUNTY, FLORIDASUPPLEMENTAL INFORMATION
September 30, 2016(UNAUDITED)
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GENERAL FUND REVENUES AND EXPENDITURES
The Following chart shows information regarding the General Fund for the County’s fiscal years ending September 30, 2011 through September 30, 2016:
Fiscal Year Ending September 30,
2011 2012 2013 2014 2015 2016
REVENUES
Taxes $ 43,279,100 $ 41,670,959 $ 42,873,673 $ 49,333,564 $ 50,405,280 $ 51,800,500
Licenses and Permits 84,855 114,792 25,045 29,280 326,210 363,882
Intergovernmental 16,963,697 16,221,692 15,888,128 15,388,359 17,121,393 17,392,796
Charges for Services 7,995,844 8,657,339 8,855,072 9,937,988 12,448,581 10,791,186
Fines and Forfeitures 81,279 72,890 80,083 94,522 87,637 76,420
Interest 199,819 439,913 (50,679) 311,288 358,184 402,933
Miscellaneous 4,391,048 4,856,984 1,854,816 6,813,485 1,740,723 1,507,647
TOTAL REVENUES $ 72,995,642 $ 72,034,569 $ 69,526,138 $ 81,908,486 $ 82,488,008 $ 82,335,364
EXPENDITURES
Current:
General Government $ 16,123,765 $ 15,207,200 $ 16,087,274 $ 17,582,331 $ 18,918,049 $ 19,799,462
Public Safety 41,616,383 40,358,747 39,307,247 40,174,325 42,363,066 44,253,671
Physical Environment 279,628 231,525 203,783 217,920 232,043 264,339
Transportation 2,216,598 1,735,042 1,700,081 2,167,372 1,556,825 2,039,001
Economic Environment 2,621,067 1,908,289 1,489,083 719,489 569,075 468,929
Human Services 4,360,482 7,632,578 6,044,268 7,168,329 5,623,448 4,047,107
Culture and Recreation 4,519,654 4,188,493 4,041,556 4,300,868 4,614,532 4,651,780
Court Operations 995,679 1,029,061 1,094,414 1,142,680 1,141,355 1,223,902
Debt Service:
Principal - - 54,144 473,906 508,414 469,465
Interest and Fiscal Charges - - 10,992 105,412 81,411 116,433
Capital Outlay 1,304,956 1,170,228 1,849,119 1,934,363 2,401,167 2,764,664
TOTAL EXPENDITURES $ 74,035,212 $ 73,461,163 $ 71,881,961 $ 75,986,995 $ 78,009,385 $ 80,098,753
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES $ (1,039,570) $ (1,426,594) $ (2,355,823) $ 5,921,491 $ 4,478,623 $ 2,236,611
OTHER FINANCING SOURCES (USES)
Transfers In (1) $ 1,076,937 $ 7,327,586 $ 767,796 $ 451,407 $ 670,107 $ 1,192,360
Transfers Out (1) (3,931,092) (3,513,768) (6,661,999) (2,945,088) (4,727,066) (4,092,519)
Additions to Long-Term Debt - 324,861 750,736 - -
TOTAL OTHER FINANCING SOURCES (USES) $ (2,854,155) $ 3,813,818 $ (5,569,342) $ (1,742,945) $ (4,056,959) $ (2,900,159)
Net Change in Fund Balances (3,893,725) 2,387,224 (7,925,165) 4,178,546 421,664 (663,548)
BEGINNING FUND BALANCE 28,169,291 24,275,566 26,662,790 18,737,625 22,916,171 23,337,835
ENDING BALANCE $ 24,275,566 $ 26,662,790 $ 18,737,625 $ 22,916,171 $ 23,337,835 $ 22,674,287
(1) Transfers from or to other funds of the County.
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
CLERK OF THE CIRCUIT COURT HERNANDO COUNTY, FLORIDA
SEPTEMBER 30, 2016
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
CLERK OF THE CIRCUIT COURT HERNANDO COUNTY, FLORIDA
SEPTEMBER 30, 2016
TABLE OF CONTENTS Independent Auditors’ Report ................................................................................................................ 1-2 Financial Statements Balance Sheet - Governmental Funds ........................................................................................................ 3 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds ............................................................................................................. 4 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ......................................................................................... 5 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Records Modernization Fund ................................................................ 6 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Fines and Forfeitures Fund ................................................................... 7 Statement of Fiduciary Assets and Liabilities - Agency Funds ................................................................. 8 Notes to Financial Statements .............................................................................................................. 9-24 Other Financial Information Fiduciary Funds: Combining Statement of Fiduciary Assets and Liabilities - All Agency Funds ............................................................................................................................. 25 Other Reports
Independent Auditors’ 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 ................................................... 26-27
Independent Accountants’ Report on Compliance with Section 218.415, Florida Statutes ............................................................................................................... 28 Independent Accountants’ Report on Compliance with Sections 28.35 and 28.36, Florida Statutes ................................................................................................. 29 Independent Accountants’ Report on Compliance with Section 61.181, Florida Statutes ................................................................................................................. 30 Management Letter ............................................................................................................................. 31-32
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INDEPENDENT AUDITORS’ REPORT Honorable Don Barbee, Jr. Clerk of the Circuit Court Hernando County, Florida Report on the Financial Statements We have audited the accompanying financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Clerk of the Circuit Court (the Clerk) as of and for the year ended September 30, 2016, and the related notes to the financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements 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 (GAAP); 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. Auditors’ 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 each major fund and the aggregate remaining fund information of the Clerk as of September 30, 2016, and the respective changes in financial position and budgetary comparisons thereof, where applicable, for the year then ended in accordance with accounting principles generally accepted in the United States of America.
2
Honorable Don Barbee, Jr. Clerk of the Circuit Court Hernando County, Florida
INDEPENDENT AUDITORS’ REPORT (Concluded)
Emphasis of Matter – Incomplete Presentation As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida (the Rules). In conformity with the Rules, the accompanying financial statements are intended to present the financial position, changes in financial position, and budgetary comparisons of each major fund and the aggregate remaining fund information, where applicable, only for that portion of the major funds and the aggregate remaining fund information of Hernando County, Florida, that is attributable to the Clerk. They do not purport to, and do not, present fairly the financial position as a whole of Hernando County, Florida, as of September 30, 2016, and the changes in its financial position or budgetary comparisons for the year then ended in conformity with GAAP. Our opinion is not modified with respect to this matter. Other Matters Other Financial Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Clerk’s financial statements. The other financial information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. The other financial information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other financial information is fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 6, 2017, on our consideration of the Clerk’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 Clerk’s internal control over financial reporting and compliance. March 6, 2017 Sarasota, Florida
See accompanying notes.3
Records Fines and General Modernization Forfeitures Total
AssetsCash 8,425$ 0$ 0$ 8,425$ Equity in Pooled Cash and
Investments 318,176 1,284,405 820,093 2,422,674Accounts Receivable 84,921 0 0 84,921Due from Other Government
Agencies 2,275 0 68,264 70,539Prepaid Items 156,934 36,371 0 193,305
Total Assets 570,731 1,320,776 888,357 2,779,864
Liabilities and Fund Balances
LiabilitiesAccounts Payable 142,320 436 9,030 151,786Accrued Wages and Benefits 74,912 5,776 96,341 177,029Due to Hernando County,
Florida, Board of CountyCommissioners 228,343 0 135,217 363,560
Due to Other GovernmentAgencies 0 0 490,299 490,299
Deposits 125,156 0 157,470 282,626Total Liabilities 570,731 6,212 888,357 1,465,300
Fund BalancesNonspendable:
Prepaid Items 0 36,371 0 36,371 Restricted for:
Record Modernization 0 1,278,193 0 1,278,193Total Fund Balances 0 1,314,564 0 1,314,564
Total Liabilities andFund Balances 570,731$ 1,320,776$ 888,357$ 2,779,864$
CLERK OF THE CIRCUIT COURT
BALANCE SHEETGOVERNMENTAL FUNDS
SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
See accompanying notes.4
Records Fines and General Modernization Forfeitures Total
RevenuesIntergovernmental 0$ 0$ 427,529$ 427,529$ Charges for Services 1,157,220 433,355 2,949,391 4,539,966 Fines and Forfeitures 0 187,694 799,862 987,556 Interest Income 10,211 8,079 12,204 30,494 Miscellaneous 4,635 0 0 4,635
Total Revenues 1,172,066 629,128 4,188,986 5,990,180
ExpendituresGeneral Government:
Personal Services 2,251,451 0 0 2,251,451 Operating Expenditures 521,724 56,591 0 578,315
Court Operations:Personal Services 0 181,241 3,114,027 3,295,268 Operating Expenditures 0 183,646 181,757 365,403
Capital Outlay 82,848 19,008 0 101,856 (Total Expenditures) (2,856,023) (440,486) (3,295,784) (6,592,293)
(Deficiency) Excess of Revenues (Under) Over Expenditures (1,683,957) 188,642 893,202 (602,113)
Other Financing Sources (Uses)Transfers in:
Hernando County, Florida,Board of County Commissioners 1,912,300 0 0 1,912,300
Transfers (out):Distribution of Excess
Appropriations to theHernando County, Florida,Board of County Commissioners (228,343) 0 (135,217) (363,560)
Distribution of Excess Court Revenue to the Stateof Florida 0 0 (757,985) (757,985)
Total Other Financing Sources (Uses) 1,683,957 0 (893,202) 790,755
Net Change in Fund Balance 0 188,642 0 188,642
Fund Balance, Beginning of Year 0 1,125,922 0 1,125,922 Fund Balance, End of Year 0$ 1,314,564$ 0$ 1,314,564$
CLERK OF THE CIRCUIT COURT
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
See accompanying notes.5
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Charges for Services 910,000$ 910,000$ 1,157,220$ 247,220$ Interest Income 3,200 3,200 10,211 7,011 Miscellaneous 1,500 1,500 4,635 3,135
Total Revenues 914,700 914,700 1,172,066 257,366
ExpendituresGeneral Government:
Personnel Services 2,349,000 2,347,500 2,251,451 96,049 Operating Expenditures 251,000 252,500 521,724 (269,224)
Capital Outlay 2,000 2,000 82,848 (80,848) Reserves 225,000 225,000 0 225,000
(Total Expenditures) (2,827,000) (2,827,000) (2,856,023) (29,023)
(Deficiency) of Revenues (Under) Expenditures (1,912,300) (1,912,300) (1,683,957) 228,343
Other Financing Sources (Uses)Transfers in:
Hernando County, Florida, Boardof County Commissioners 1,912,300 1,912,300 1,912,300 0
Transfers (out):Distribution of Excess Appropriations
to the Hernando County, Florida, Board of County Commissioners 0 0 (228,343) (228,343)
Total Other Financing Sources (Uses) 1,912,300 1,912,300 1,683,957 (228,343)
Net Change in Fund Balance 0 0 0 0
Fund Balance, Beginning of Year 0 0 0 0
Fund Balance, End of Year 0$ 0$ 0$ 0$
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
Budget
BUDGET AND ACTUAL - GENERAL FUNDFOR THE YEAR ENDED SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDACLERK OF THE CIRCUIT COURT
See accompanying notes.6
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Charges for Services 340,000$ 340,000$ 433,355$ 93,355$ Fines and Forfeitures 227,000 227,000 187,694 (39,306) Interest Income 3,500 3,500 8,079 4,579
Total Revenues 570,500 570,500 629,128 58,628
ExpendituresGeneral Government:
Personnel Services 800 800 0 800 Operating Expenditures 129,000 129,000 56,591 72,409
Court Operations:Personnel Services 462,600 462,600 181,241 281,359 Operating Expenditures 196,500 196,500 183,646 12,854
Capital Outlay 140,000 140,000 19,008 120,992 Reserves 660,600 660,600 0 660,600
(Total Expenditures) (1,589,500) (1,589,500) (440,486) 1,149,014
Net Change in Fund Balance (1,019,000) (1,019,000) 188,642 1,207,642
Fund Balance, Beginning of Year 0 0 1,125,922 1,125,922
Fund Balance, End of Year (1,019,000)$ (1,019,000)$ 1,314,564$ 2,333,564$
Budget
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - RECORDS MODERNIZATION FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDACLERK OF THE CIRCUIT COURT
See accompanying notes.7
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Intergovernmental 175,000$ 175,000$ 427,529$ 252,529$ Charges for Services 2,850,500 2,850,500 2,949,391 98,891 Fines and Forfeitures 823,000 823,000 799,862 (23,138) Interest Income 1,780 1,780 12,204 10,424 Miscellaneous 0 0 0 0
Total Revenues 3,850,280 3,850,280 4,188,986 338,706
ExpendituresCourt Operations:
Personnel Services 3,162,150 3,162,150 3,114,027 48,123 Operating Expenditures 188,130 188,130 181,757 6,373
(Total Expenditures) (3,350,280) (3,350,280) (3,295,784) 54,496
Excess of Revenues Over Expenditures 500,000 500,000 893,202 393,202
Other Financing Sources (Uses)Transfers (out):
Distribution of Excess Appropriationsto the Hernando County, Florida, Board of County Commissioners 0 0 (135,217) (135,217)
Distribution of Excess Court Revenueto State of Florida (500,000) (500,000) (757,985) (257,985)
Net Change in Fund Balance 0 0 0 0
Fund Balance, Beginning of Year 0 0 0 0
Fund Balance, End of Year 0$ 0$ 0$ 0$
Budget
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - FINES AND FORFEITURES FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDACLERK OF THE CIRCUIT COURT
See accompanying notes.8
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDS
SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDACLERK OF THE CIRCUIT COURT
AssetsEquity in Pooled Cash and Investments $ 3,554,076 Accounts Receivable 300
Total Assets 3,554,376
LiabilitiesAccounts Payable 14,317 Due to Other Government Agencies 645,948 Deposits 860,772 Other Current Liabilities 2,033,339
Total Liabilities $ 3,554,376
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NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
Note 1 - Summary of Significant Accounting Policies
Reporting Entity Hernando County, Florida (the County), is a political subdivision of the State of Florida. It is governed by an elected Board of County Commissioners (the Board) and managed by an appointed County Administrator. The Hernando County, Florida, Clerk of the Circuit Court (the Clerk), is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Section 28.36, Florida Statutes, the Clerk’s budget for the court activities in the Fines and Forfeitures Fund is submitted to the Clerks of Court Operations Corporation (CCOC). The Clerk is responsible for the administration and operation of the Clerk’s office, including the Circuit and County court systems. The operations of the Clerk are funded primarily from fees and charges authorized under applicable Florida Statutes, or state general appropriations. Certain costs of the court systems (communications services; existing radio systems; existing multi-agency criminal justice information systems; and the cost of construction or lease, maintenance, utilities, and security of facilities for the trial courts, public defenders’ offices, and state attorneys’ offices) are required by Article V, Florida Constitution, to be funded by the Board. Such costs are not included herein. For financial reporting purposes, the Clerk is deemed to be part of the primary government of the County and, as such, is included in the County’s Comprehensive Annual Financial Report. Basis of Presentation The accompanying financial statements include all the funds and accounts of the Clerk’s office, but are not a complete presentation of the County as a whole. Except for this matter, they are otherwise in conformity with accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(4), Rules of the Auditor General—Local Governmental Entity Audits. The financial transactions of the Clerk are recorded in individual funds. Each fund is accounted for by providing a separate set of self-balance accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. These funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with specific regulations, restrictions, or limitations. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. GAAP sets forth minimum criteria (percentage of total assets, liabilities, revenues, or expenditures) for the determination of major funds. Each major fund is reported in a separate column. The Clerk reports the following major governmental funds:
■ General Fund—The General Fund is used to account for the general operations of the Clerk and includes all transactions which are not accounted for in another fund.
10
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued)
Basis of Presentation (Concluded)
■ Records Modernization Fund—The Records Modernization Fund was created pursuant to
Florida Statutes 631 effective July 1, 1987. The Clerk charges a fee for each instrument recorded in the official records. The fee is deposited into this fund. The money in this fund is to be held by the Clerk and is restricted exclusively for equipment, personnel training, and technical assistance in modernizing the official records system. Effective July 1, 2004, an additional amount is collected pursuant to Section 28.24(12)(e), Florida Statutes, and is used exclusively for funding court-related technology needs. Beginning July 1, 2009, the fund also receives 10% of the Clerk’s fees on civil and criminal fines collections to be used for additional court-related operational needs and program enhancements.
■ Fines and Forfeitures Fund—The Fines and Forfeitures Fund was created pursuant to
Florida Statutes 28.36, effective July 1, 2004. The fund accounts for court-related functions pursuant to Florida Statutes 28.35(3)(a). From July 1, 2009 through June 30, 2013, related fees and charges were remitted monthly to the state, and the court-related functions were funded by a monthly state appropriation. Beginning July 1, 2013, the state appropriations were terminated, and related fees and charges (including those received in June 2013) are no longer remitted to the state, but are instead retained to fund court-related functions. Excess revenues are returned to the state.
The Clerk also reports the following fund type: ■ Agency Funds—To account for assets held by the Clerk in a trustee capacity or as an agent
for individuals, private organizations, and other governments.
With the implementation of Revision 7 to Article V on July 1, 2004, the Clerk’s activities are now classified as court-related and noncourt-related. Noncourt-related activities are reported in the Clerk’s General Fund. These activities are funded primarily with service charges for recording instruments and documents into the official records, and through transfers in from the Board. Excess revenues at the end of the year are due back to the Board, and are shown as a liability and transfer out in the General Fund.
Court-related activities are reported in the Fines and Forfeitures Fund. Excess revenues are due back to the state periodically, except that one month’s revenues can be retained for cash flow needs. Based on the legal opinion provided by the CCOC general counsel of the provisions of Section 28.37(3), Florida Statutes, which was adopted as policy by the CCOC Finance and Budget Committee, all excess court-related funds have been included in a fund liability, due to other government agencies.
11
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Measurement Focus and Basis of Accounting Governmental funds are accounted for using the flow of current financial resources measurement
focus. Only current assets and current liabilities, generally, are included on the balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting.
The modified accrual basis of accounting is used by the governmental funds. Under the modified
accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Clerk considers revenues to be available if they are collected within 25 days of the end of the current period. The monthly reimbursement for the Local Child Support Enforcement IV-D grant typically exceeds this 25 day period. For this grant only, the Clerk considers revenues to be available if they are collected within 45 days of the end of the current period. Expenditures are recorded when the related fund liability is incurred, except for certain compensated absences, which are recognized as expenditures to the extent they have matured. Prepaid expenses are recorded under the consumption method.
Charges for services, interest income, and other revenue are recognized as they are earned and
become measurable and available to pay liabilities of the current period.
The general operations of the Clerk are funded principally by fees from third parties and appropriations from the Board. The appropriations from the Board are presented in the Clerk’s financial statements as transfers in.
Excess Fees
For the General Fund, Florida Statutes provide that the amount by which revenues and transfers exceed annual expenditures be remitted to the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. The amount of this distribution is recorded as a liability and as another financing use in the General Fund in the accompanying financial statements.
For the Fines and Forfeitures Fund, the Clerk makes monthly payments to the State from its
budget surplus and is required to return additional net revenues annually. Amounts returned were $575,848 and net revenues accrued were $182,137, for a total state distribution of $757,985. This distribution is recorded as an “other financing use” in the Fines and Forfeitures Fund. Net revenues are returned to the State on a basis that straddles the fiscal year; i.e., September revenues can be carried over for working capital needs. Amounts recorded as due to other governmental agencies in the Fines and Forfeitures Fund totaling $490,299, included net revenues of $119,414 scheduled to be returned to the State in January 2017, and $370,885 available for carryover.
12
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued)
Equity in Pooled Cash and Investments The Clerk pools substantially all cash and temporary investments. During the year, such
temporary investments included money market funds, mutual funds, deposits with the Florida State Board of Administrations’ (SBA) Florida PRIME (formerly known as the Local Government Surplus Funds Trust Fund Pooled Investment Account), and the Florida Local Government Investment Trusts’ (the Trust) Florida Trust Funds. The PRIME and Florida Trust Funds are external investment pools reported at amortized cost, which approximates fair value. Each fund’s equity in pooled cash is stated at the respective funds’ contributed cost plus interest which also approximates fair value. Earnings from pooled cash and investments are allocated to each fund based on a monthly weighted average of the equity balance of each fund. Additionally, all other investments, if any, are reported at fair value.
Compensated Absences All full-time employees of the Clerk are entitled to annual paid time off (PTO) with pay. PTO is
an employee benefit that combines traditional vacation and sick leave programs into one plan with two components.
The employees are generally allowed to accumulate PTO up to a certain maximum, based on length
of employment. Upon termination before retirement, the employee is paid for up to 80% of accrued and unused PTO. Retiring employees receive up to 100% of their accrued PTO balance. PTO payments are included in operating costs when the payments are made to the employees. The Clerk does not, nor is he/she legally required to accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the governmental funds but rather is reported in the basic financial statements of the County.
Fund Balances The Clerk implemented the provisions of GASB issued Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions (GASB 54) in 2011, as required. The purpose of GASB 54 was to improve the consistency and usefulness of fund balance information to the financial statement user. The statement established fund balance classifications that comprise a hierarchy based primarily on the extent to which the organization is bound to honor constraints on the specific purpose for which amounts in the funds can be spent. Fund balance is reported in five components―nonspendable, restricted, committed, assigned, and unassigned:
■ Nonspendable―This component of fund balance consists of amounts that cannot be spent
because: (a) they are not expected to be converted to cash, or (b) they are legally or contractually required to remain intact. Examples of this classification are prepaid items, inventories, and principal (corpus) of an endowment fund.
■ Restricted―This component of fund balances consists of amounts that are constrained
either: (a) externally by third parties (creditors, grantors, contributors, or laws or regulations of other governments), or (b) by law through constitutional provisions or enabling legislation.
■ Committed―This component of fund balance consists of amounts that can only be used for
specific purposes pursuant to constraints imposed by formal action (e.g., policy) of the organization’s governing authority. By Statute, the Clerk himself is the governing authority. These committed amounts cannot be used for any other purpose unless the Clerk removes or changes the specified use by taking the same type of action (e.g., policy) he employed to constrain those amounts.
13
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Fund Balances (Concluded) ■ Assigned―This component of fund balance consists of amounts that are constrained by a
less-than-formal action of the organization’s governing authority, or by an individual or body to whom the governing authority has delegated this responsibility. The Clerk has not delegated the responsibility to assign fund balances to any individual or body.
■ Unassigned―This classification is used for: (a) negative unrestricted fund balances in any
governmental fund, or (b) fund balances within the General Fund that are not restricted, committed, or assigned.
When both restricted and unrestricted resources are available for use, it is the Clerk’s policy to use restricted resources first, then unrestricted resources (committed, assigned and unassigned) as they are needed. When unrestricted resources (committed, assigned, and unassigned) are available for use, it is the Clerk’s policy to use committed resources first, then assigned, and then unassigned as needed. Use of Estimates The preparation of financial statements in accordance with GAAP, requires management to make estimates and assumptions that affect the amounts reported or disclosed in the financial statements and accompanying notes. Actual results could differ from those estimates. Governmental Accounting Standards Board (GASB) Statement No. 68 The Clerk participates in the Florida Retirement System (FRS) defined benefit pension plan and the Health Insurance Subsidy (HIS) defined benefit plan administered by Florida Division of Retirement. As a participating employer, the Clerk implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, as required in 2015. GASB Statement No. 68 requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers’ proportionate share of the net pension liabilities and related pension amounts of the defined benefit pension plans. However, these liabilities would be recorded in government-wide financial statements, which are not required in this special-purpose presentation. As such, only the applicable disclosures required by GASB Statement No. 68 have been presented herein. In addition, the cost-sharing multiple-employer plans mentioned above operate on a fiscal year ended June 30. Governmental Accounting Standards Board (GASB) Statement Nos. 72 and 79 During the year ended September 30, 2016, the Clerk implemented GASB Statement No. 72, Fair Value Measurement and Application. This Statement requires disclosures to be made about fair value measurements, the level of fair value hierarchy, and valuation techniques. This statement clarifies the definition of fair value as an exit price. This statement also defines an investment security or other asset that: (a) a government holds primarily to generate income or profit; and (b) has a present service capacity based solely on the asset’s ability to generate cash or to generate cash when sold. Governmental entities are required to record investments at fair value unless an exception applies and disclose the fair value hierarchy.
14
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued)
Note 1 - Summary of Significant Accounting Policies (Concluded) Governmental Accounting Standards Board (GASB) Statement Nos. 72 and 79 (Concluded) During the year ended September 30, 2016, the Clerk implemented GASB Statement No. 79, Certain External Investment Pools and Pool Participants. The Statement allows qualifying external investment pools to elect to measure all investments at amortized cost if the pool meets certain criteria and subsequently allows pool participants to record an investment in the pool at amortized cost.
Note 2 - Budgetary Process
Generally, Florida Statutes 129.021 and 129.03 govern the preparation, adoption, and administration of the Clerk’s annual budget. The Clerk prepares a budget for all funds. Subsequent amendments can be made to these budgets without Board approval, except when they increase the total General Fund budget. The Clerk also prepares an annual budget for the Fines and Forfeiture Fund that is submitted to the CCOC.
Budgets are prepared on a basis consistent with GAAP. The annual budget serves as the legal authorization for expenditures. Budgetary control is maintained at the departmental major object expenditure level. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year-end. Budgetary changes within major object expenditures categories are made at the discretion of the Clerk. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized.
Note 3 - Cash and Equity in Pooled Cash and Investments Cash and Cash Equivalents At September 30, 2016, the fair value of the Clerk’s cash and equity in pooled cash was as follows:
Fair Credit Value Rating Cash on Hand $ 8,425 N/A Demand Deposits 1,243,589 N/A Total Cash and Cash Equivalents $ 1,252,014
The Clerk’s bank deposits are held in qualified public depositories (QPDs) pursuant to Chapter 280, Florida Statutes. Under this Chapter, each QPD is required to pledge collateral to the State Treasurer against the public deposits. In the event of default by a QPD, all claims for public deposits would be satisfied by the State Treasurer from the proceeds of federal deposit insurance, pledged collateral of the QPD in default and, if necessary, assessments against other QPDs of the same type as the depositor in default.
15
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued)
Note 3 - Cash and Equity in Pooled Cash and Investments (Continued) Investments The Clerk’s investment policy follows guidance set forth in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. The policy authorizes the following investments: ■ Investment Pool - Florida PRIME ■ Investment Pools - The Florida Trust Funds ■ Direct Obligations of (or Unconditionally Guaranteed by) the United States (U.S.) Government ■ Certain Obligations Issued or Guaranteed by U.S. Agencies ■ Certificates of Deposit, Money Market Accounts, etc. in QPDs ■ Certain Repurchase Agreements ■ Certain SEC-Registered Money Market Funds ■ Certain Prime-rated Commercial Paper ■ Certain Domestic Bankers’ Acceptances ■ Qualified Municipal Debt General Obligation Securities Rated at Least “A or Equivalent” ■ Certain Corporate Debt Securities Rated at Least “A or Equivalent”
The primary objective of the investment policy is to assure that investments are of minimum risk.
The second criterion is the assurance of liquidity, and the third consideration is yield. The Clerk participates in the Florida Local Government Investment Trust, (the Trust) which is
administered by a Board of Trustees appointed by the Florida Association of Court Clerks and County Comptroller, and the Florida Association of Counties, Inc. The Trust was created in December 1991 to provide a means for public entities to pool surplus funds to maximize net earnings. The Trust invests in money market, and U.S. treasury notes, collateralized mortgage obligations, asset backed securities, agency notes, agency ARM pass-through, corporate bonds, government related securities, and certificates of deposit. The Trust reports all share information at net asset value. The Trust is rated AAAf for credit quality and S1 for bond fund volatility by Standard & Poor’s rating. The Clerk has also invested in the Florida Trust Day-to-Day Fund which is a money market fund.
Following is a list of investments held at September 30, 2016, (Ratings from Standard and Poor’s): Maturity Fair Value Rating Investment: Investment Pools: Florida Local Government Investment Trust Immediate $ 1,383,161 AAAf Florida Trust - Day to Day Fund 55 days 600,000 AAAm Florida PRIME Local Government Surplus Trust 50 days 2,754,964 AAAm Total Investments $ 4,733,161
Credit Risk In an effort to limit credit risk, the Clerk’s investment policy identifies and limits investments to only top ratings issued by nationally recognized statistical rating organizations.
16
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued)
Note 3 - Cash and Equity in Pooled Cash and Investments (Continued) Credit Risk (Concluded) The Clerk’s cash equivalents consist of funds placed with the following entity: • The State Board of Administration for participation in the Local Government Investment Pool
(Florida PrimeTM) created by Section 218.415, Florida Statutes. This investment pool operates under investment guidelines established by Section 215.47, Florida Statutes. The Clerk’s investments in Florida PrimeTM, an external investment pool, are reported at amortized cost.
The Clerk’s short-term investments consist of funds placed with the following entity: • The Clerk also has investments with Florida Local Government Investment Trust (FLGIT)
operated by the Florida Association of Counties and Florida Court Clerks and Comptrollers. The pool is an authorized investment consistent with Section 218.415(16)(a), Florida Statutes, and the Clerk’s short-term investment policy. GASB Statement No. 31 requires all governments to mark to market the unrealized gains and losses incurred in its investments.
Concentration of Investment Risk To manage concentration of investment risk, the Clerk’s investment policy stipulates maximum limitation guidelines for diversification by instrument. A maximum of 80% of the portfolio may be invested in each of the Florida Trust Funds or Florida PRIME. Investment maximum limitations range from 10% to 80% for each of the remaining types of investments.
Custodial Credit Risk To manage custodial credit risk for investments, the Clerk’s investment policy specifies the Clerk will execute a third party Custodial Safekeeping Agreement with a commercial bank’s trust department separately chartered by the U.S. Government or State of Florida. All securities purchased by the Clerk are properly designated as an asset of the Clerk and are held in safekeeping by the bank’s Trust department. Interest Rate Risk To manage interest rate risk, the Clerk maintains a formal investment policy that limits investment maturities not to exceed two years. This coupled with a diversified portfolio limits exposure to fair value losses arising from increasing interest rates. Fair Value Measurement The Clerk holds assets that are defined as short-term investments. The Clerk’s investments are recorded at fair value unless the investment qualifies as an external investment pool under the guidance in GASB Statement No. 79. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels: • Level 1 inputs-are quoted prices (unadjusted) for identical assets or liabilities in active
markets that a government can access at the measurement date • Level 2 inputs-are inputs other than quoted prices included within Level 1 that are observable
for an asset or liability, either directly or indirectly.
17
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued)
Note 3 - Cash and Equity in Pooled Cash and Investments (Concluded)
Fair Value Measurement (Concluded) ● Level 3 inputs-are unobservable inputs for an asset or liability. The fair value hierarchy gives
the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price for an identical asset or liability is not observable, a government should measure fair value using another valuation technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs.
The following short-term investments are recorded at fair value:
• Florida Local Government Investment Trust (FLGIT) Under the fair value hierarchy, all of these investments are considered to be Level 1. The Clerk’s holds investments in qualified external investments pools that measure all of its investment at amortized cost for financial reporting purposes. These investments are recorded at amortized cost. The following investments are recorded at amortized costs and are not subject to the fair value hierarchy: • Florida Local Government Investment Pool (Florida PrimeTM)
None of the pools have limitations or restrictions on participant withdrawals including items such as redemption notices, maximum transaction amounts, and the pool’s authority to impose liquidity fees or redemption gates. The above cash and investments are reported as $2,431,099 and $3,554,076 in the governmental funds and agency funds, respectively.
Note 4 - Capital Assets Pursuant to Florida Statutes, capital assets used by the Clerk are owned by the Board. The Clerk
maintains custodial and record-keeping responsibility for the tangible and intangible capital assets used by the office. The office space used in the Clerk’s operations is provided at no cost by the Board.
Capital assets paid for by the Clerk are recorded as expenditures in the governmental funds of
the Clerk and are capitalized in the basic financial statements of the County. Donated assets are recorded directly on the County’s books at their estimated fair value on the date received. Depreciation is recorded at the County level.
18
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued) Note 5 - Long-term Liability The following is a summary of changes in general long-term liabilities, which are reported in the
basic financial statements of the County:
Balance Balance Due October 1, September 30, Within 2015 Additions Retirements 2016 One Year Accrued Compensated Absences $ 273,573 $ 367,578 $ (348,875) $ 292,276 $ 292,276
The long-term liabilities above are not reported in the financial statements of the Clerk since they have not matured.
Note 6 - Employee Retirement Plan
General Information about the Florida Retirement System (FRS) The FRS was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees. The FRS was amended in 1998 to add the Deferred Retirement Option Program (DROP) under the defined benefit plan and amended in 2000 to provide a defined contribution plan alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined contribution pension plan is the FRS Investment Plan. Chapter 112, Florida Statutes, established the Retiree Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit pension plan, to assist retired members of any state-administered retirement system in paying the costs of health insurance.
Essentially all regular employees of the Clerk are eligible to enroll as members of the State-administered FRS. Provisions relating to FRS are established by Chapters 121 and 122, Florida Statutes; Chapter 112 Part IV, Florida Statutes; Chapter 238, Florida Statutes; and FRS Rules, Chapter 60S, Florida Administrative Code; wherein eligibility, contributions, and benefits are defined and described in detail. Such provisions may be amended at any time by further action from the Florida Legislature. The FRS is a single retirement system administered by the Florida Department of Management Services, Division of Retirement, and consists of two cost-sharing, multiple-employer defined-benefit plans and other nonintegrated programs. A comprehensive annual financial report of the FRS, which includes its financial statements, required supplementary information, actuarial report, and other relevant information, is available from the Florida Department of Management Services’ web site (www.dms.myflorida.com).
The Clerk’s contributions to the FRS Plan totaled $372,802 for the fiscal year ended September 30, 2016, (all plans). FRS Pension Plan Plan Description. The FRS Pension Plan (Plan) is a cost-sharing multiple-employer defined benefit pension plan, with a DROP for eligible employees. The general classes of membership applicable to the Clerk are as follows:
19
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued) Note 6 - Employee Retirement Plan (Continued)
FRS Pension Plan (Continued) ■ Regular Class―Members of the Plan who do not qualify for membership in the other classes. ■ Elected County Officer Class―Members who hold specified elective offices in local
government. ■ Senior Management Service Class―Members in senior management level positions. Employees enrolled in the Plan prior to July 1, 2011, vest at six years of creditable service and employees enrolled in the Plan on or after July 1, 2011, vest at eight years of creditable service. All vested members enrolled prior to July 1, 2011, are eligible for normal retirement benefits at age 62 or at any age after 30 years of service. All members enrolled in the Plan on or after July 1, 2011, once vested, are eligible for normal retirement benefits at age 65 or any time after 33 years of creditable service. Members of the Plan may include up to four years of credit for military service toward creditable service. The Plan also includes an early retirement provision; however, there is a benefit reduction for each year a member retires before his or her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-of-living adjustments to eligible participants. DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal retirement under the Plan to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in DROP for a period not to exceed 60 months after electing to participate, except that certain instructional personnel may participate for up to 96 months. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not include amounts for DROP participants, as these members are considered retired and are not accruing additional pension benefits. Benefits Provided. Benefits under the Plan are computed on the basis of age and/or years of service, average final compensation, and service credit. Credit for each year of service is expressed as a percentage of the average final compensation. For members initially enrolled before July 1, 2011, the average final compensation is the average of the five highest fiscal years’ earnings; for members initially enrolled on or after July 1, 2011, the average final compensation is the average of the eight highest fiscal years’ earnings. The total percentage value of the benefit received is determined by calculating the total value of all service, which is based on the retirement class to which the member belonged when the service credit was earned. Certain members are eligible for in-line-of-duty or regular disability and survivors’ benefits. The following chart shows the percentage value for each year of service credit earned:
20
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued) Note 6 - Employee Retirement Plan (Continued)
FRS Pension Plan (Continued)
Benefits Provided. (Concluded) As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by 3%. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. Contributions. The Florida Legislature establishes contribution rates for participating employers and employees. Contribution rates during the 2015-2016 fiscal year were as follows:
Class, Initial Enrollment, and Retirement Age/Years of Service % Value
Regular Class Members Initially Enrolled Before July 1, 2011 Retirement up to age 62 or up to 30 years of service 1.60 Retirement at age 63 or with 31 years of service 1.63 Retirement at age 64 or with 32 years of service 1.65 Retirement at age 65 or with 33 or more years of service 1.68
Regular Class Members Initially Enrolled on or After July 1, 2011 Retirement up to age 65 or up to 33 years of service 1.60 Retirement at age 66 or with 34 years of service 1.63 Retirement at age 67 or with 35 years of service 1.65 Retirement at age 68 or with 36 or more years of service 1.68
Elected County Officers 3.00
Senior Management Service Class 2.00
Employee Employer Employee Employer
FRS, Regular 3.00 5.56 3.00 5.80FRS, Elected County Officers 3.00 40.57 3.00 40.75FRS, Senior Management Service 3.00 19.73 3.00 20.05DROP - Applicable to Members from All of the Above Classes 0.00 11.22 0.00 11.33FRS, Reemployed Retiree (1) (1) (1) (1)
Notes: (1) Contribution rates are dependent upon retirement class in which reemployed.
Class
Year Ended June 30, 2016Percent of Gross Salary
Year Ended June 30, 2017 Percent of Gross Salary
21
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued) Note 6 - Employee Retirement Plan (Continued)
FRS Pension Plan (Concluded) The Clerk contributions (employer only) to the Plan totaled $286,606 for the fiscal year ended September 30, 2016. This excludes the HIS defined benefit pension plan contributions. Pension Liabilities. The FRS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Clerk’s proportionate share of the FRS net pension liability was $1,619,222. Further details of the FRS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report. HIS Pension Plan Plan Description. The HIS Pension Plan (HIS Plan) is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida Legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Florida Department of Management Services. Benefits Provided. For the fiscal year ended September 30, 2016, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS Plan benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Contributions. The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal years ended June 30, 2017 and 2016, the contribution rates was 1.66% of payroll respectively, pursuant to Section 112.363, Florida Statues. The Clerk contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. The Clerk’s contributions to the HIS Plan totaled $63,823 for the fiscal year ended September 30, 2016.
22
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued) Note 6 - Employee Retirement Plan (Continued)
HIS Pension Plan (Concluded) Pension Liabilities. The HIS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Clerk’s proportionate share of the HIS net pension liability was $1,290,097. Further details of the HIS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report.
FRS – Defined Contribution Pension Plan The Clerk contributes to the FRS Investment Plan (Investment Plan), a defined contribution pension plan, for its eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the SBA, and is reported in the SBA’s annual financial statements and in the State of Florida Comprehensive Annual Financial Report. Service retirement benefits are based upon the value of the member’s account upon retirement. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. Clerk employees participating in DROP are not eligible to participate in the Investment Plan. Employer and employee contributions, including amounts contributed to individual member’s accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Allocations to the investment members’ accounts during the 2015-16 fiscal year were as follows:
Percent of GrossClass Compensation
FRS, Regular 6.30FRS, Elected County Officers 11.34FRS, Senior Management Service 7.67
23
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Continued)
Note 6 - Employee Retirement Plan (Concluded)
FRS – Defined Contribution Pension Plan (Concluded) For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the Plan is transferred to the Investment Plan, the member must have the years of service required for Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five year period, the employee will regain control over their account. If the employee does not return within the five-year period, the employee will forfeit the accumulated account balance. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04% of payroll and by forfeited benefits of Investment Plan members. For the fiscal year ended September 30, 2016, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to the Clerk. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the Plan, or remain in the Investment Plan and rely upon that account balance for retirement income. The Clerk’s contributions to the Investment Plan totaled $22,372 for the fiscal year ended September 30, 2016.
Note 7 - Postemployment Benefits Other Than Pensions
The Board offers post-retirement health care benefits and life insurance to all retired employees of the Clerk’s Office and their dependents. Participating retirees are required to reimburse the Board for 100% of the premium cost, which is netted against the premium payment, so that no net expense is initially recorded in the Board’s financial statements. However, these retirees are receiving an “implicit subsidy” because the premium is a group rate which includes active, lower cost employees. This implicit subsidy has a cost which under GAAP is required to be disclosed in these financial statements. However, this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Clerk’s Office. Accordingly, these calculations and disclosures can be found in the County-wide annual financial report.
24
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
(Concluded)
Note 8 - Risk Management The Clerk participates in the insurance programs of the Board, including general liability,
workers’ compensation, and employee health insurance. These risk management activities are handled through internal service funds maintained by the Board. All liabilities associated with these self-insured risks are reported in the basic financial statements of the Board. The purpose of these funds is to administer employee life, health, workers’ compensation, unemployment, disability insurance, and property and liability insurance. These funds account for the risk financing activities of the County, but do not constitute a transfer of risk from the County.
Significant losses are covered by commercial insurance for all major programs except workers’ compensation for which the County retains risk of loss. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage in any of the last three years.
The Clerk paid premiums of $905,008 for life and health insurance coverage to the Board for the
year ended September 30, 2016.
The Board’s Workers’ Compensation internal service fund is a self-insurance program for workers’ compensation claims on losses up to $1,100,000 per occurrence. The Workers’ Compensation fund has indemnified the Clerk against any losses in a given year in excess of the fee charged. In the event actual losses are less than the fee charged, such amounts will be retained in the Workers’ Compensation fund. Claim settlements and losses are accrued and subsequently paid from the Workers’ Compensation fund. Premium payments to the Board by the Clerk, which are based on a percentage of salaries paid according to salary classifications, totaled $10,703 for the year ended September 30, 2016.
Note 9 - Commitments, Claims, and Contingencies Litigation The Clerk is involved as defendant or plaintiff in certain litigation and claims arising from the
ordinary course of operations. Any judgments against the Clerk in excess of insurance limits would be settled by the Board. In the opinion of the Clerk and legal counsel, the range of potential recoveries or liabilities will not materially affect the financial position of the Clerk.
Federal and State Grants Grant funds received by the Clerk are subject to audit by grantor agencies. Audits of these grants
may result in disallowed costs, which may constitute a liability of the Clerk. In the opinion of management, disallowed costs, if any, would be insignificant to the financial position and operations of the Clerk.
OTHER FINANCIAL INFORMATION
HERNANDO COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT
SEPTEMBER 30, 2016
FIDUCIARY FUNDS Agency Funds are used to account for assets held by a governmental unit as trustee or agent for individuals, private organizations, and other governmental units. ■ Trust Fund―This fund is used to account for the receipt and subsequent activity of monies temporarily
held for others. Court related fines, fees, and service charges collected by the Clerk are deposited into this fund and remitted to the State of Florida on a monthly basis. Other deposits include monies for fines to be remitted to other government agencies, intangible and documentary taxes collected to be distributed to the State of Florida, Court ordered bonds, and other miscellaneous items.
■ Domestic Relations―This fund is used to account for child support and alimony payments, and
distribution of such funds processed through the Clerk.
■ Court Registry―This fund is used to account for registry funds that have been ordered to be posted with the Clerk.
■ Ordinary Witness―This fund was established pursuant to Florida Statute 40.29, effective July 1,
2004. The fund accounts for the payment of witnesses on behalf of the state attorney and public defender.
25
Trust Domestic Court Ordinary Fund Relations Registry Witness Total
AssetsEquity in Pooled Cash and
Investments 1,419,922$ 0$ 2,128,608$ 5,546$ 3,554,076$ Accounts Receivable 0 300 0 0 300
Total Assets 1,419,922 300 2,128,608 5,546 3,554,376
LiabilitiesAccounts Payable 8,771 0 0 5,546 14,317 Due to Other Government
Agencies 645,648 300 0 0 645,948 Deposits 751,067 0 109,705 0 860,772 Other Current Liabilities 14,436 0 2,018,903 0 2,033,339
Total Liabilities 1,419,922$ 300$ 2,128,608$ 5,546$ 3,554,376$
COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIESALL AGENCY FUNDS
CLERK OF THE CIRCUIT COURT
SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
OTHER REPORTS
26
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS Honorable Don Barbee Jr. Clerk of the Circuit Court Hernando County, Florida We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Clerk of the Circuit Court (the Clerk), as of and for the year ended September 30, 2016, and the related notes to the financial statements, and have issued our report thereon dated March 6, 2017. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Clerk’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Clerk’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
27
Honorable Don Barbee Jr. Clerk of the Circuit Court Hernando County, Florida
INDEPENDENT AUDITORS’ 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 (Concluded)
Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. March 6, 2017 Sarasota, Florida
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INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES
Honorable Don Barbee Jr. Clerk of the Circuit Court Hernando County, Florida We have examined Hernando County, Florida, Clerk of the Circuit Court’s (the Clerk) compliance with the requirements of Section 218.415, Florida Statutes, as of and for the year ended September 30, 2016, as required by Section 10.556(10)(a), Rules of the Auditor General. Management is responsible for the Clerk’s compliance with those requirements. Our responsibility is to express an opinion on the Clerk’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Clerk’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk’s compliance with specified requirements. In our opinion, the Clerk complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Clerk, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. March 6, 2017 Sarasota, Florida
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INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE WITH SECTIONS 28.35 AND 28.36, FLORIDA STATUTES
Honorable Don Barbee Jr. Clerk of the Circuit Court Hernando County, Florida We have examined Hernando County, Florida, Clerk of the Circuit Court’s (the Clerk) compliance with the requirements of Sections 28.35 and 28.36, Florida Statutes, as of and for the year ended September 30, 2016, as required by Section 10.556(10)(b), Rules of the Auditor General. Management is responsible for the Clerk’s compliance with those requirements. Our responsibility is to express an opinion on the Clerk’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Clerk’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk’s compliance with specified requirements. In our opinion, the Clerk complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Clerk, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. March 6, 2017 Sarasota, Florida
30
INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE WITH SECTION 61.181, FLORIDA STATUTES
Honorable Don Barbee Jr. Clerk of the Circuit Court Hernando County, Florida We have examined Hernando County, Florida, Clerk of the Circuit Court’s (the Clerk) compliance with the requirements of Section 61.181, Florida Statutes, as of and for the year ended September 30, 2016, as required by Section 10.556(10)(d), Rules of the Auditor General. Management is responsible for the Clerk’s compliance with those requirements. Our responsibility is to express an opinion on the Clerk’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Clerk’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk’s compliance with specified requirements. In our opinion, the Clerk complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Clerk, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. March 6, 2017 Sarasota, Florida
31
MANAGEMENT LETTER Honorable Don Barbee Jr. Clerk of the Circuit Court Hernando County, Florida Report on the Financial Statements We have audited the financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Clerk of the Circuit Court (the Clerk), as of and for the year ended September 30, 2016, and have issued our report thereon dated March 6, 2017. Auditors’ Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports We have issued our Independent Auditors’ 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; Independent Accountants’ Report on Compliance with Section 218.415, Florida Statutes; Independent Accountants’ Report on Compliance with Sections 28.35 and 28.36, Florida Statutes; and Independent Accountants’ Report on Compliance with Section 61.181, Florida Statutes. Disclosures in those reports, which are dated March 6, 2017, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. In that regard, the Clerk was established by the Constitution of the State of Florida, Article VIII, Section 1(d). The Clerk does not have any component units.
32
Honorable Don Barbee Jr. Clerk of the Circuit Court Hernando County, Florida
MANAGEMENT LETTER (Concluded)
Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Clerk, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of our audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. March 6, 2017 Sarasota, Florida
HERNANDO COUNTY, FLORIDA SHERIFF
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS’ REPORT
SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA SHERIFF
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS’ REPORT
SEPTEMBER 30, 2016
TABLE OF CONTENTS
Independent Auditors’ Report ................................................................................................................ 1-2 Financial Statements Balance Sheet - Governmental Funds ........................................................................................................ 3 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds .............................................................................................................................. 4 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ......................................................................................................... 5 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Federal Forfeitures Fund ....................................................................................... 6 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - E-911 Fund ............................................................................................................ 7 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Federal Inmates Fund ............................................................................................ 8 Statement of Net Position - Proprietary Fund Type - Internal Service Fund ............................................. 9 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Fund Type - Internal Service Fund .................................................................................... 10 Statement of Cash Flows - Proprietary Fund Type - Internal Service Fund ............................................ 11 Statement of Fiduciary Assets and Liabilities - Agency Funds ............................................................... 12 Notes to Financial Statements ............................................................................................................ 13-28 Supplemental Information - Combining and Individual Fund Financial Statements and Schedules Combining Balance Sheet - Nonmajor Governmental Funds.................................................................. 29 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Nonmajor Governmental Funds .................................................................................. 30 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - 800 MHz Fund .................................................................................................... 31 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Inmate Welfare Fund ........................................................................................... 32 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Law Enforcement Education Fund ...................................................................... 33 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Grants and Contributions Fund ........................................................................... 34 Combining Statement of Net Position - Internal Service Funds .............................................................. 35 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds.......................................................................................... 36 Combining Statement of Cash Flows - Internal Service Funds ............................................................... 37 Combining Statement of Fiduciary Assets and Liabilities - All Agency Funds ....................................................................................................................................... 38
HERNANDO COUNTY, FLORIDA SHERIFF
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS’ REPORT
SEPTEMBER 30, 2016
TABLE OF CONTENTS
(Concluded) Other Reports Independent Auditors’ 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 ..................................................................................................... 39-40 Independent Accountants’ Report ........................................................................................................... 41 Management Letter ............................................................................................................................. 42-43
1
INDEPENDENT AUDITORS’ REPORT Honorable Al Nienhuis Sheriff Hernando County, Florida Report on the Financial Statements We have audited the accompanying financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Sheriff (the Sheriff), as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the Sheriff’s financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements 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. Auditors’ 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 each major fund and the aggregate remaining fund information of the Sheriff as of September 30, 2016, and the respective changes in financial position, budgetary comparisons, and, where applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America.
2
Honorable Al Nienhuis Sheriff Hernando County, Florida
INDEPENDENT AUDITORS’ REPORT
(Concluded) Emphasis of Matter – Incomplete Presentation As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida (the Rules). In conformity with the Rules, the accompanying financial statements are intended to present the financial position, changes in financial position, budgetary comparisons, and cash flows of each major fund and the aggregate remaining fund information, where applicable, only for that portion of the major funds and the aggregate remaining fund information of Hernando County, Florida, that is attributable to the Sheriff. They do not purport to, and do not, present fairly the financial position as a whole of Hernando County, Florida, as of September 30, 2016, and the changes in its financial position, budgetary comparisons, or cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Sheriff’s financial statements. The supplementary information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. The other financial information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other financial information is fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 6, 2017, on our consideration of the Sheriff’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 Sheriff’s internal control over financial reporting and compliance. January 6, 2017 Sarasota, Florida
See accompanying notes.3
Nonmajor Federal Federal Governmental
General Forfeitures E-911 Inmates Funds Total Assets
Cash and CashEquivalents $ 3,012,982 $ 832,552 $ 665,875 $ 1,210,705 $ 1,195,984 $ 6,918,098
Accounts Receivable 0 0 0 0 20,312 20,312 Due from Other Funds 21,500 0 0 0 10,834 32,334 Due from Other
Governments 35,658 0 187,071 189,933 37,639 450,301 Total Assets 3,070,140 832,552 852,946 1,400,638 1,264,769 7,421,045
Liabilities, DeferredInflows, and FundBalances
LiabilitiesAccounts Payable 636,222 0 11,679 0 10,290 658,191 Accrued Wages and
Benefits Payable 1,630,332 0 8,615 0 11,674 1,650,621 Due to Hernando
County, Florida, Board of CountyCommissioners 803,566 0 0 0 0 803,566
Due to OtherGovernments 20 0 0 0 0 20
Deposits 0 0 0 0 140 140 Total Liabilities 3,070,140 0 20,294 0 22,104 3,112,538
Deferred InflowsUnavailable Revenues 0 0 124,714 37,761 0 162,475
Fund BalancesRestricted for:
Law Enforcement Activities 0 832,552 0 0 113,247 945,799
Communications 0 0 707,938 0 212,071 920,009 Education and
Training 0 0 0 0 470,618 470,618 Inmate Benefits 0 0 0 1,362,877 441,535 1,804,412 Other 0 0 0 0 5,194 5,194
Total Fund Balances 0 832,552 707,938 1,362,877 1,242,665 4,146,032
Total Liabilities,Deferred Inflows, and Fund Balances $ 3,070,140 $ 832,552 $ 852,946 $ 1,400,638 $ 1,264,769 $ 7,421,045
SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDASHERIFF
BALANCE SHEETGOVERNMENTAL FUNDS
See accompanying notes.4
NonmajorFederal Federal Governmental
General Forfeitures E-911 Inmates Funds TotalRevenues
Intergovernmental $ 0 $ 0 $ 0 $ 0 $ 162,889 $ 162,889 Charges for Services 1,577,875 0 750,481 1,362,795 498,946 4,190,097 Fines and Forfeitures 0 66,370 0 0 218,293 284,663 Interest Revenue 21,394 207 2,380 82 2,091 26,154 Miscellaneous 104,388 0 0 0 108,892 213,280
Total Revenues 1,703,657 66,577 752,861 1,362,877 991,111 4,877,083
ExpendituresPublic Safety:
Personnel Services 35,695,083 39,047 407,116 0 314,064 36,455,310 Operating Expenditures 5,700,691 0 329,809 0 574,730 6,605,230 Capital Outlay 1,217,704 0 2,396 0 34,022 1,254,122
Court Services:Personal Services 943,723 0 0 0 0 943,723 Operating Expenditures 261,136 0 0 0 0 261,136
(Total Expenditures) (43,818,337) (39,047) (739,321) 0 (922,816) (45,519,521)
(Deficiency) Excess ofRevenues (Under) OverExpenditures (42,114,680) 27,530 13,540 1,362,877 68,295 (40,642,438)
Other FinancingSources (Uses)
Transfers in:Hernando County,
Florida, Board ofCounty CommissionersAppropriations 42,918,246 0 0 0 0 42,918,246
Transfers (out):Hernando County,
Florida, Board ofCounty Commissioners:
Excess Fees (803,566) 0 0 0 0 (803,566)Total Other Financing
Sources (Uses) 42,114,680 0 0 0 0 42,114,680 Net Change in Fund Balance 0 27,530 13,540 1,362,877 68,295 1,472,242 Fund Balance, Beginning
of Year 0 805,022 694,398 0 1,174,370 2,673,790 Fund Balance, End of Year $ 0 $ 832,552 $ 707,938 $ 1,362,877 $ 1,242,665 $ 4,146,032
FOR THE YEAR ENDED SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEGOVERNMENTAL FUNDS
See accompanying notes.5
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Charges for Services 1,759,835$ 1,559,835$ 1,577,875$ 18,040$ Interest Revenue 22,500 22,500 21,394 (1,106) Miscellaneous 72,750 72,750 104,388 31,638
Total Revenues 1,855,085 1,655,085 1,703,657 48,572
ExpendituresPublic Safety:
Personnel Services 37,334,165 36,003,065 35,695,083 307,982 Operating Expenditures 5,483,597 5,735,317 5,700,691 34,626 Capital Outlay 175,000 1,254,380 1,217,704 36,676
Court Services:Personnel Services 944,519 954,519 943,723 10,796 Operating Expenditures 261,800 251,800 261,136 (9,336)
(Total Expenditures) (44,199,081) (44,199,081) (43,818,337) 380,744
(Deficiency) of Revenues (Under)Expenditures (42,343,996) (42,543,996) (42,114,680) 429,316
Other Financing Sources (Uses)Transfers in:
Hernando County, Florida, Board of County Commissioners Appropriations 42,918,246 42,918,246 42,918,246 0
Transfers (out):Hernando County, Florida, Board
of County Commissioners:Excess Fees (574,250) (374,250) (803,566) (429,316)
Total Other Financing Sources (Uses) 42,343,996 42,543,996 42,114,680 (429,316)
Net Change in Fund Balance 0 0 0 0
Fund Balance, Beginning of Year 0 0 0 0
Fund Balance, End of Year 0$ 0$ 0$ 0$
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
Budget
HERNANDO COUNTY, FLORIDASHERIFF
BUDGET AND ACTUAL - GENERAL FUNDFOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.6
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Fines and Forfeitures 0$ 0$ 66,370$ 66,370$ Interest Revenue 0 0 207 207
Total Revenues 0 0 66,577 66,577
ExpendituresPublic Safety:
Personnel Services 71,525 71,525 39,047 32,478 Capital Outlay 100,000 100,000 0 100,000
(Total Expenditures) (171,525) (171,525) (39,047) 132,478
Excess of Revenues Over Expenditures (171,525) (171,525) 27,530 199,055
Other Financing (Uses) SourcesReserve for Contingencies (633,497) (633,497) 0 633,497
Net Change in Fund Balance (805,022) (805,022) 27,530 832,552
Fund Balance, Beginning of Year 805,022 805,022 805,022 0
Fund Balance, End of Year 0$ $ 0 $ 832,552 832,552$
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Budget
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - FEDERAL FORFEITURES FUND
See accompanying notes.7
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Charges for Services 740,000$ 740,000$ 750,481$ 10,481$ Interest Revenue 0 0 2,380 2,380
Total Revenues 740,000 740,000 752,861 12,861
ExpendituresPublic Safety:
Personnel Services 427,573 427,573 407,116 20,457 Operating Expenditures 439,650 439,650 329,809 109,841 Capital Outlay 350,000 350,000 2,396 347,604
(Total Expenditures) (1,217,223) (1,217,223) (739,321) 477,902
Excess of Revenues Over Expenditures (477,223) (477,223) 13,540 490,763
Other Financing (Uses) SourcesReserve for Contingencies (217,175) (217,175) 0 217,175
Net Change in Fund Balance (694,398) (694,398) 13,540 707,938
Fund Balance, Beginning of Year 694,398 694,398 694,398 0
Fund Balance, End of Year 0$ 0$ 707,938$ 707,938$
HERNANDO COUNTY, FLORIDASHERIFF
Budget
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - E-911 FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.8
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Charges for Services 0$ 1,400,000$ 1,362,795$ (37,205)$ Interest Revenue 0 0 82 82
Total Revenues 0 1,400,000 1,362,877 (37,123)
ExpendituresPublic Safety:
0 0 0 0 (Total Expenditures) 0 0 0 0
Excess of RevenuesOver Expenditures 0 1,400,000 1,362,877 (37,123)
Other Financing Sources (Uses)Reserves 0 (1,400,000) 0 1,400,000
Net Change in Fund Balance 0 0 1,362,877 1,362,877
Fund Balance, Beginning of Year 0 0 0 0
Fund Balance, End of Year 0$ 0$ 1,362,877$ 1,362,877$
Budget
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - FEDERAL INMATES FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.9
Internal Service
AssetsCash with Fiscal Agent $ 5,322,304 Accounts Receivable 51,820
Total Assets 5,374,124
LiabilitiesAccounts Payable 365,074 Liability for Unpaid Claims 297,063 Unearned Revenue 358,666
Total Liabilities 1,020,803
Net PositionUnrestricted 4,353,321
Total Net Position $ 4,353,321
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF NET POSITIONPROPRIETARY FUND TYPE - INTERNAL SERVICE FUND
SEPTEMBER 30, 2016
See accompanying notes.10
InternalService
Operating RevenuesInterfund Charges 4,007,080$ Premiums - Employees 710,785 Premiums - Retirees 474,476 Miscellaneous 110,905
Total Operating Revenues 5,303,246
Operating ExpensesClaims 4,440,229 Professional Services 584,829 Insurance 245,833
(Total Operating Expenses) (5,270,891)
Operating Income 32,355
Nonoperating RevenuesInterest 2,615
Change in Net Position 34,970
Net Position, Beginning of Year 4,318,351
Net Position, End of Year 4,353,321$
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITIONPROPRIETARY FUND TYPE - INTERNAL SERVICE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.11
InternalService
Cash Flows From Operating ActivitiesCash Received from Interfund Charges 4,025,666$ Cash Received from Employees 710,785 Cash Received from Retirees 474,476 Other Cash Receipts 110,905 Payments to Suppliers (830,662) Claims Paid (4,767,370)
Net Cash Provided by Operating Activities (276,200)
Cash Flows From Investing ActivitiesInterest Received 2,615
Net Increase in Cash (273,585)
Cash, Beginning of Year 5,595,889
Cash, End of Year 5,322,304$
Reconciliation of Operating Income to Net Cash Provided by Operating Activities
Operating Income 32,355$ Adjustment to Reconcile Operating Income to Net Cash
Provided by Operating Activities:Changes in Assets and Liabilities:
Decrease in Accounts Receivable 23,719 (Decrease) in Accounts Payable (327,899) (Decrease) in Liability for Unpaid Claims (22,961) Increase in Unearned Revenue 18,586
Total Adjustments (308,555)
Net Cash Provided by Operating Activities (276,200)$
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF CASH FLOWSPROPRIETARY FUND TYPE - INTERNAL SERVICE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.12
AssetsCash and Cash Equivalents 103,838$
Total Assets 103,838
LiabilitiesAccounts Payable 40,212 Due to Other Funds 32,334 Due to Other Governments 10,566 Deposits 20,726
Total Liabilities 103,838$
SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDS
13
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
Note 1 - Summary of Significant Accounting Policies Reporting Entity Hernando County, Florida, (the County) is a political subdivision of the State of Florida. It is
governed by an elected Board of County Commissioners (the Board) and managed by an appointed County Administrator. The Hernando County, Florida, Sheriff (the Sheriff), is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 129, Florida Statutes, the Sheriff’s budget is submitted to the Board for approval.
The Sheriff is the chief law enforcement officer of the County. Funding for the Sheriff’s
operations comes primarily from annual appropriations from the Board and all unexpended proceeds must be returned to the Board at year-end.
For financial reporting purposes, the Sheriff is deemed to be part of the primary government of
the County and, as such, is included in the County’s Comprehensive Annual Financial Report. Basis of Presentation The accompanying financial statements include all the funds and accounts of the Sheriff’s office,
but are not intended to be a complete presentation of the County as a whole. Except for this matter, they are otherwise in conformity with accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(4), Rules of the Auditor General—Local Governmental Entity Audits.
The financial transactions of the Sheriff are recorded in individual funds. Each fund is accounted
for by providing a separate set of self-balance accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. These funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with specific regulations, restrictions, or limitations.
The focus of governmental fund financial statements is on major funds rather than reporting funds
by type. GAAP sets forth minimum criteria (percentage of total assets, liabilities, revenues, or expenditures) for the determination of major funds. Each major fund is reported in a separate column.
The Sheriff reports the following major governmental funds: ■ General Fund—The General Fund is used to account for the general operations of the
Sheriff and includes all transactions which are not accounted for in another fund. ■ Federal Forfeitures Fund—This fund is used to account for forfeited property passed down
from the U.S. Department of Justice or by the U.S. Immigration and Customs Enforcement. Utilization of revenue can include enhancements to law enforcement delivery and operations.
14
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Basis of Presentation (Concluded) ■ E-911 Fund—This fund is used to account for the proceeds of telephone charges collected
for the installation and operation of an Emergency 911 System. ■ Federal Inmates Fund—This fund is used to account for the proceeds of housing federal
inmates at the detention facility, as well as associated guard and transport reimbursements. The Sheriff also reports the following nonmajor special revenue funds: ■ 800 MHz Fund ■ Inmate Welfare Fund ■ Law Enforcement Educational Fund ■ Child Saver Program Fund ■ Grants and Contributions Fund The Sheriff reports the following other fund types: ■ Proprietary Fund Type—Internal Service Funds These funds are used to account for health and dental insurance benefits provided to the
employees by the Sheriff. Their funding is based upon an annual actuarial study of expected benefit payouts.
■ Fiduciary Fund Type—Agency Funds These funds are used to account for assets held by the Sheriff in a trustee capacity or as an
agent for individuals, private organizations, and other governments. Measurement Focus and Basis of Accounting Governmental funds are accounted for using the flow of current financial resources measurement
focus. Only current assets and current liabilities, generally, are included on the balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus.
The modified accrual basis of accounting is used by both governmental and agency funds. Under
the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Sheriff considers revenues to be available if they are collected within 60 days after year-end. Grants must also meet eligibility requirements to be accrued.
15
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Measurement Focus and Basis of Accounting (Concluded) For governmental funds, expenditures are recorded when the related fund liability is incurred,
except for certain compensated absences, which are recognized as expenditures when paid. Substantially all of the Sheriff’s operating budget funding is appropriated by the Board. These resources are reflected as other financing sources at the time of receipt. Interest and other revenue are recognized as they are earned and become measurable and available to pay liabilities of the current period.
The proprietary fund type - internal service fund accounts for medical insurance coverage for the
Sheriff’s employees. Proprietary fund types use the accrual basis of accounting, where revenues are recognized when they are earned and expenses are recognized when they are incurred, regardless of the timing of related cash flows. In addition, proprietary funds distinguish operating revenues and expenses from nonoperating items.
The focus on fiduciary type fund financial statements is by fund-type, not major fund. The Sheriff
only has one fiduciary fund-type, the agency fund-type. Accordingly, there is only one column in the fiduciary fund financial statement.
Excess Fees Florida Statutes provide that the amount by which revenues and transfers exceed annual
expenditures be remitted to the Board within one month following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. This requirement is reflected in the Sheriff’s General Fund where the amount of this distribution is recorded as a liability and as another financing use.
Cash Equivalents Cash equivalents are defined as highly-liquid investments with original maturities of three
months or less. Prepaid Items Certain prepayments to vendors reflect costs applicable to future accounting periods. These
prepayments are recorded as expenditures in the year paid.
Deferred Inflows/Unearned Revenue Deferred inflows in governmental funds represent revenues that have been earned, but are not
available (because they were received more than 60 days after year-end). Unearned revenue in proprietary fund types represents revenues attributable to future periods.
Compensated Absences
Eligible full time employees are entitled to accrue compensatory time, annual vacation, and sick leave up to predetermined thresholds, and received pay for those hours at termination or retirement. Effective October 1, 2009, for terminations in good standing, the employee is paid for 25% of accumulated sick leave up to a total of 500 hours. Upon retirement, the employee is entitled to an additional percentage up to a total of 100% of total accumulated hours if the employee had ten or more years of service as of October 1, 2009, or 50% of up to 500 hours if the employee had less than ten years of service at October 1, 2009. For all payments of sick leave, the employee is paid at their pay rate effective at termination or retirement.
16
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Compensated Absences (Concluded)
Vacation and sick leave payments are included in personnel services when the payments are made to the employees. The Sheriff does not, nor is he legally required to accumulate financial resources for these obligations. Accordingly, the liability for compensated absences is not reported in the governmental funds but rather is reported in the basic financial statements of the County. Fund Balances
The Sheriff implemented the provisions of GASB issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54) in 2011, as required. The purpose of GASB 54 was to improve the consistency and usefulness of fund balance information to the financial statement user. The statement established fund balance classifications that comprise a hierarchy based primarily on the extent to which the organization is bound to honor constraints on the specific purpose for which amounts in the funds can be spent. Fund balance is reported in five components―nonspendable, restricted, committed, assigned, and unassigned:
■ Nonspendable―This component of fund balance consists of amounts that cannot be spent
because: (a) they are not expected to be converted to cash; or (b) they are legally or contractually required to remain intact. Examples of this classification are prepaid items, inventories, and principal (corpus) of an endowment fund.
■ Restricted―This component of fund balances consists of amounts that are constrained either:
(a) externally by third parties (creditors, grantors, contributors, or laws or regulations of other governments); or (b) by law through constitutional provisions or enabling legislation.
■ Committed―This component of fund balance consists of amounts that can only be used for
specific purposes pursuant to constraints imposed by formal action (e.g., policy) of the organization’s governing authority. By statute, the Sheriff himself is the governing authority. These committed amounts cannot be used for any other purpose unless the Sheriff removes or changes the specified use by taking the same type of action (e.g., policy) he employed to constrain those amounts.
■ Assigned―This component of fund balance consists of amounts that are constrained by a less-
than-formal action of the organization’s governing authority, or by an individual or body to whom the governing authority has delegated this responsibility. The Sheriff has not delegated the responsibility to assign fund balances to any individual or body.
■ Unassigned―This classification is used for: (a) negative unrestricted fund balances in any
governmental fund; or (b) fund balances within the General Fund that are not restricted, committed, or assigned.
When both restricted and unrestricted resources are available for use, it is generally the
Sheriff’s policy to use unrestricted resources first (committed, assigned, and unassigned) then restricted resources as they are needed. When unrestricted resources (committed, assigned, and unassigned) are available for use, it is generally the Sheriff’s policy to use unassigned resources first, then assigned, and then committed as needed.
17
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued)
Note 1 - Summary of Significant Accounting Policies (Concluded) Use of Estimates The preparation of financial statements in accordance with generally accepted accounting
principles, requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from those estimates.
Governmental Accounting Standards Board (GASB) Statement No. 68 The Sheriff participates in the Florida Retirement System (FRS) defined benefit pension plan and the Health Insurance Subsidy (HIS) defined benefit plan administered by Florida Division of Retirement. As a participating employer, the Sheriff implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, which requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers’ proportionate share of the net pension liabilities and related pension amounts of the defined benefit pension plans. However, these liabilities would be recorded in government-wide financial statements, which are not required in this special-purpose presentation. As such, only the applicable disclosures required by GASB 68 have been presented herein. In addition, the cost-sharing multiple-employer plans mentioned above operate on a fiscal year ended June 30.
Note 2 - Budgetary Process
Florida Statutes, Sections 30.49, 129.021, and 129.03 govern the preparation, adoption, and administration of the Sheriff’s annual budget. The Sheriff prepares individual budgets for the General Fund and the E-911 and 800 MHz Special Revenue Funds, and submits them to the Board for approval. Any budgets that are not subject to the approval of the Board of County Commissioners shall follow the same procedures as those approved by the Board with the exception that the Sheriff is the approver rather than the Board. The budgets are prepared on a basis consistent with GAAP and serve as the legal authorization for expenditures. Amendments increasing total fund expenditures must be approved by the Sheriff and/or Board. Budgetary changes between or among expenditures within a fund may be made at the discretion of the Sheriff.
The original budget is the first complete appropriated budget. The final budget is the original
budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year and approved by the Board within 60 days after year-end.
Note 3 - Cash and Investments
At September 30, 2016, the carrying value of the Sheriff’s cash and cash equivalents was as follows:
Carrying Value Cash on Hand $ 12,140 Demand Deposits 7,432,008 Total Cash and Cash Equivalents $ 7,444,148
18
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued)
Note 3 - Cash and Investments (Concluded) Such amounts are reported as $6,918,098, $422,212, and $103,838 in the governmental, internal
service, and agency funds, respectively. In addition, there is cash of $4,900,092 held by the claims administrator reported in the internal service funds at year-end.
The Sheriff’s bank deposits are held in qualified public depositories (QPDs) pursuant to
Chapter 280, Florida Statutes. Under this Chapter, each QPD is required to pledge collateral to the State Treasurer against the public deposits. In the event of default by a QPD, all claims for public deposits would be satisfied by the State Treasurer from the proceeds of federal deposit insurance, pledged collateral of the QPD in default and, if necessary, assessments against other QPDs of the same type as the depositor in default.
Authorized Investments
The Sheriff has not adopted an investment policy and so, by statute, follows the state’s guidance set forth in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. That section requires local governments without written investment policies, including County officers, to follow the state policy in Section 218.415(17), Florida Statutes. That Section authorizes the following investments: a. The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool
authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Florida Statute 163.01.
b. Securities and Exchange Commission registered money market funds with the highest credit
quality rating from a nationally recognized rating agency.
c. Interest-bearing time deposits or savings accounts in qualified public depositories.
d. Direct obligations of the United States Treasury. The Sheriff does not have policies that address credit risk, custodial credit risk, or interest rate
risk. The Sheriff had no investments at year-end or during the year. Note 4 - Interfund Balances Interfund balances at September 30, 2016, consisted of the following: Interfund Interfund Receivable Payable General Fund $ 21,500 $ 0 Inmate Welfare Fund 10,834 0 Agency Fund 0 32,334 Total Due to/Due from Other Funds $ 32,334 $ 32,334 The receivables represent primarily fees collected in an agency fund for other funds. These fees
are from jail inmates for subsistence fees, booking fees, medical fees, and commissions on commissary sales.
19
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued) Note 5 - Capital Assets Pursuant to Florida Statutes, the Sheriff can own tangible capital assets, and the Sheriff maintains
custody and recordkeeping responsibility for these assets. However, office space and facilities used in the Sheriff’s operations are provided at no cost by the Board.
Capital assets paid for by the Sheriff are recorded as expenditures in the governmental funds of
the Sheriff but are capitalized in the basic financial statements of the County. The capitalization threshold is $1,000. Donated capital assets are recorded at their estimated fair value on the date received. Effective October 1, 2010, the Sheriff is responsible for recording all grant-related assets regardless of whether the grant origin was Hernando County or the Sheriff. Depreciation is recorded at the County level. Most of the capital assets listed below are being depreciated over five years.
Capital asset activity for the tangible property over which the Sheriff has custodial and
recordkeeping responsibility, for the year ended September 30, 2016, was as follows: Balance October 1, September 30, 2015 Additions Deletions 2016 Automobiles and Other Vehicles $ 8,231,363 $ 745,623 $ (328,682) $ 8,648,304 Furniture and Equipment 10,998,072 846,347 (392,750) 11,451,669 Total at Cost 19,229,435 1,591,970 (721,432) 20,099,973 (Less Accumulated Depreciation) (14,365,622) (1,584,484) 702,848 (15,247,258) Book Value $ 4,863,813 $ 7,486 $ (18,584) $ 4,852,715 Proceeds from the sale or disposal of vehicles are netted against capital outlay in the accompanying statement of revenues, expenditures, and changes in fund balance. Following is a reconciliation of 2016 capital asset additions above to capital outlay on the accompanying statement of revenues, expenditures, and changes in fund balance: 2016 Capital Outlay $ 1,251,726 Proceeds from Vehicle Sales/Disposals 52,634 Purchased by Other Entities 287,610 Total Additions $ 1,591,970
Note 6 - Long-term Liability
The following is a summary of changes in general long-term liabilities, which are reported in the basic financial statements of the County:
Balance Balance October 1, September 30, 2015 Additions Retirements 2016 Accrued Compensated Absences $ 3,448,678 $ 2,334,673 $ (2,485,956) $ 3,297,395
20
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued)
Note 6 - Long-term Liability (Concluded)
Of these above obligations, $2,795,561 are expected to be paid during the fiscal year ending September 30, 2017, primarily from the general fund, and so are considered current. These liabilities are not reported in the fund financial statements of the Sheriff since they have not matured.
Note 7 - Detention Operations For twenty-two years, the Hernando County jail was operated by a private corporation. Effective
August 27, 2010, the Sheriff took over the detention operations based on an Interlocal Agreement between the Sheriff and the Board. The initial term of the agreement was through September 30, 2013, with an automatic renewal period of an additional three years.
Note 8 - General Fund Expenditures
General Fund Revenues and Expenditures for the year ended September 30, 2016, were as follows: Law Emergency Total Enforcement Detention Management Courthouse
Revenues Dispatching Fees $ 499,731 $ 499,731 $ 0 $ 0 $ 0 School Resource Officers 572,260 572,260 0 0 0 School Crossing Guards 152,357 152,357 0 0 0 Inmate Booking 58,409 0 58,409 0 0 Inmate Medical 40,644 0 40,644 0 0 Inmate Subsistence 172,769 0 172,769 0 0 Inmate Public Works 60,905 0 60,905 0 0 Inmate Social Security 20,800 0 20,800 0 0 Charges for Services 1,577,875 1,224,348 353,527 0 0 Interest Income 21,394 21,394 0 0 0 Miscellaneous 104,388 104,388 0 0 0 Total Revenues $ 1,703,657 $ 1,350,130 $ 353,527 $ 0 $ 0
Expenditures Personal Services $36,638,806 $ 25,315,749 $ 10,083,165 $ 296,169 $ 943,723 Operating Expenditures 5,961,827 3,590,874 2,067,542 42,275 261,136 Capital Outlay 1,217,704 1,141,527 76,177 0 0 Total Expenditures $43,818,337 $ 30,048,150 $ 12,226,884 $ 338,444 $ 1,204,859
21
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued)
Note 9 - Employee Retirement Plan
General Information about the Florida Retirement System (FRS) The FRS was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees. The FRS was amended in 1998 to add the Deferred Retirement Option Program (DROP) under the defined benefit plan and amended in 2000 to provide a defined contribution plan alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined contribution pension plan is the FRS Investment Plan. Chapter 112, Florida Statutes, established the Retiree Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit pension plan, to assist retired members of any state-administered retirement system in paying the costs of health insurance.
Essentially all regular employees of the Sheriff are eligible to enroll as members of the State-administered FRS. Provisions relating to FRS are established by Chapters 121 and 122, Florida Statutes; Chapter 112 Part IV, Florida Statutes; Chapter 238, Florida Statutes; and FRS Rules, Chapter 60S, Florida Administrative Code; wherein eligibility, contributions, and benefits are defined and described in detail. Such provisions may be amended at any time by further action from the Florida Legislature. The FRS is a single retirement system administered by the Florida Department of Management Services, Division of Retirement, and consists of two cost-sharing, multiple-employer defined-benefit plans and other nonintegrated programs. A comprehensive annual financial report of the FRS, which includes its financial statements, required supplementary information, actuarial report, and other relevant information, is available from the Florida Department of Management Services’ web site (www.dms.myflorida.com). The Sheriff’s contributions to the FRS Plan totaled $4,451,020 for the fiscal year ended September 30, 2016, (all plans).
FRS Pension Plan Plan Description. The FRS Pension Plan (Plan) is a cost-sharing multiple-employer defined benefit pension plan, with a DROP for eligible employees. The general classes of membership applicable to the Sheriff are as follows: ■ Regular Class―Members of the FRS who do not qualify for membership in the other classes. ■ Elected County Officer Class―Members who hold specified elective offices in local
government. ■ Senior Management Service Class―Members in senior management level positions.
■ Special Risk Class―Members who are employed as law enforcement officers and meet the
criteria to qualify for this class.
22
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SHERIFF SEPTEMBER 30, 2016
(Continued)
Note 9 - Employee Retirement Plan (Continued)
FRS Pension Plan (Continued) Plan Description. (Concluded) Employees enrolled in the Plan prior to July 1, 2011, vest at six years of creditable service and employees enrolled in the Plan on or after July 1, 2011, vest at eight years of creditable service. All vested members enrolled prior to July 1, 2011, are eligible for normal retirement benefits at age 62 or at any age after 30 years of service, except for members classified as special risk who are eligible for normal retirement benefits at age 55 or at any age after 25 years of service. All members enrolled in the Plan on or after July 1, 2011, once vested, are eligible for normal retirement benefits at age 65 or any time after 33 years of creditable service, except for members classified as special risk who are eligible for normal retirement benefits at age 60 or at any age after 30 years of service. Members of the Plan may include up to four years of credit for military service toward creditable service. The Plan also includes an early retirement provision; however, there is a benefit reduction for each year a member retires before his or her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-of-living adjustments to eligible participants. DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal retirement under the Plan to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in DROP for a period not to exceed 60 months after electing to participate, except that certain instructional personnel may participate for up to 96 months. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not include amounts for DROP participants, as these members are considered retired and are not accruing additional pension benefits. Benefits Provided. Benefits under the Plan are computed on the basis of age and/or years of service, average final compensation, and service credit. Credit for each year of service is expressed as a percentage of the average final compensation. For members initially enrolled before July 1, 2011, the average final compensation is the average of the five highest fiscal years’ earnings; for members initially enrolled on or after July 1, 2011, the average final compensation is the average of the eight highest fiscal years’ earnings. The total percentage value of the benefit received is determined by calculating the total value of all service, which is based on the retirement class to which the member belonged when the service credit was earned. Members are eligible for in-line-of-duty or regular disability and survivors’ benefits. The following chart shows the percentage value for each year of service credit earned:
23
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SHERIFF SEPTEMBER 30, 2016
(Continued)
Note 9 - Employee Retirement Plan (Continued) FRS Pension Plan (Continued) Benefits Provided. (Concluded)
Class, Initial Enrollment, and Percent Retirement Age/Years of Service Value Regular Class Members Initially Enrolled Before July 1, 2011: Retirement up to age 62 or up to 30 years of service 1.60 Retirement at age 63 or with 31 years of service 1.63 Retirement at age 64 or with 32 years of service 1.65 Retirement at age 65 or with 33 or more years of service 1.68 Regular Class Members Initially Enrolled on or After July 1, 2011: Retirement up to age 65 or up to 33 years of service 1.60 Retirement at age 66 or with 34 years of service 1.63 Retirement at age 67 or with 35 years of service 1.65 Retirement at age 68 or with 36 or more years of service 1.68 Senior Management Service Class 2.00 Special Risk Regular: Service from December 1, 1970 through September 30, 1974 2.00 Service on and after October 1, 1974 3.00
As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by 3%. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. Contributions. The Florida Legislature establishes contribution rates for participating employers and employees. Contribution rates during the 2015-2016 fiscal year were as follows:
Class Employee Employer Employee Employer
FRS, Regular 3.00 5.56 3.00 5.80FRS, Senior Management Service 3.00 19.73 3.00 20.05FRS, Special Risk Regular 3.00 20.34 3.00 20.85DROP - Applicable to
Members from All of the Above Classes 0.00 11.22 0.00 11.33FRS, Reemployed Retiree (1) (1) (1) (1)
Note: (1) Contribution rates are dependent upon retirement class in which reemployed.
Year Ended June 30, 2016Percent of Gross Salary
Year Ended June 30, 2017Percent of Gross Salary
24
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SHERIFF SEPTEMBER 30, 2016
(Continued)
Note 9 - Employee Retirement Plan (Continued) FRS Pension Plan (Concluded) Contributions. (Concluded) The Sheriff’s contributions (employer only) to the Plan totaled $3,756,417 for the fiscal year ended September 30, 2016. This excludes the HIS defined benefit pension plan contributions. Pension Liabilities. The FRS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in October 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Sheriff’s proportionate share of the FRS net pension liability was $17,624,639. Further details of the FRS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report. HIS Pension Plan Plan Description. The HIS Pension Plan (HIS Plan) is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida Legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Florida Department of Management Services. Benefits Provided. For the fiscal year ended September 30, 2016, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS Plan benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Contributions. The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal years ended June 30, 2017 and 2016, the contribution rate was 1.66% of payroll respectively, pursuant to Section 112.363, Florida Statues. The Sheriff contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. The Sheriff’s contributions to the HIS Plan totaled $419,351 for the fiscal year ended September 30, 2016.
25
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SHERIFF SEPTEMBER 30, 2016
(Continued)
Note 9 - Employee Retirement Plan (Continued)
HIS Pension Plan (Concluded) Pension Liabilities. The HIS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Sheriff’s proportionate share of the HIS net pension liability was $7,972,493. Further details of the HIS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report. FRS – Defined Contribution Pension Plan The Sheriff contributes to the FRS Investment Plan (Investment Plan), a defined contribution pension plan, for its eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the SBA, and is reported in the SBA’s annual financial statements and in the State of Florida Comprehensive Annual Financial Report. Service retirement benefits are based upon the value of the member’s account upon retirement. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. Sheriff employees participating in DROP are not eligible to participate in the Investment Plan. Employer and employee contributions, including amounts contributed to individual member’s accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Allocations to the investment members’ accounts during the 2014-15 fiscal year were as follows:
For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the FRS Pension Plan is transferred to the Investment Plan, the member must have the years of service required for FRS Pension Plan vesting (including the service credit represented by the transferred funds) to be
Percent of GrossCompensation
FRS, Regular 6.30FRS, Senior Management Service 7.67FRS, Special Risk Regular 14.00
Class
26
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SHERIFF SEPTEMBER 30, 2016
(Continued)
Note 9 - Employee Retirement Plan (Concluded) FRS – Defined Contribution Pension Plan (Concluded) vested for these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five year period, the employee will regain control over their account. If the employee does not return within the five year period, the employee will forfeit the accumulated account balance. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04% of payroll and by forfeited benefits of Investment Plan members. For the fiscal year ended September 30, 2015, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to the Sheriff. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income.
The Sheriff’s contributions to the Investment Plan totaled $275,252 for the fiscal year ended September 30, 2016.
Note 10 - Other Postemployment Benefits
The Sheriff offers postemployment health care benefits and life insurance to all retired former employees of the Sheriff’s Office and their eligible dependents. Participating retirees are required to reimburse the Sheriff for the entire premium cost. These retirees are receiving an “implicit subsidy” because the premium is a group rate which includes active, lower cost employees. The implicit subsidy has a cost which under GAAP is required to be disclosed in these financial statements. However, this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Sheriff’s Office. Accordingly, these calculations and disclosures can be found in the County-wide financial report.
In accordance with Florida Statutes 112.19(1)(g), if a law enforcement officer is killed as a result of an act of violence inflicted by another person while the officer is engaged in the performance of law enforcement duties, the entire premium of the health insurance plan for the officer’s surviving spouse, until remarried, and dependent children, is paid by the Sheriff. During the year ended September 30, 2016, $25,800 was paid on behalf of the survivors who qualified.
Note 11 - Risk Management The Sheriff participates in the Florida Sheriff’s Risk Management Fund to insure against
automobile, workers’ compensation, and general liabilities claims. Except as disclosed in the next paragraph, there have been no significant reductions in insurance coverage from the prior year. Settlement amounts have not exceeded insurance coverage for any of the last three years.
27
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Continued) Note 11 - Risk Management (Concluded) Effective October 1, 2011, the Sheriff became self-insured for employee and retiree health
coverage. Effective October 1, 2014, the Sheriff became self-insured for employee and retiree dental coverage. Prior to those dates, the Sheriff carried commercial insurance for its health and dental coverage.
Note 12 - Self-Insurance Internal Service Fund The self-insurance program was established under Florida Statute 112.08 to reduce employee
medical costs for the Sheriff’s Office. The program is administered by an outside third party, and uses a combination of self-insurance and specific and aggregate stop-loss coverage to minimize risk exposure. It is accounted for in an internal service fund. Fund revenues are primarily contributions from other funds, retirees, and employees, for amounts needed to pay insurance premiums, anticipated self-insured losses, and administrative expenses.
Changes in claims liability amounts for the years ended September 30, 2016 and 2015, were as follows: 2016 2015 Unpaid Claims, Beginning of Year $ 320,024 $ 251,998 Incurred Claims 4,744,409 3,690,198 Claim Payments (4,767,370) (3,622,172) Unpaid Claims, End of Year $ 297,063 $ 320,024
Note 13 - Leases Revenue of the 800 MHz Fund includes lease payments received for space leased on the County’s
primary tower site. The lease began December 16, 1997, between the Board and Cingular (Tenant). There have been several amendments since then, extending the lease term and changing the monthly lease payment. The sixth amendment, effective July 1, 2016, amended the lease term to include a new initial term of sixty months, plus up to five additional sixty-month terms, built-in rate increases at the beginning of each renewal term. AT&T Mobility Corporation, who owns New Cingular Wireless, has a reduced monthly lease payment from $5,407 to $4,210. The Board has informally assigned the rights to the lease revenue to the Sheriff to operate the system. The amount of the lease revenue for the year ended September 30, 2016, was $61,296. The future lease revenues are as follows:
Year Amount 2017 $ 50,520 2018 50,520 2019 50,520 2020 50,520 2021 52,415 2022-2026 292,669 2027-2031 336,569 2032-2036 387,054 2037-2041 445,112 2042-2046 482,665 Total $ 2,198,564
28
HERNANDO COUNTY, FLORIDA SHERIFF
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
(Concluded)
Note 14 - Claims and Contingencies Litigation The Sheriff is involved as defendant or plaintiff in certain litigation and claims arising from the
ordinary course of operations. Any judgments against the Sheriff in excess of insurance limits would be settled by the Board. In the opinion of the Sheriff and legal counsel, the range of potential recoveries or liabilities will not materially affect the financial position of the Sheriff.
Federal and State Grants Grant funds received by the Sheriff are subject to audit by grantor agencies. Audits of these
grants may result in the disallowed costs, which may constitute a liability of the Sheriff. In the opinion of management disallowed costs, if any, would be insignificant to the financial position and operations of the Sheriff.
SUPPLEMENTAL INFORMATION
Combining and Individual Fund Financial Statements and Schedules
HERNANDO COUNTY, FLORIDA SHERIFF
SPECIAL REVENUE FUNDS SEPTEMBER 30, 2016
Special revenue funds are used to account for the proceeds of special revenue sources that are legally restricted to specified purposes. The Sheriff has the following nonmajor special revenue funds: ■ 800MHz Fund—This fund derives its resources from lease payments for space leased on the County’s
primary tower site, fees assessed to each radio user department for maintenance contract costs, and a $12.50 fee included in each fine paid for a traffic citation. The 800MHz system is maintained to ensure continuous and optimum radio communications for all public safety and County radio users.
■ Inmate Welfare Fund—This fund derives its resources from inmate telephone and commissary
commissions. This fund has committee oversight and all approved expenditures must be for the benefit of the inmate. Florida Statute 945.215, Inmate Welfare and Employee Benefit Trust Funds, governs the use of proceeds and expenditures for this fund.
■ Law Enforcement Education Fund (L.E.E.)—This fund derives its resources from court cost
assessments pursuant to Sections 938.15 and 318.18 of the Florida Statutes. The assessments are collected by the Clerk of the Circuit Court and remitted to the Sheriff monthly. Use of the funds received is restricted to criminal justice education and training in programs approved by the Florida Police Training and Standards Commission.
■ Child Saver Program Fund—This fund derives its resources from funds received for the rental of
infant and toddler car seats. The nonrefundable service fees charged are to be used for the maintenance and repair of returned car seats and to assist in the purchase of additional seats to expand the program as the population of the County grows and there is additional demand for car seats.
■ Grants and Contributions Fund—This fund derives its resources from grants and donations. Each
grant and donation is separately accounted for within the fund, to assure proper accounting in accordance with the grant agreements.
29
TotalLaw Child Nonmajor
Inmate Enforcement Saver Grants and Governmental800MHz Welfare Education Program Contributions Funds
AssetsCash and Cash
Equivalents 206,141$ 419,734$ 464,973$ 5,394$ 99,742$ 1,195,984$ Accounts Receivable 0 20,312 0 0 0 20,312 Due from Other Funds 0 10,834 0 0 0 10,834 Due from Other
Governments 14,224 0 5,645 0 17,770 37,639 Total Assets 220,365 450,880 470,618 5,394 117,512 1,264,769
LiabilitiesAccounts Payable 8,294 1,576 0 60 360 10,290 Accrued Wages and
Benefits Payable 0 7,769 0 0 3,905 11,674 Deposits 0 0 0 140 0 140
Total Liabilities 8,294 9,345 0 200 4,265 22,104
Fund BalancesRestricted for:
Law EnforcementActivities 0 0 0 0 113,247 113,247
Communications 212,071 0 0 0 0 212,071 Education and
Training 0 0 470,618 0 0 470,618 Inmates Training 0 441,535 0 0 0 441,535 Other 0 0 0 5,194 0 5,194
Total Fund Balances 212,071 441,535 470,618 5,194 113,247 1,242,665
Total Liabilities andFund Balances 220,365$ 450,880$ 470,618$ 5,394$ 117,512$ 1,264,769$
Special Revenue Funds
SEPTEMBER 30, 2016
COMBINING BALANCE SHEET
HERNANDO COUNTY, FLORIDASHERIFF
NONMAJOR GOVERNMENTAL FUNDS
30
TotalLaw Child Grants Nonmajor
Inmate Enforcement Saver and Governmental800MHz Welfare Education Program Contributions Funds
RevenuesIntergovernmental 0$ 0$ 0$ 0$ 162,889$ 162,889$ Charges for Services 77,132 420,935 0 879 0 498,946 Fines and Forfeitures 145,124 0 73,169 0 0 218,293 Interest Revenue 74 936 339 0 742 2,091 Miscellaneous 61,296 3,693 0 0 43,903 108,892
Total Revenues 283,626 425,564 73,508 879 207,534 991,111
ExpendituresPublic Safety:
Personnel Services 0 200,713 0 0 113,351 314,064 Operating
Expenditures 350,421 105,097 49,112 0 70,100 574,730 Capital Outlay 0 0 0 0 34,022 34,022
(Total Expenditures) (350,421) (305,810) (49,112) 0 (217,473) (922,816)
Net Change inFund Balance (66,795) 119,754 24,396 879 (9,939) 68,295
Fund Balances,Beginning of Year 278,866 321,781 446,222 4,315 123,186 1,174,370
Fund Balances,End of Year $ 212,071 $ 441,535 $ 470,618 $ 5,194 $ 113,247 $ 1,242,665
Special Revenue Funds
FOR THE YEAR ENDED SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES,SHERIFF
AND CHANGES IN FUND BALANCENONMAJOR GOVERNMENTAL FUNDS
31
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Charges for Services 97,000$ 97,000$ 77,132$ (19,868)$ Fines and Forfeitures 180,000 180,000 145,124 (34,876) Interest Revenue 0 0 74 74 Miscellaneous 64,887 64,887 61,296 (3,591)
Total Revenues 341,887 341,887 283,626 (58,261)
ExpendituresPublic Safety:
Operating Expenditures 407,250 407,250 350,421 56,829 Capital Outlay 139,413 139,413 0 139,413
(Total Expenditures) (546,663) (546,663) (350,421) 196,242
(Deficiency) of Revenues (Under) Expenditures (204,776) (204,776) (66,795) 137,981
Other Financing (Uses) SourcesReserve for Contingencies (74,090) (74,090) 0 74,090
Net Change in Fund Balance (278,866) (278,866) (66,795) 212,071
Fund Balance, Beginning of Year 278,866 278,866 278,866 0
Fund Balance, End of Year 0$ 0$ 212,071$ 212,071$
HERNANDO COUNTY, FLORIDASHERIFF
Budget
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - 800 MHz FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
32
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Charges for Services 333,000$ 333,000$ 420,935$ 87,935$ Interest Revenue 100 100 936 836 Miscellaneous 2,900 2,900 3,693 793
Total Revenues 336,000 336,000 425,564 89,564
ExpendituresPublic Safety:
Personnel Services 204,943 204,943 200,713 4,230 Operating Expenditures 193,983 193,983 105,097 88,886 Capital Outlay 25,000 25,000 0 25,000
(Total Expenditures) (423,926) (423,926) (305,810) 118,116
Excess of Revenues Over Expenditures (87,926) (87,926) 119,754 207,680
Other Financing Sources (Uses)Reserve for Contingencies (233,855) (233,855) 0 233,855
Net Change in Fund Balance (321,781) (321,781) 119,754 441,535
Fund Balance, Beginning of Year 321,781 321,781 321,781 0
Fund Balance, End of Year 0$ 0$ 441,535$ 441,535$
Budget
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - INMATE WELFARE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
33
VarianceWith Final
BudgetBudget Positive
Original Final Actual (Negative)Revenues
Fines and Forfeitures 73,000$ 73,000$ 73,169$ 169$ Interest Revenue 250 250 339 89
Total Revenues 73,250 73,250 73,508 258
ExpendituresPublic Safety:
Operating Expenditures 46,850 46,850 49,112 (2,262) (Total Expenditures) (46,850) (46,850) (49,112) (2,262)
Excess of Revenues Over Expenditures 26,400 26,400 24,396 (2,004)
Other Financing (Uses) SourcesReserve for Contingencies (472,622) (472,622) 0 472,622
Net Change in Fund Balance (446,222) (446,222) 24,396 470,618
Fund Balance, Beginning of Year 446,222 446,222 446,222 0
Fund Balance, End of Year 0$ 0$ 470,618$ 470,618$
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - LAW ENFORCEMENT EDUCATION FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
34
VarianceWith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Intergovernmental 136,873$ 241,508$ 162,889$ (78,619)$ Interest Revenue 50 50 742 692 Miscellaneous 25,500 43,403 43,903 500
Total Revenues 162,423 284,961 207,534 (77,427)
ExpendituresPublic Safety:
Personnel Services 93,561 177,215 113,351 63,864 Operating Expenditures 47,365 107,249 70,100 37,149 Capital Outlay 45,522 45,522 34,022 11,500
(Total Expenditures) (186,448) (329,986) (217,473) 112,513
(Deficiency) of Revenues (Under) Expenditures (24,025) (45,025) (9,939) 35,086
Other Financing (Uses) SourcesReserve for Contingencies (99,161) (78,161) 0 78,161
Net Change in Fund Balance (123,186) (123,186) (9,939) 113,247
Fund Balance, Beginning of Year 123,186 123,186 123,186 0
Fund Balance, End of Year 0$ 0$ 113,247$ 113,247$
Budget
HERNANDO COUNTY, FLORIDASHERIFF
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - GRANTS AND CONTRIBUTIONS FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA SHERIFF
INTERNAL SERVICE FUNDS SEPTEMBER 30, 2016
Internal service funds are used when a fund primarily provides benefits for other funds, departments, or agencies of the primary government. The Sheriff has the following internal service funds: ■ Health—This fund is used to account for the Sheriff’s self-insurance program for employee health
benefits. ■ Dental—This fund is used to account for the Sheriff’s self-insurance program for employee dental
benefits.
35
TotalInternal
Health Dental ServiceAssets
Cash with Fiscal Agent $ 5,200,131 $ 122,173 $ 5,322,304 Accounts Receivable 51,820 0 51,820
Total Assets 5,251,951 122,173 5,374,124
LiabilitiesAccounts Payable 352,647 12,427 365,074 Liability for Unpaid Claims 274,532 22,531 297,063 Unearned Revenue 338,075 20,591 358,666
Total Liabilities 965,254 55,549 1,020,803
Net PositionUnrestricted 4,286,697 66,624 4,353,321
Total Net Position $ 4,286,697 $ 66,624 $ 4,353,321
HERNANDO COUNTY, FLORIDASHERIFF
COMBINING STATEMENT OF NET POSITIONINTERNAL SERVICE FUNDS
SEPTEMBER 30, 2016
36
TotalInternal
Health Dental ServiceOperating Revenues
Interfund Charges $ 3,840,898 $ 166,182 $ 4,007,080 Premiums - Employees 638,658 72,127 710,785 Premiums - Retirees 442,810 31,666 474,476 Miscellaneous 110,905 0 110,905
Total Operating Revenues 5,033,271 269,975 5,303,246
Operating ExpensesClaims 4,222,826 217,403 4,440,229 Professional Services 548,203 36,626 584,829 Insurance 245,833 0 245,833
(Total Operating Expenses) (5,016,862) (254,029) (5,270,891)
Operating Income 16,409 15,946 32,355
Nonoperating RevenuesInterest 2,615 0 2,615
Change in Net Position 19,024 15,946 34,970
Net Position, Beginning of Year 4,267,673 50,678 4,318,351
Net Position, End of Year 4,286,697$ 66,624$ 4,353,321$
HERNANDO COUNTY, FLORIDASHERIFF
COMBINING STATEMENT OF REVENUES, EXPENSES, AND
INTERNAL SERVICE FUNDSFOR THE YEAR ENDED SEPTEMBER 30, 2016
CHANGES IN FUND NET POSITION
37
TotalInternal
Health Dental Service
Cash Flows from Operating ActivitiesCash Received from Interfund Charges 3,857,875$ 167,791$ 4,025,666$ Cash Received from Employees 638,658 72,127 710,785 Cash Received from Retirees 442,810 31,666 474,476 Other Cash Receipts 110,905 0 110,905 Payments to Suppliers (794,036) (36,626) (830,662) Claims Paid (4,549,149) (218,221) (4,767,370)
Net Cash Provided by Operating Activities (292,937) 16,737 (276,200)
Cash Flows From Investing ActivitiesInterest Received 2,615 0 2,615
Net Increase in Cash (290,322) 16,737 (273,585)
Cash, Beginning of Year 5,490,450 105,439 5,595,889
Cash, End of Year 5,200,128$ 122,176$ 5,322,304$
Reconciliation of Operating Income to Net Cash Provided by Operating Activities
Operating Income 16,409$ 15,946$ 32,355$ Adjustment to Reconcile Operating Income to Net
Cash Provided by Operating Activities:Changes in Assets and Liabilities:
Decrease in Accounts Receivable 23,719 0 23,719 (Decrease) in Accounts Payable (315,854) (12,045) (327,899) (Decrease) Increase in Liability for Unpaid Claims (34,188) 11,227 (22,961) Increase in Unearned Revenue 16,977 1,609 18,586
Total Adjustments (309,346) 791 (308,555)
Net Cash Provided by Operating Activities (292,937)$ 16,737$ (276,200)$
HERNANDO COUNTY, FLORIDASHERIFF
COMBINING STATEMENT OF CASH FLOWSINTERNAL SERVICE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA SHERIFF
AGENCY FUNDS SEPTEMBER 30, 2016
Agency funds are used to account for assets held by the Sheriff in a trustee capacity or as an agent for individuals, private organizations, and other governments. The Sheriff has the following agency funds: ■ Civil Trust Fund—This fund is used to account for fees received by the Sheriff for serving documents
(civil process) pursuant to Florida Statute 30.231(5). The funds received are returned to the Board of County Commissioners on a monthly basis. This fund is also used for cost deposits provided by plaintiffs or their attorneys in advance, to pay for the Sheriff’s statutory fees and costs in executing Sheriff’s Levies and Writs of Attachment.
■ Inmate Trust Fund—This fund accounts for inmate personal accounts and the proceeds from certain
inmate programs.
38
Civil Inmate TotalTrust Trust AgencyFund Fund Funds
AssetsCash and Cash Equivalents 11,136$ 92,702$ 103,838$
Total Assets 11,136 92,702 103,838
LiabilitiesAccounts Payable 0 40,212 40,212 Due to Other Funds 0 32,334 32,334 Due to Other Governments 10,566 0 10,566 Deposits 570 20,156 20,726
Total Liabilities 11,136$ 92,702$ 103,838$
SEPTEMBER 30, 2016
HERNANDO COUNTY, FLORIDA
COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIESSHERIFF
ALL AGENCY FUNDS
OTHER REPORTS
39
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Al Nienhuis Sheriff Hernando County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Sheriff (the Sheriff), as of and for the year ended September 30, 2016, and the related notes to the financial statements, and have issued our report thereon dated January 6, 2017. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Sheriff’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstance for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Sheriff’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Sheriff’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
40
Honorable Al Nienhuis Sheriff Hernando County, Florida
INDEPENDENT AUDITORS’ 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
(Concluded) Compliance and Other Matters As part of obtaining reasonable assurance about whether the Sheriff’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreement, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. January 6, 2017 Sarasota, Florida
41
INDEPENDENT ACCOUNTANTS’ REPORT Honorable Al Nienhuis Sheriff Hernando County, Florida We have examined Hernando County, Florida, Sheriff’s (the Sheriff) compliance with the requirements of Section 218.415, Florida Statutes, as of and for the year ended September 30, 2016, as required by Section 10.556(10)(a), Rules of the Auditor General. Management is responsible for the Sheriff’s compliance with those requirements. Our responsibility is to express an opinion on the Sheriff’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Sheriff’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Sheriff’s compliance with specified requirements. In our opinion, the Sheriff complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Sheriff, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. January 6, 2017 Sarasota, Florida
42
MANAGEMENT LETTER Honorable Al Nienhuis Sheriff Hernando County, Florida Report on the Financial Statements We have audited the financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Sheriff (the Sheriff), as of and for the year ended September 30, 2016, and have issued our report thereon dated January 6, 2017. Auditors’ Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports We have issued our Independent Auditors’ 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; and Independent Accountants’ Report. Disclosures in those reports, which are dated January 6, 2017, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. In that regard, the Sheriff was established by the Constitution of the State of Florida, Article VIII, Section 1(d). There were no component units related to the Sheriff. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.
43
Honorable Al Nienhuis Sheriff Hernando County, Florida
MANAGEMENT LETTER (Concluded)
Other Matters (Concluded) Section 10.554(1)(i)3., Rules of Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of the Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Sheriff, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of our audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. January 6, 2017 Sarasota, Florida
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
PROPERTY APPRAISER HERNANDO COUNTY, FLORIDA
SEPTEMBER 30, 2016
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
PROPERTY APPRAISER HERNANDO COUNTY, FLORIDA
SEPTEMBER 30, 2016
TABLE OF CONTENTS Independent Auditors’ Report ................................................................................................................ 1-2 Financial Statements Balance Sheet - Governmental Funds ........................................................................................................ 3 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds .............................................................................................................. 4 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ......................................................................................... 5 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Graphics Information System Fund ...................................................... 6 Notes to Financial Statements .............................................................................................................. 7-20 Other Financial Information Combining Balance Sheet - Nonmajor Governmental Funds.................................................................. 21 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Nonmajor Governmental Funds .................................................................................. 22 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Addressing Fund ................................................................................. 23 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - GIS Business Units Fund .................................................................... 24 Other Reports Independent Auditors’ 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 ............................................................................................. 25-26 Independent Accountants’ Report ........................................................................................................... 27 Management Letter ............................................................................................................................. 28-29
1
INDEPENDENT AUDITORS’ REPORT Honorable John C. Emerson Property Appraiser Hernando County, Florida Report on the Financial Statements We have audited the accompanying financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Property Appraiser (the Property Appraiser), as of and for the year ended September 30, 2016, and the related notes to the financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements 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. Auditors’ 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 each major fund and the aggregate remaining fund information of the Property Appraiser, as of September 30, 2016, and the respective changes in financial position and budgetary comparisons for the year then ended in accordance with accounting principles generally accepted in the United States of America.
2
Honorable John C. Emerson Property Appraiser Hernando County, Florida
INDEPENDENT AUDITORS’ REPORT (Concluded)
Emphasis of Matter – Incomplete Presentation As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida (the Rules). In conformity with the Rules, the accompanying financial statements are intended to present the financial position, changes in financial position, and budgetary comparisons of each major fund and the aggregate remaining fund information, where applicable, only for that portion of the major funds and the aggregate remaining fund information of Hernando County, Florida, that is attributable to the Property Appraiser. They do not purport to, and do not, present fairly the financial position as a whole of Hernando County, Florida, as of September 30, 2016, and the changes in its financial position or budgetary comparisons for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Other Financial Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Property Appraiser’s financial statements. The other financial information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. The other financial information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other financial information is fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 18, 2016, on our consideration of the Property Appraiser’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 Property Appraiser’s internal control over financial reporting and compliance. November 18, 2016 Sarasota, Florida
See accompanying notes.3
GraphicsInformation Nonmajor
General System GovernmentalFund Fund Funds Total
AssetsCash and Cash Equivalents 147,078$ 933,195$ 54,321$ 1,134,594$
Total Assets 147,078 933,195 54,321 1,134,594
Liabilities and Fund Balances
LiabilitiesVouchers Payable 2,740 220 174 3,134 Due to the Hernando County, Florida,
Board of County Commissioners 141,230 0 53,899 195,129 Due to Other Governments 3,108 0 248 3,356
Total Liabilities 147,078 220 54,321 201,619
Fund BalancesCommitted for GIS Function 0 932,975 0 932,975
Total Fund Balances 0 932,975 0 932,975
Total Liabilities and Fund Balances 147,078$ 933,195$ 54,321$ 1,134,594$
SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER
BALANCE SHEETGOVERNMENTAL FUNDS
See accompanying notes.4
GraphicsInformation Nonmajor
General System GovernmentalFund Fund Funds Total
RevenuesIntergovernmental Revenues:
Hernando County, Florida, Board of County Commissioners 2,415,234$ 509,016$ 230,959$ 3,155,209$
Other Taxing Districts 53,157 125,823 0 178,980 Total Intergovernmental Revenues 2,468,391 634,839 230,959 3,334,189 Charges for Services 0 12,241 61,836 74,077 Interest 0 819 0 819 Miscellaneous 131 0 0 131
Total Revenues 2,468,522 647,899 292,795 3,409,216
ExpendituresGeneral Government:
Personal Services 1,972,561 369,705 196,913 2,539,179 Operating 327,981 158,482 39,825 526,288
Capital Outlay 23,642 11,245 1,910 36,797 (Total Expenditures) (2,324,184) (539,432) (238,648) (3,102,264)
Excess of Revenues over Expenditures 144,338 108,467 54,147 306,952
Other Financing (Uses) SourcesTransfers (out):
Distribution of Excess Fees to theHernando County, Florida, Board of County Commissioners (141,230) 0 (53,899) (195,129)
Distribution of Excess Fees toOther Taxing Districts (3,108) 0 (248) (3,356)
Total Other Financing (Uses) Sources (144,338) 0 (54,147) (198,485)
Net Change in Fund Balances 0 108,467 0 108,467
Fund Balance, Beginning of Year 0 824,508 0 824,508
Fund Balance, End of Year 0$ 932,975$ 0$ 932,975$
FOR THE YEAR ENDED SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEGOVERNMENTAL FUNDS
See accompanying notes.5
Variancewith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Intergovernmental Revenues:Hernando County, Florida,
Board of County Commissioners 2,415,234$ 2,415,234$ 2,415,234$ 0$ Other Taxing Districts 53,157 53,157 53,157 0
Miscellaneous 0 0 131 131 Total Revenues 2,468,391 2,468,391 2,468,522 131
ExpendituresGeneral Government:
Personal Services 2,065,859 2,004,609 1,972,561 32,048 Operating 373,114 439,364 327,981 111,383
Capital Outlay 19,418 24,418 23,642 776 Nonoperating 10,000 0 0 0
(Total Expenditures) (2,468,391) (2,468,391) (2,324,184) 144,207
Excess of Revenues over Expenditures 0 0 144,338 144,338
Other Financing (Uses) SourcesTransfers (out):
Distribution of Excess Fees to the Hernando County, Florida,Board of County Commissioners 0 0 (141,230) (141,230)
Distribution of Excess Fees toOther Taxing Districts 0 0 (3,108) (3,108)
Total Other Financing (Uses) Sources 0 0 (144,338) (144,338)
Net Change in Fund Balances 0 0 0 0
Fund Balance, Beginning of Year 0 0 0 0
Fund Balance, End of Year 0$ 0$ 0$ 0$
Budget
HERNANDO COUNTY, FLORIDAPROPERTY APPRAISER
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.6
Variancewith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Intergovernmental Revenues:Hernando County, Florida,
Board of County Commissioners 509,016$ 509,016$ 509,016$ 0$ Other Taxing Districts 125,823 125,823 125,823 0
Total Intergovernmental Revenues 634,839 634,839 634,839 0 Charges for Services 0 0 12,241 12,241 Interest 0 0 819 819
Total Revenues 634,839 634,839 647,899 13,060
ExpendituresGeneral Government:
Personal Services 449,294 449,294 369,705 79,589 Operating 157,045 174,298 158,482 15,816 Capital Outlay 28,500 11,247 11,245 2
(Total Expenditures) (634,839) (634,839) (539,432) 95,407
Net Change in Fund Balances 0 0 108,467 108,467
Fund Balance, Beginning of Year 0 0 824,508 824,508
Fund Balance, End of Year 0$ 0$ 932,975$ 932,975$
Budget
HERNANDO COUNTY, FLORIDAPROPERTY APPRAISER
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GRAPHICS INFORMATION SYSTEM FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
7
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
Note 1 - Summary of Significant Accounting Policies Reporting Entity Hernando County, Florida (the County), is a political subdivision of the State of Florida. It is
governed by an elected Board of County Commissioners (the Board) and managed by an appointed County Administrator. The Hernando County, Florida, Property Appraiser (the Property Appraiser) is an elected constitutional officer of the County as provided for by the Constitution of the State of Florida. Pursuant to Chapters 129 and 195, Florida Statutes, the Property Appraiser’s budget is submitted to the Florida Department of Revenue for approval, and a copy is forwarded to the Board for coordination with the Board’s budget.
Funding of the Property Appraiser’s Office comes from quarterly billings to the Board and other taxing districts in proportion to prior year taxes levied, or in the case of non-ad valorem districts, by other reasonable methods. By statute, municipalities and school boards are exempt. For financial reporting purposes, the Property Appraiser is deemed to be part of the primary government of the County and, as such, is included in the County’s Comprehensive Annual Financial Report.
Basis of Presentation The accompanying financial statements include all the funds and accounts of the Property
Appraiser’s office, but are not intended to be a complete presentation of the County as a whole. Except for this matter, they are otherwise in conformity with accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(4), Rules of the Auditor General—Local Governmental Entity Audits.
The financial transactions of the Property Appraiser are recorded in individual funds. Each
fund is accounted for by providing a separate set of self-balance accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. These funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with specific regulations, restrictions, or limitations.
The focus of governmental fund financial statements is on major funds rather than reporting
funds by type. GAAP sets forth minimum criteria (percentage of total assets, liabilities, revenues, or expenditures) for the determination of major funds. Each major fund is reported in a separate column.
The Property Appraiser reports the following major governmental funds: ■ General Fund—The general fund is used to account for the general operations of the
Property Appraiser and includes all transactions which are not accounted for in other funds. ■ Graphics Information System (GIS) Fund—This fund is used to account for revenue
received in accordance with a contract with the Board pursuant to Section 197.3632(2), Florida Statutes, which is designated to finance the establishment and maintenance of the GIS for Hernando County. Although neither the contract nor the law requires that a budget be prepared for the expenditures of these funds, the Property Appraiser prepares an annual budget internally for this revenue and follows the same recording and reporting procedures as those with legally required budgets for the purpose of management control.
8
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Basis of Presentation (Concluded) The Property Appraiser also reports the following nonmajor governmental funds: ■ County Fees and Commissions Fund—This fund is used to account for revenues and
expenditures pursuant to Section 119, Florida Statutes. The Property Appraiser uses this fund to track revenues and expenditures directly related to providing aerial maps, tax rolls, copies, and real property tags to the public.
■ Addressing Fund—The addressing fund was created to account for the revenues and
expenditures for the creation and maintenance of the County-wide addressing system. ■ Addressing Fees Fund—The addressing fees fund was created to account for the revenues
received under an agreement with the Board to provide address assignments, annual subscription renewal, and unnamed petition fees to the public.
■ GIS Business Units Fund—This fund was created in 2010 to account for the revenues and
expenditures for the purpose of completing all planning and environmental services GIS work-related products. The Property Appraiser serves as the lead GIS entity or agency and ensures the Units develop operating procedures for the maintenance and processing of planning department and environmental services GIS functions and needs.
Measurement Focus and Basis of Accounting Governmental funds are accounted for using the flow of current financial resources
measurement focus. Only current assets and current liabilities, generally, are included on the balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.
The modified accrual basis of accounting is used by governmental funds. Under the modified
accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Property Appraiser considers revenues to be available if they are collected within 45 days of the end of the current period. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured.
Substantially, all of the Property Appraiser’s revenue is received from taxing authorities. These
monies are generally unrestricted and are revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenue at the time of receipt; earlier if the susceptible to accrual criteria are met.
Charges for services and interest income are recognized when earned, provided they are also
measurable and available to pay liabilities of the current period. Interest income is reported net of fees.
9
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Measurement Focus and Basis of Accounting (Concluded) Florida Statutes provide that the amount by which revenues and transfers exceed annual
expenditures be credited back to the Board and other taxing districts in the quarter immediately following the fiscal year during which the revenue was recognized. Florida Statutes further provide that this excess be distributed to each governmental agency in the same proportion as the fees paid by each governmental agency bear to total fees revenues. The amount of this distribution is recorded as a liability and another financing use in the accompanying financial statements.
Cash Equivalents Cash equivalents are defined as highly liquid investments with original maturities of three
months or less. Compensated Absences All full-time employees of the Property Appraiser are entitled to paid time off. The employees
are generally allowed to accumulate paid time off up to a maximum of 320 hours. Upon termination, the employee is paid for accumulated and unused paid time off. Paid time off payments are included in expenditures in the period paid or due. The Property Appraiser does not, nor is he legally required to, accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the governmental funds, but rather is reported in the basic financial statements of the County.
Fund Balances
The Property Appraiser implemented the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, (GASB 54) in 2011, as required. The purpose of GASB 54 was to improve the consistency and usefulness of fund balance information to the financial statement user. The statement established fund balance classifications that comprise a hierarchy, based primarily on the extent to which the organization is bound to honor constraints on the specific purpose for which amounts in the funds can be spent. Fund balance is reported in five components - nonspendable, restricted, committed, assigned, and unassigned:
■ Nonspendable―This component of fund balance consists of amounts that cannot be spent
because: (a) they are not expected to be converted to cash; or (b) they are legally or contractually required to remain intact. Examples of this classification are prepaid items, inventories, and principal (corpus) of an endowment fund. The Property Appraiser does not have any nonspendable funds.
■ Restricted―This component of fund balances consists of amounts that are constrained
either: (a) externally by third parties (creditors, grantors, contributors, or laws or regulations of other governments); or (b) by law through constitutional provisions or enabling legislation.
10
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Concluded)
Fund Balances (Concluded) ■ Committed―This component of fund balance consists of amounts that can only be used
for specific purposes pursuant to constraints imposed by formal action (e.g., policy) of the organization’s governing authority. By statute, the Property Appraiser himself is the governing authority. These committed amounts cannot be used for any other purpose unless the Property Appraiser removes or changes the specified use by taking the same type of action (e.g., policy) he employed to constrain those amounts.
■ Assigned―This component of fund balance consists of amounts that are constrained by a
less-than-formal action of the organization’s governing authority, or by an individual or body to whom the governing authority has delegated this responsibility. The Property Appraiser has not delegated the responsibility to assign fund balances to any individual or body.
■ Unassigned―This classification is used for: (a) negative unrestricted fund balances in any
governmental fund; or (b) fund balances within the general fund that are not restricted, committed, or assigned.
When both restricted and unrestricted resources are available for use, it is the Property
Appraiser’s policy to use restricted resources first, then unrestricted resources (committed, assigned, and unassigned) as they are needed. When unrestricted resources (committed, assigned, and unassigned) are available for use, it is the Property Appraiser’s policy to use committed resources first, then assigned, and then unassigned as needed.
Use of Estimates The preparation of financial statements in accordance with GAAP requires management to
make estimates and assumptions that affect the amounts reported or disclosed in the financial statements and accompanying notes. Actual results could differ from those estimates.
Governmental Accounting Standards Board (GASB) Statement No. 68 The Property Appraiser participates in the Florida Retirement System (FRS) defined benefit pension plan and the Health Insurance Subsidy (HIS) defined benefit plan administered by Florida Division of Retirement. As a participating employer, the Property Appraiser implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, which requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers’ proportionate share of the net pension liabilities and related pension amounts of the defined benefit pension plans. However, these liabilities would be recorded in government-wide financial statements, which are not required in this special-purpose presentation. As such, only the applicable disclosures required by GASB 68 have been presented herein. In addition, the cost-sharing multiple-employer plans mentioned above operate on a fiscal year ended June 30.
11
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 2 - Budgetary Process Section 195.087, Florida Statutes, governs the preparation, adoption, and administration of the
Property Appraiser’s annual budget. The Property Appraiser prepares a budget for the general fund and submits it to the Florida Department of Revenue for approval. Any subsequent amendments to the Property Appraiser’s total budget must be approved by the Florida Department of Revenue. The budget is prepared on a basis consistent with GAAP and serves as the legal authorization for expenditures.
Budgetary control is maintained at the major object expenditure level. Expenditures may not
legally exceed appropriations at the fund level. Appropriations lapse at year-end. Budgetary changes within major object expenditure categories are made at the discretion of the Property Appraiser.
Budgets have also been prepared for the GIS, Addressing, and GIS Business Units funds, but
not the County Fees and Commissions or Addressing Fees funds. These budgets are not required to be submitted to the Department of Revenue for approval, and have no specific legal level of authority.
The original budget is the first complete appropriated budget. The final budget is the original
budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year.
Note 3 - Cash and Investments At September 30, 2016, the carrying value of the Property Appraiser’s cash and cash equivalents
was as follows: Carrying Credit Value Rating Cash on Hand $ 150 N/A Demand Deposits 1,134,444 N/A Total Cash and Cash Equivalents $ 1,134,594 The Property Appraiser’s bank deposits are held in qualified public depositories (QPDs)
pursuant to Chapter 280, Florida Statutes. Under this Chapter, each QPD is required to pledge collateral to the State Treasurer against the public deposits. In the event of default by a QPD, all claims for public deposits would be satisfied by the State Treasurer from the proceeds of federal deposit insurance, pledged collateral of the QPD in default and, if necessary, assessments against other QPDs of the same type as the depositor in default.
Authorized Investments
The Property Appraiser has not adopted an investment policy and so, by statute, follows the state’s guidance set forth in Section 219.075, Florida Statutes regarding the deposit of funds received and the investment of surplus funds. That section requires local governments without written investment policies, including County officers, to follow the state policy in Section 218.415(17), Florida Statutes. That Section authorizes the following investments:
12
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 3 - Cash and Investments (Concluded) Authorized Investments (Concluded)
a. The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Florida Statute 163.01.
b. Securities and Exchange Commission registered money market funds with the highest
credit quality rating from a nationally recognized rating agency. c. Interest-bearing time deposits or savings accounts in qualified public depositories. d. Direct obligations of the United States Treasury. The Property Appraiser does not have policies that address credit risk, custodial credit risk, or
interest rate risk. The Property Appraiser had no investments at year-end or during the year. Note 4 - Capital Assets Pursuant to Florida Statutes, capital assets used by the Property Appraiser are owned by the
Board. The Property Appraiser maintains custodial and record-keeping responsibility for the tangible capital assets used by the office. The office space used in the Property Appraiser’s operations is provided at no cost by the Board.
Capital assets paid for by the Property Appraiser are recorded as expenditures in the
governmental funds of the Property Appraiser and are capitalized in the basic financial statements of the County. Donated assets are recorded directly on the County’s books at their estimated fair value on the date received. Depreciation is recorded at the County level.
Note 5 - Long-term Liability The following is a summary of changes in general long-term liabilities, which are reported in
the basic financial statements of the County: Balance Balance October 1, September 30, 2015 Additions Deletions 2016 Accrued Compensated Absences $ 181,709 $ 174,645 $ (162,445) $ 193,909 Of the above obligations, $179,834 is expected to be paid from general fund revenues during
the fiscal year ended September 30, 2017. These liabilities are not reported in the financial statements of the Property Appraiser since they have not matured.
13
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 6 - Employee Retirement Plan
General Information about the Florida Retirement System (FRS) The FRS was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees. The FRS was amended in 1998 to add the Deferred Retirement Option Program (DROP) under the defined benefit plan and amended in 2000 to provide a defined contribution plan alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined contribution pension plan is the FRS Investment Plan. Chapter 112, Florida Statutes, established the Retiree Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit pension plan, to assist retired members of any state-administered retirement system in paying the costs of health insurance. Essentially all regular employees of the Property Appraiser are eligible to enroll as members of the State-administered FRS. Provisions relating to FRS are established by Chapters 121 and 122, Florida Statutes; Chapter 112 Part IV, Florida Statutes; Chapter 238, Florida Statutes; and FRS Rules, Chapter 60S, Florida Administrative Code; wherein eligibility, contributions, and benefits are defined and described in detail. Such provisions may be amended at any time by further action from the Florida Legislature. The FRS is a single retirement system administered by the Florida Department of Management Services, Division of Retirement, and consists of two cost-sharing, multiple-employer defined-benefit plans and other nonintegrated programs. A comprehensive annual financial report of the FRS, which includes its financial statements, required supplementary information, actuarial report, and other relevant information, is available from the Florida Department of Management Services’ web site (www.dms.myflorida.com). The Property Appraiser’s contributions to the FRS Plan totaled $214,601 for the fiscal year ended September 30, 2016 (all plans). FRS Pension Plan Plan Description. The FRS Pension Plan (Plan) is a cost-sharing multiple-employer defined benefit pension plan, with a DROP for eligible employees. The general classes of membership applicable to the Property Appraiser are as follows: ■ Regular Class―Members of the FRS who do not qualify for membership in the other
classes. ■ Elected County Officer Class―Members who hold specified elective offices in local
government. ■ Senior Management Service Class―Members in senior management level positions.
Employees enrolled in the Plan prior to July 1, 2011, vest at six years of creditable service and employees enrolled in the Plan on or after July 1, 2011, vest at eight years of creditable service. All vested members enrolled prior to July 1, 2011, are eligible for normal retirement benefits at age 62 or at any age after 30 years of service.
14
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 6 - Employee Retirement Plan (Continued)
FRS Pension Plan (Continued) Plan Description. (Concluded) All members enrolled in the Plan on or after July 1, 2011, once vested, are eligible for normal retirement benefits at age 65 or any time after 33 years of creditable service. Members of the Plan may include up to four years of credit for military service toward creditable service. The Plan also includes an early retirement provision; however, there is a benefit reduction for each year a member retires before his or her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-of-living adjustments to eligible participants. DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal retirement under the Plan to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in DROP for a period not to exceed 60 months after electing to participate, except that certain instructional personnel may participate for up to 96 months. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not include amounts for DROP participants, as these members are considered retired and are not accruing additional pension benefits. Benefits Provided. Benefits under the Plan are computed on the basis of age and/or years of service, average final compensation, and service credit. Credit for each year of service is expressed as a percentage of the average final compensation. For members initially enrolled before July 1, 2011, the average final compensation is the average of the five highest fiscal years’ earnings; for members initially enrolled on or after July 1, 2011, the average final compensation is the average of the eight highest fiscal years’ earnings. The total percentage value of the benefit received is determined by calculating the total value of all service, which is based on the retirement class to which the member belonged when the service credit was earned. The following chart shows the percentage value for each year of service credit earned:
Class, Initial Enrollment, and Retirement Age/Years of Service % Value
Regular Class Members Initially Enrolled Before July 1, 2011 Retirement at age 63 or with 31 years of service 1.63
Retirement at age 64 or with 32 years of service 1.65
Retirement at age 65 or with 33 or more years of service 1.68
Regular Class Members Initially Enrolled on or After July 1, 2011 Retirement up to age 65 or up to 33 years of service 1.60
Retirement at age 66 or with 34 years of service 1.63
Retirement at age 67 or with 35 years of service 1.65
Retirement at age 68 or with 36 or more years of service 1.68
Elected County Officers 3.00Senior Management Service Class 2.00
15
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 6 - Employee Retirement Plan (Continued)
FRS Pension Plan (Concluded) Benefits Provided. (Concluded) As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by 3%. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. Contributions. The Florida Legislature establishes contribution rates for participating employers and employees. Contribution rates during the 2015-2016 fiscal year were as follows:
The Property Appraiser’s contributions (employer only) to the Plan totaled $188,965 for the fiscal year ended September 30, 2016. This excludes the HIS defined benefit pension plan contributions. Pension Liabilities. The FRS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016 are not available. At September 30, 2015, the Property Appraiser’s proportionate share of the FRS net pension liability was $1,037,139.
Further details of the FRS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report.
Year Ended June 30, 2016 Year Ended June 30, 2017
Class Employee Employer Employee Employer
FRS, Regular 3.00 5.56 3.00 5.80FRS, Elected County Officers 3.00 40.57 3.00 40.75FRS, Senior Management Service 3.00 19.73 3.00 20.05DROP - Applicable to Members from All of the Above Classes 0.00 11.22 0.00 11.33FRS, Reemployed Retiree (1) (1) (1) (1)
Note: (1) Contribution rates are dependent upon retirement class in which reemployed.
Percent of Gross Salary Percent of Gross Salary
16
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued)
Note 6 - Employee Retirement Plan (Continued) HIS Pension Plan Plan Description. The HIS Pension Plan (HIS Plan) is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida Legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Florida Department of Management Services. Benefits Provided. For the fiscal year ended September 30, 2016, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS Plan benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Contributions. The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal years ending June 30, 2017 and 2016, the contribution rate was 1.66% of payroll respectively, pursuant to Section 112.363, Florida Statues. The Property Appraiser contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. The Property Appraiser’s contributions to the HIS Plan totaled $22,537 for the fiscal year ended September 30, 2016. Pension Liabilities. The HIS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Property Appraiser’s proportionate share of the HIS net pension liability was $599,533. Further details of the HIS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report.
17
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued)
Note 6 - Employee Retirement Plan (Continued)
FRS – Defined Contribution Pension Plan The Property Appraiser contributes to the FRS Investment Plan (Investment Plan), a defined contribution pension plan, for its eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the SBA, and is reported in the SBA’s annual financial statements and in the State of Florida Comprehensive Annual Financial Report. Service retirement benefits are based upon the value of the member’s account upon retirement. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. Property Appraiser employees participating in DROP are not eligible to participate in the Investment Plan. Employer and employee contributions, including amounts contributed to individual member’s accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Allocations to the investment members’ accounts during the 2015-16 fiscal year were as follows:
For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the FRS Pension Plan is transferred to the Investment Plan, the member must have the years of service required for FRS Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five year period, the employee will regain control over their account. If the employee does not return within the five year period, the employee will forfeit the accumulated account balance. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04% of payroll and by forfeited benefits of Investment Plan members. For the fiscal year ended September 30, 2016, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to the Property Appraiser.
Percent of GrossClass Compensation
FRS, Regular 6.30
FRS, Elected County Officers 11.34
FRS, Senior Management Service 7.67
18
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 6 - Employee Retirement Plan (Concluded)
After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income. The Property Appraiser’s contributions to the Investment Plan totaled $3,099 for the fiscal year ended September 30, 2016.
Note 7 - Postemployment Benefits Other than Pensions The Board offers postemployment health care benefits and life insurance to all retired employees of the Property Appraiser’s Office and their dependents. Participating retirees are required to reimburse the Board for 100% of the premium cost, which is netted against the premium payment, so that no net expense is initially recorded in the Board’s financial statements. However, these retirees are receiving an “implicit subsidy” because the premium is a group rate which includes active, lower cost employees. This implicit subsidy has a cost which under GAAP is required to be disclosed in these financial statements. However this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Property Appraiser’s Office. Accordingly, these calculations and disclosures can be found in the County-wide annual financial report.
Note 8 - Leases The Property Appraiser has entered into certain noncancellable operating leases for vehicles
and office equipment necessary for the conduct of operations that expire at various dates during the next two years. Lease expense for the year ended September 30, 2016, was $16,708. Future minimum lease payments under these noncancellable lease agreements provide for minimum annual rental payments as follows:
Year Ending September 30 Amount 2017 $ 16,857 2018 8,621 2019 0 2020 0 2021 0 Total $ 25,478
19
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Continued) Note 9 - Risk Management The Property Appraiser participates in the insurance programs of the Board including general
liability, workers’ compensation, property and casualty, and employee health insurance. These risk management activities are handled through internal service funds maintained by the Board. All liabilities associated with these self-insured risks are reported in the basic financial statements of the Board. The purpose of these funds is to administer employee life, health, workers’ compensation, unemployment, disability insurance, and property and liability insurance. These funds account for the risk financing activities of the Board, but do not constitute a transfer of risk from the County.
Significant losses are covered by commercial insurance for all major programs except workers’
compensation for which the County retains risk of loss. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage in any of the last three years.
The Property Appraiser paid premiums of $8,748 for general liability and $384,109 for
employee life and health insurance coverage to the Board for the year ended September 30, 2016.
The Board’s Workers’ Compensation internal service fund is a self-insurance program for
workers’ compensation claims on losses up to $750,000 per occurrence. The workers’ compensation fund has indemnified the Property Appraiser against any losses in a given year in excess of the fee charged. In the event actual losses are less than the fee charged, such amounts will be retained in the Workers’ Compensation fund. Claim settlements and losses are accrued and subsequently paid from the workers’ compensation fund. Premium payments to the Board by the Property Appraiser, which are based on a percentage of salaries paid according to salary classifications, totaled $23,501 for the year ended September 30, 2016.
Note 10 - Litigation The Property Appraiser is involved as defendant or plaintiff in certain litigation and claims
arising from the ordinary course of operations, primarily relating to challenges on property value assessments. Any judgments against the Property Appraiser would be settled by the Board. In the opinion of the Property Appraiser and legal counsel, the range of potential recoveries or liabilities will not materially affect the financial position of the Property Appraiser.
20
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER SEPTEMBER 30, 2016
(Concluded) Note 11 - Commitment The Property Appraiser has the following future commitment to one vendor for four separate
aerial mapping projects: Year Ending September 30 Amount 2017 $ 150,929 2018 114,094 2019 0 2020 150,929 2021 0 Total $ 415,952
OTHER FINANCIAL INFORMATION
21
County GISFees and Addressing Business
Commissions Addressing Fees UnitsFund Fund Fund Fund Total
AssetsCash and Cash Equivalents $ 11,669 $ 5,551 $ 18,170 $ 18,931 $ 54,321
Total Assets 11,669 5,551 18,170 18,931 54,321
Liabilities and Fund Balances
LiabilitiesVouchers Payable 150 0 0 24 174 Due to the Hernando County, Florida,
Board of County Commissioners 11,271 5,551 18,170 18,907 53,899 Due to Other Governments 248 0 0 0 248
Total Liabilities 11,669 5,551 18,170 18,931 54,321
Fund BalancesCommitted for Specific Purpose 0 0 0 0 0
Total Fund Balances 0 0 0 0 0
Total Liabilities and Fund Balances $ 11,669 $ 5,551 $ 18,170 $ 18,931 $ 54,321
SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS
22
County GISFees and Addressing Business
Commissions Addressing Fees UnitsFund Fund Fund Fund Total
RevenuesIntergovernmental Revenues:
Hernando County, Florida, Board of County Commissioners 0$ 117,069$ 0$ 113,890$ 230,959$
Charges for Services 41,731 0 20,105 0 61,836 Total Revenues 41,731 117,069 20,105 113,890 292,795
ExpendituresGeneral Government:
Personal Services 0 105,282 0 91,631 196,913 Operating 28,302 6,236 1,935 3,352 39,825 Capital Outlay 1,910 0 0 0 1,910
(Total Expenditures) (30,212) (111,518) (1,935) (94,983) (238,648)
Excess of Revenues overExpenditures 11,519 5,551 18,170 18,907 54,147
Other Financing (Uses) SourcesTransfers (out):
Distribution of Excess Fees to the Hernando County, Florida, Board of County Commissioners (11,271) (5,551) (18,170) (18,907) (53,899)
Distribution of Excess Fees toOther Taxing Districts (248) 0 0 0 (248)
Total Other Financing (Uses) Sources (11,519) (5,551) (18,170) (18,907) (54,147)
Net Change in Fund Balances 0 0 0 0 0
Fund Balance, Beginning of Year 0 0 0 0 0
Fund Balance, End of Year 0$ 0$ 0$ 0$ 0$
FOR THE YEAR ENDED SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
NONMAJOR GOVERNMENTAL FUNDSAND CHANGES IN FUND BALANCE
23
Variancewith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Intergovernmental Revenues:Hernando County, Florida,
Board of County Commissioners 117,069$ 117,069$ 117,069$ 0$ Total Revenues 117,069 117,069 117,069 0
ExpendituresGeneral Government:
Personal Services 108,332 108,332 105,282 3,050 Operating 8,737 8,737 6,236 2,501
(Total Expenditures) (117,069) (117,069) (111,518) 5,551
Excess of Revenues over Expenditures 0 0 5,551 5,551
Other Financing (Uses) SourcesTransfers (out):
Distribution of Excess Fees to the Hernando County, Florida, Board of County Commissioners 0 0 (5,551) (5,551)
Total Other Financing (Uses) Sources 0 0 (5,551) (5,551)
Net Change in Fund Balances 0 0 0 0
Fund Balance, Beginning of Year 0 0 0 0
Fund Balance, End of Year 0$ 0$ 0$ 0$
Budget
HERNANDO COUNTY, FLORIDAPROPERTY APPRAISER
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - ADDRESSING FUNDFOR THE YEAR ENDED SEPTEMBER 30, 2016
24
Variancewith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Intergovernmental Revenues:Hernando County, Florida,
Board of County Commissioners 113,890$ 113,890$ 113,890$ 0$ Total Revenues 113,890 113,890 113,890 0
ExpendituresGeneral Government:
Personal Services 106,930 106,930 91,631 15,299 Operating 6,860 6,860 3,352 3,508
Nonoperating 100 100 0 100 (Total Expenditures) (113,890) (113,890) (94,983) 18,907
Excess of Revenues over Expenditures 0 0 18,907 18,907
Other Financing (Uses) SourcesTransfers (out):
Distribution of Excess Fees to the Hernando County, Florida, Board of County Commissioners 0 0 (18,907) (18,907)
Total Other Financing (Uses) Sources 0 0 (18,907) (18,907)
Net Change in Fund Balances 0 0 0 0
Fund Balance, Beginning of Year 0 0 0 0
Fund Balance, End of Year 0$ 0$ 0$ 0$
Budget
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL - GIS BUSINESS UNITS FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
PROPERTY APPRAISER
OTHER REPORTS
25
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable John C. Emerson Property Appraiser Hernando County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Property Appraiser (the Property Appraiser), as of and for the year ended September 30, 2016, and the related notes to the financial statements, and have issued our report thereon dated November 18, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Property Appraiser’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Property Appraiser’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Property Appraiser’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
26
Honorable John C. Emerson Property Appraiser Hernando County, Florida
INDEPENDENT AUDITORS’ 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
(Concluded) Compliance and Other Matters As part of obtaining reasonable assurance about whether the Property Appraiser’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. November 18, 2016 Sarasota, Florida
27
INDEPENDENT ACCOUNTANTS’ REPORT
Honorable John C. Emerson Property Appraiser Hernando County, Florida We have examined Hernando County, Florida, Property Appraiser’s (the Property Appraiser) compliance with the requirements of Section 218.415, Florida Statutes, as of and for the fiscal year ended September 30, 2016, as required by Section 10.556(10)(a), Rules of the Auditor General. Management is responsible for the Property Appraiser’s compliance with those requirements. Our responsibility is to express an opinion on the Property Appraiser’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Property Appraiser’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Property Appraiser’s compliance with specified requirements. In our opinion, the Property Appraiser complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Property Appraiser, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. November 18, 2016 Sarasota, Florida
28
MANAGEMENT LETTER Honorable John C. Emerson Property Appraiser Hernando County, Florida Report on the Financial Statements We have audited the financial statements of each major fund and the aggregate remaining fund information of the Hernando County, Florida, Property Appraiser (the Property Appraiser), as of and for the fiscal year ended September 30, 2016, and have issued our report thereon dated November 18, 2016. Auditors’ Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to the financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports We have issued our Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountants’ Report on Compliance with Section 218.415, Florida Statutes. Disclosures in those reports, if any, which are dated November 18, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. In that regard, the Property Appraiser was established by the Constitution of the State of Florida, Article VIII, Section 1(d). The Property Appraiser does not have any component units. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.
29
Honorable John C. Emerson Property Appraiser Hernando County, Florida
MANAGEMENT LETTER (Concluded)
Other Matters (Concluded) Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Property Appraiser, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be and should not be used by anyone other than these specified parties. We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of our audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. November 18, 2016 Sarasota, Florida
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
SUPERVISOR OF ELECTIONS HERNANDO COUNTY, FLORIDA
SEPTEMBER 30, 2016
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
SUPERVISOR OF ELECTIONS HERNANDO COUNTY, FLORIDA
SEPTEMBER 30, 2016
TABLE OF CONTENTS Independent Auditors’ Report ................................................................................................................ 1-2 Financial Statements Balance Sheet - General Fund ................................................................................................................... 3 Statement of Revenues, Expenditures, and Changes in Fund Balance - General Fund .......................................................................................................................... 4 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) - General Fund ........................................................... 5 Notes to Financial Statements ............................................................................................................. 6-17 Other Reports Independent Auditors’ 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 ..................................................................................................... 18-19 Independent Accountants’ Report on Compliance with Florida Statute Section 218.415―Investments of Public Funds ............................................................... 20 Management Letter ............................................................................................................................. 21-22 Management Response Letter .................................................................................................................. 23
1
INDEPENDENT AUDITORS’ REPORT Honorable Shirley Anderson Supervisor of Elections Hernando County, Florida Report on the Financial Statements We have audited the accompanying financial statements of the general fund (major fund) of the Hernando County, Florida Supervisor of Elections (the Supervisor of Elections), as of and for the year ended September 30, 2016, and the related notes to financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements 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. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in 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 opinion.
2
Honorable Shirley Anderson Supervisor of Elections Hernando County, Florida
INDEPENDENT AUDITORS’ REPORT (Concluded)
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the general fund (major fund) of the Supervisor of Elections as of September 30, 2016, and the changes in financial position and budgetary comparison thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter – Incomplete Presentation As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida (the Rules). In conformity with the Rules, the accompanying financial statements are intended to present the financial position, changes in financial position, and budgetary comparisons of the general fund (major fund), only for that portion of the general fund (major fund) of Hernando County, Florida, that is attributable to the Supervisor of Elections. They do not purport to, and do not, present fairly the financial position as a whole of Hernando County, Florida, as of September 30, 2016, and the changes in its financial position or budgetary comparisons for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 18, 2016, on our consideration of the Supervisor of Elections’ 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 Supervisor of Elections’ internal control over financial reporting and compliance. November 18, 2016 Sarasota, Florida
See accompanying notes.3
AssetsCash 140,858$
Total Assets 140,858
Liabilities and Fund Balances
LiabilitiesAccounts Payable 1,000 Accrued Liabilities 28,484 Unearned Revenue 95,213 Due to the Hernando County, Florida,
Board of County Commissioners - Other 4,808 Due to the Hernando County, Florida,
Board of County Commissioners 11,353 Total Liabilities 140,858
Fund Balances 0
Total Liabilities and Fund Balances 140,858$
HERNANDO COUNTY, FLORIDASUPERVISOR OF ELECTIONS
BALANCE SHEET
SEPTEMBER 30, 2016GENERAL FUND
See accompanying notes.4
RevenuesCharges for Services 6,426$
Total Revenues 6,426
ExpendituresGeneral Government:
Personnel Services 770,384 Operating 465,710 Capital Outlay 6,518
(Total Expenditures) (1,242,612)
(Deficiency) of Revenues (Under) Expenditures (1,236,186)
Other Financing Sources (Uses)Transfers in:
Hernando County, Florida, Board of County Commissioners Appropriations 1,247,539
Transfers (out):Distribution of Excess Appropriations to the Hernando
County, Florida, Board of County Commissioners (11,353) Total Other Financing Sources (Uses) 1,236,186
Change in Fund Balance 0
Fund Balance, Beginning of Year 0
Fund Balance, End of Year 0$
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
HERNANDO COUNTY, FLORIDASUPERVISOR OF ELECTIONS
GENERAL FUNDFOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.5
Variancewith Final
BudgetPositive
Original Final Actual (Negative)Revenues
Charges for Services 0$ 0$ 6,426$ 6,426$ Total Revenues 0 0 6,426 6,426
ExpendituresGeneral Government:
Personnel Services 774,691 774,691 770,384 4,307 Operating 472,848 472,848 465,710 7,138
Capital Outlay 0 0 6,518 (6,518) (Total Expenditures) (1,247,539) (1,247,539) (1,242,612) 4,927
(Deficiency) of Revenues(Under) Expenditures (1,247,539) (1,247,539) (1,236,186) 11,353
Other Financing Sources (Uses)Transfers in:
Hernando County, Florida, Board of County Commissioners Appropriations 1,247,539 1,247,539 1,247,539 0
Transfers (out):Distribution of Excess Appropriations to
the Hernando County, Florida, Boardof County Commissioners 0 0 (11,353) (11,353)
Total Other Financing Sources (Uses) 1,247,539 1,247,539 1,236,186 (11,353)
Change in Fund Balance 0$ 0$ 0 0$
Fund Balance, Beginning of Year 0
Fund Balance, End of Year 0$
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
Budget
HERNANDO COUNTY, FLORIDASUPERVISOR OF ELECTIONS
BUDGET AND ACTUAL (BUDGETARY BASIS) - GENERAL FUNDFOR THE YEAR ENDED SEPTEMBER 30, 2016
6
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
Note 1 - Summary of Significant Accounting Policies Reporting Entity Hernando County, Florida (the County), is a political subdivision of the State of Florida. It is
governed by an elected Board of County Commissioners (the Board), and managed by an appointed County Administrator. The Hernando County, Florida Supervisor of Elections (the Supervisor of Elections) is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 129, Florida Statutes, the Supervisor of Elections’ budget is submitted to the Board for approval.
Transfers are provided by appropriations from the Board pursuant to law. Estimated receipts and
budgeted fund balances must equal appropriations. The Supervisor of Elections is required to refund to the Board all excess appropriations annually; therefore, no unappropriated fund balance is carried forward.
For financial reporting purposes, the Supervisor of Elections is deemed to be part of the primary
government of the County, and as such, is included in the County’s Comprehensive Annual Financial Report.
Basis of Presentation The accompanying financial statements include all the funds and accounts of the Supervisor of
Elections’ office, but are not a complete presentation of the County as a whole. Except for this matter, they are otherwise in conformity with accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(4), Rules of the Auditor General—Local Governmental Entity Audits.
The financial transactions of the Supervisor of Elections are recorded in individual funds. Each
fund is accounted for by providing a separate set of self-balance accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. These funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with specific regulations, restrictions, or limitations. The Supervisor of Elections has only one governmental type fund (the general fund) and no other funds.
The focus of governmental fund financial statements is generally on major funds rather than
reporting funds by type. GAAP sets forth minimum criteria (percentage of total assets, liabilities, revenues, or expenditures) for the determination of major funds. However, the general fund, by definition, is always a major fund. In the governmental fund financial statements, each major fund is reported in a separate column, but since the Supervisor of Elections has only one governmental fund (the general fund), the governmental fund financial statements contain only one column.
Measurement Focus and Basis of Accounting Governmental funds are accounted for using the flow of current financial resources measurement
focus. Only current assets and current liabilities, generally, are included on the balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.
7
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Measurement Focus and Basis of Accounting (Concluded) The modified accrual basis of accounting is used by governmental funds. Under the modified
accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when it becomes measurable and available to finance liabilities of the current fiscal year). For this purpose, the Supervisor of Elections considers revenues to be available if they are collected within 45 days of the end of the current period and can be used for paying current period expenditures. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured.
The appropriations from the Board are the primary source of funds considered to be susceptible
to accrual. Intergovernmental revenues are recognized when eligibility requirements are met and related
amounts are available from the grantor. Charges for services are recognized as they are earned and become measurable and available to pay liabilities of the current period.
Florida Statutes provide that the amount by which revenues and transfers exceed annual
expenditures be remitted to the Board immediately following the fiscal year during which the funding was provided or following the fiscal year during which other revenue was recognized. The amount of this distribution is recorded as a liability and as an “other financing use” in the accompanying financial statements.
Prepaid Items Certain prepayments to vendors reflect costs applicable to future accounting periods. These
prepayments are recorded as expenditures in the year paid. Deferred Inflows/Unearned Revenue Deferred inflows represent revenues that have been earned, but are not available (because they
were received more than 45 days after year-end). Unearned revenue represents funds received for voter education and poll worker recruitment and training grants which had not been expended at fiscal year-end. Revenue will be recognized in subsequent years when all eligibility requirements have been met.
Compensated Absences All full time employees of the Supervisor of Elections were previously entitled to annual vacation
and sick leave with pay. In May 2013, the Supervisor converted to a paid time off (PTO) policy, where employees may accumulate PTO up to a maximum of 480 hours. Also, full time employees must use a minimum of 80 hours of PTO each fiscal year or it is forfeited. Upon termination, the employee is paid at a minimum 50%, based on tenure, of accumulated PTO. Vacation and sick leave earned prior to implementation of the PTO policy remain intact, but must be used when it qualifies before any accrued PTO. If an employee were terminated with a vacation or sick leave balance, that employee would be paid for up to 25% of the accumulated sick leave up to 520 hours, and all of the accumulated vacation. Vacation, sick leave, and PTO are included in expenditures in the period paid or due.
8
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued)
Note 1 - Summary of Significant Accounting Policies (Concluded) Compensated Absences (Concluded) The Supervisor of Elections does not, nor is she legally required to, accumulate financial
resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund, but rather is reported in the basic financial statements of the County.
Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make
a number of estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Governmental Accounting Standards Board (GASB) Statement No. 68
The Supervisor of Elections participates in the Florida Retirement System (FRS) defined benefit pension plan and the Health Insurance Subsidy (HIS) defined benefit plan administered by Florida Division of Retirement. As a participating employer, the Supervisor of Elections implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions, in 2015, which requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers’ proportionate share of the net pension liabilities and related pension amounts of the defined benefit pension plans. However, these liabilities would be recorded in government-wide financial statements, which are not required in this special-purpose presentation. As such, only the applicable disclosures required by GASB Statement No. 68 have been presented herein. In addition, the cost-sharing multiple-employer plans mentioned above operate on a fiscal year ended June 30.
Note 2 - Budgetary Process Florida Statutes 129.03, 129.201, and 129.202 govern the preparation, adoption, and
administration of the Supervisor of Elections’ annual budget. The Supervisor of Elections submits a budget for the general fund to the Board for approval. Any subsequent amendments to the Supervisor of Elections’ total budget must be approved by the Board. The annual budget serves as the legal authorization for expenditures. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year-end. Budgetary control is maintained at the major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Supervisor of Elections.
The original budget is the first complete appropriated budget. The final budget is the original
budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year.
9
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued) Note 2 - Budgetary Process (Concluded) The Supervisor of Elections’ budget is prepared under a budgetary basis of accounting that differs
from GAAP. Certain revenues from grants and the related expenditures are not required to be budgeted as part of the general fund operations; however, these and other revenues and expenditures have been recognized under GAAP.
The actual results of operations in the statement of revenues, expenditures, and changes in fund
balance - budget and actual (budgetary basis) - general fund are presented on the basis used for budgetary purposes. Adjustments to convert the results of operations at the end of the year from the budgetary basis of accounting to the GAAP basis of accounting are as follows:
Personnel Operating Revenues Services Expenditures Budgetary Basis $ 6,426 $ 770,384 $ 465,710 GAAP Basis $ 6,426 $ 770,384 $ 465,710 Note 3 - Cash and Investments At September 30, 2016, the carrying value of the Supervisor of Elections’ cash was as follows: Carrying Credit Value Rating Demand Deposits and Money Market Accounts $ 140,858 N/A Of the $140,858 in cash, $95,213 is related to grant revenue received, but not earned. This
amount is recorded as Unearned Revenue on the Balance Sheet. The Supervisor of Elections’ bank deposits are held in qualified public depositories (QPDs)
pursuant to Chapter 280, Florida Statutes. Under this Chapter, each QPD is required to pledge collateral to the State Treasurer against the public deposits. In the event of default by a QPD, all claims for public deposits would be satisfied by the State Treasurer from the proceeds of federal deposit insurance, pledged collateral of the QPD in default and, if necessary, assessments against other QPDs of the same type as the depositor in default.
Authorized Investments
The Supervisor of Elections has not adopted an investment policy and so, by statute, follows the state’s guidance set forth in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. That Section requires local governments without written investment policies, including County officers, to follow the state policy in Section 218.415(17), Florida Statutes. That Section authorizes the following investments:
10
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued)
Note 3 - Cash and Investments (Concluded) Authorized Investments (Concluded) a. The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool
authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Florida Statute 163.01.
b. Securities and Exchange Commission registered money market funds with the highest credit
quality rating from a nationally recognized rating agency. c. Interest-bearing time deposits or savings accounts in qualified public depositories. d. Direct obligations of the United States Treasury. The Supervisor of Elections does not have policies that address credit risk, custodial credit risk,
or interest rate risk. The Supervisor of Elections had no investments at year-end or during the year.
Note 4 - Capital Assets Pursuant to Florida Statutes, capital assets used by the Supervisor of Elections are owned by the
Board. The Supervisor of Elections maintains custodial responsibility for the capital assets used by the office. The office space used in the Supervisor of Elections’ operations is provided at no cost by the Board.
Capital assets paid for by the Supervisor of Elections are recorded as expenditures in the general
fund of the Supervisor of Elections and are capitalized in the basic financial statements of the County. Donated capital assets are recorded directly on the County’s books at their estimated fair value on the date received. Depreciation is recorded at the County level.
Note 5 - Long-term Liability The following is a summary of changes in general long-term liabilities, which are reported in the
basic financial statements of the County: Balance Balance October 1, September 30, 2015 Additions Deletions 2016 Accrued Compensated Absences $ 9,512 $ 19,149 $ 18,416 $ 10,245 Of the above liabilities, all are expected to be paid during the fiscal year ending September 30,
2017. These liabilities are not reported in the financial statements of the Supervisor of Elections since they have not matured.
11
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued) Note 6 - Florida Retirement System
General Information about the Florida Retirement System (FRS) The FRS was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees. The FRS was amended in 1998 to add the Deferred Retirement Option Program (DROP) under the defined benefit plan and amended in 2000 to provide a defined contribution plan alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined contribution pension plan is the FRS Investment Plan, Chapter 112, Florida Statutes, established the Retiree Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit pension plan, to assist retired members of any state-administered retirement system in paying the costs of health insurance.
Essentially all regular employees of the Supervisor of Elections are eligible to enroll as members of the State-administered FRS. Provisions relating to FRS are established by Chapters 121 and 122, Florida Statutes; Chapter 112 Part IV, Florida Statutes; Chapter 238, Florida Statutes; and FRS Rules, Chapter 60S, Florida Administrative Code; wherein eligibility, contributions, and benefits are defined and described in detail. Such provisions may be amended at any time by further action from the Florida Legislature. The FRS is a single retirement system administered by the Florida Department of Management Services, Division of Retirement, and consists of two cost-sharing, multiple-employer defined-benefit plans and other nonintegrated programs. A comprehensive annual financial report of the FRS, which includes its financial statements, required supplementary information, actuarial report, and other relevant information, is available from the Florida Department of Management Services’ web site (www.dms.myflorida.com). The Supervisor of Elections’ contributions to the FRS Plan totaled $65,290 for the fiscal year ended September 30, 2016 (all plans). FRS Pension Plan Plan Description: The FRS Pension Plan (Plan) is a cost-sharing multiple-employer defined benefit pension plan, with a DROP for eligible employees. The general classes of membership applicable to the Supervisor of Elections are as follows: ■ Regular Class―Members of the FRS who do not qualify for membership in the other class. ■ Elected County Officer Class―Members who hold specified elective offices in local
government. Employees enrolled in the Plan prior to July 1, 2011, vest at six years of creditable service and employees enrolled in the Plan on or after July 1, 2011, vest at eight years of creditable service. All vested members enrolled prior to July 1, 2011, are eligible for normal retirement benefits at age 62 or at any age after 30 years of service. All members enrolled in the Plan on or after July 1, 2011, once vested, are eligible for normal retirement benefits at age 65 or any time after 33 years of creditable service. Members of the Plan may include up to four years of credit for military service toward creditable service. The Plan also includes an early retirement provision; however, there is a benefit reduction for each year a member retires before his or her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-of-living adjustments to eligible participants.
12
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued) Note 6 - Employee Retirement Plan (Continued)
FRS Pension Plan (Continued) Plan Description: (Concluded) DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal retirement under the Plan to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in DROP for a period not to exceed 60 months after electing to participate, except that certain instructional personnel may participate for up to 96 months. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not include amounts for DROP participants, as these members are considered retired and are not accruing additional pension benefits. Benefits Provided: Benefits under the Plan are computed on the basis of age and/or years of service, average final compensation, and service credit. Credit for each year of service is expressed as a percentage of the average final compensation. For members initially enrolled before July 1, 2011, the average final compensation is the average of the five highest fiscal years’ earnings; for members initially enrolled on or after July 1, 2011, the average final compensation is the average of the eight highest fiscal years’ earnings. The total percentage value of the benefit received is determined by calculating the total value of all service, which is based on the retirement class to which the member belonged when the service credit was earned. The following chart shows the percentage value for each year of service credit earned:
As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by 3%. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement.
Class, Initial Enrollment, and Retirement Age/Years of Service % Value
Regular Class Members Initially Enrolled Before July 1, 2011 Retirement up to age 62 or up to 30 years of service 1.60 Retirement at age 63 or with 31 years of service 1.63 Retirement at age 64 or with 32 years of service 1.65 Retirement at age 65 or with 33 or more years of service 1.68
Regular Class Members Initially Enrolled on or After July 1, 2011 Retirement up to age 65 or up to 33 years of service 1.60 Retirement at age 66 or with 34 years of service 1.63 Retirement at age 67 or with 35 years of service 1.65 Retirement at age 68 or with 36 or more years of service 1.68
Elected County Officers 3.00
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NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued)
Note 6 - Employee Retirement Plan (Continued) FRS Pension Plan (Concluded) Contributions: The Florida Legislature establishes contribution rates for participating employers and employees. Contribution rates during the 2015-2016 fiscal year were as follows:
The Supervisor of Elections’ contributions (employer only) to the Plan totaled $51,594 for the fiscal year ended September 30, 2016. This excludes the HIS defined benefit pension plan contributions. Pension Liabilities: The FRS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Supervisor of Elections’ proportionate share of the FRS net pension liability was $290,725. Further details of the FRS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report. HIS Pension Plan Plan Description: The HIS Pension Plan (HIS Plan) is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida Legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Florida Department of Management Services. Benefits Provided: For the fiscal year ended September 30, 2016, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS Plan benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare.
Year Ended June 30, 2016 Year Ended June 30, 2017
Class Employee Employer Employee Employer
FRS, Regular 3.00 5.56 3.00 5.80FRS, Elected County Officers 3.00 40.57 3.00 40.75
Percent of Gross Salary Percent of Gross Salary
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NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued)
Note 6 - Employee Retirement Plan (Continued) HIS Pension Plan (Concluded) Contributions: The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal years ended June 30, 2017 and 2016, the contribution rate was 1.66% of payroll respectively, pursuant to Section 112.363, Florida Statutes. The Supervisor of Elections contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. The Supervisor of Elections’ contributions to the HIS Plan totaled $6,360 for the fiscal year ended September 30, 2016. Pension Liabilities: The HIS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Supervisor of Elections’ proportionate share of the HIS net pension liability was $112,223. Further details of the HIS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report.
FRS – Defined Contribution Pension Plan The Supervisor of Elections contributes to the FRS Investment Plan (Investment Plan), a defined contribution pension plan, for its eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the SBA, and is reported in the SBA’s annual financial statements and in the State of Florida Comprehensive Annual Financial Report. Service retirement benefits are based upon the value of the member’s account upon retirement. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. Supervisor of Elections employees participating in DROP are not eligible to participate in the Investment Plan. Employer and employee contributions, including amounts contributed to individual member’s accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Allocations to the investment members’ accounts during the 2015-16 fiscal year were as follows:
15
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued)
Note 6 - Employee Retirement Plan (Concluded) FRS – Defined Contribution Pension Plan (Concluded)
Percent of GrossCompensation
FRS, Regular 6.30FRS, Elected County Officers 11.34
Class
For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the FRS Pension Plan is transferred to the Investment Plan, the member must have the years of service required for FRS Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five year period, the employee will regain control over their account. If the employee does not return within the five year period, the employee will forfeit the accumulated account balance. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04% of payroll and by forfeited benefits of Investment Plan members. For the fiscal year ended September 30, 2016, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to the Supervisor of Elections. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income. The Supervisor of Elections’ contributions to the Investment Plan totaled $7,336 for the fiscal year ended September 30, 2016.
Note 7 - Postemployment Benefits Other than Pensions
The Board offers postemployment health care benefits and life insurance to all retired employees of the Supervisor of Election’s Office and their dependents. Participating retirees are required to reimburse the Board for 100% of the premium cost, which is netted against the premium payment, so that no net expense is initially recorded in the Board’s financial statements. However, these retirees are receiving an “implicit subsidy” because the premium is a group rate which includes active, lower cost employees.
16
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Continued) Note 7 - Postemployment Benefits Other than Pensions (Concluded)
This implicit subsidy has a cost which under GAAP is required to be disclosed in these financial statements. However, this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Supervisor of Election’s Office. Accordingly, these calculations and disclosures can be found in the County-wide annual financial report.
Note 8 - Risk Management The Supervisor of Elections participates in the insurance programs of the Board including general
liability, workers’ compensation, property and casualty, and employee health insurance. These risk management activities are handled through internal service funds maintained by the Board. All liabilities associated with these self-insured risks are reported in the basic financial statements of the Board. The purpose of these funds is to administer employee life, health, workers’ compensation, unemployment and disability insurance, and property and liability insurance. These funds account for the risk financing activities of the County, but do not constitute a transfer of risk from the County.
Significant losses are covered by commercial insurance for all major programs except workers’ compensation for which the County retains risk of loss. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage in any of the last three years.
The Supervisor of Elections paid premiums of $11,852 for property and casualty, and $94,619
for health insurance coverage to the Board for the year ended September 30, 2016. The Workers’ Compensation internal service fund is a self-insurance program for workers’
compensation claims on losses up to $750,000 per occurrence. The workers’ compensation fund has indemnified the Supervisor of Elections against any losses in a given year in excess of the fee charged. In the event actual losses are less than the fee charged, such amounts will be retained in the Workers’ Compensation fund. Claim settlements and losses are accrued and subsequently paid from the Workers’ Compensation fund. Premium payments to the Board by the Supervisor of Elections, which are based on a percentage of salaries paid according to salary classifications, totaled $1,476 for the year ended September 30, 2016.
Note 9 - Lease Commitments The Supervisor of Elections has commitments outstanding related to two noncancellable lease
agreements for office equipment and maintenance. The agreements expire in September 2018 and 2019. Future minimum lease payments under these noncancellable lease agreements provide for aggregate minimum annual payments as follows:
Year Ending September 30, Amount 2017 $ 7,591 2018 7,591 2019 5,623 Total Minimum Lease Payments $ 20,805 Lease expense for all operating leases aggregated $7,591 for the year ended September 30, 2016.
17
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2016
(Concluded) Note 10 - Claims and Contingencies Grants Grant funds received by the Supervisor of Elections are subject to audit by grantor agencies.
Audits of these grants may result in disallowed costs, which may constitute a liability of the Supervisor of Elections. In the opinion of management, disallowed costs, if any, would be immaterial to the financial position of the Supervisor of Elections.
OTHER REPORTS
18
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON
AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Shirley Anderson Supervisor of Elections Hernando County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the general fund of the Hernando County, Florida Supervisor of Elections (the Supervisor of Elections), as of and for the year ended September 30, 2016, and the related notes to the financial statements, and have issued our report thereon dated November 18, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Supervisor of Elections’ internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Supervisor of Elections’ internal control. Accordingly, we do not express an opinion on the effectiveness of the Supervisor of Elections’ internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
19
Honorable Shirley Anderson Supervisor of Elections Hernando County, Florida
INDEPENDENT AUDITORS’ 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
(Concluded)
Compliance and Other Matters As part of obtaining reasonable assurance about whether the Supervisor of Elections’ financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Supervisor of Elections’ internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Supervisor of Elections’ internal control and compliance. Accordingly, this communication is not suitable for any other purpose. November 18, 2016 Sarasota, Florida
20
INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE WITH FLORIDA STATUTE SECTION 218.415―INVESTMENTS OF PUBLIC FUNDS
Honorable Shirley Anderson Supervisor of Elections Hernando County, Florida We have examined the Hernando County, Florida Supervisor of Elections’ (the Supervisor of Elections) compliance with Section 218.415, Florida Statutes, during the fiscal year ended September 30, 2016. Management is responsible for the Supervisor of Elections’ compliance with those requirements. Our responsibility is to express an opinion on the Supervisor of Elections’ compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Supervisor of Elections’ compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Supervisor of Elections’ compliance with specified requirements. In our opinion, the Supervisor of Elections complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2016. This report is intended solely for the information and use of the Florida Auditor General, the Supervisor of Elections, its management, and the Board of County Commissioners of Hernando County, Florida and is not intended to be and should not be used by anyone other than these specified parties. November 18, 2016 Sarasota, Florida
21
MANAGEMENT LETTER Honorable Shirley Anderson Supervisor of Elections Hernando County, Florida Report on the Financial Statements We have audited the financial statements of the general fund of the Hernando County, Florida Supervisor of Elections (the Supervisor of Elections), as of and for the year ended September 30, 2016, and have issued our report thereon dated November 18, 2016. Auditors’ Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports We have issued our Independent Auditors’ 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; and Independent Accountants’ Report on Compliance with Florida Statute Section 218.415 – Investments of Public Funds. Disclosures in those reports and schedule, which are dated November 18, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. In that regard, the Supervisor of Elections was established by the Constitution of the State of Florida, Article VIII, Section 1(d). The Supervisor of Elections does not have any component units.
22
Honorable Shirley Anderson Supervisor of Elections Hernando County, Florida
MANAGEMENT LETTER (Concluded)
Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we have the following finding: ■ 2016-1 – During our audit, we noted that the main operating bank account was not properly reconciled.
To correct the reconciliation, we were required to adjust for nonreconciling items related to retirement contributions owed but not paid. We recommend that management obtain assistance with reconciling the bank account to ensure that the reconciliation is performed accurately in the future.
Section 10.554(1)(i)3., Rules of Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Supervisor of Elections, its management, the Board of County Commissioners of Hernando County, Florida, and is not intended to be and should not be used by anyone other than these specified parties. We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of our audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. November 18, 2016 Sarasota, Florida
23
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
TAX COLLECTOR HERNANDO COUNTY, FLORIDA
SEPTEMBER 30, 2016
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
TAX COLLECTOR HERNANDO COUNTY, FLORIDA
SEPTEMBER 30, 2016
TABLE OF CONTENTS Independent Auditors’ Report ................................................................................................................ 1-2 Financial Statements Balance Sheet - General Fund ................................................................................................................... 3 Statement of Revenues, Expenditures, and Changes in Fund Balance - General Fund .......................................................................................................................... 4 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ......................................................................................... 5 Statement of Fiduciary Assets and Liabilities - Agency Funds ................................................................. 6 Notes to Financial Statements .............................................................................................................. 7-19 Other Financial Information Combining Statement of Fiduciary Assets and Liabilities - Agency Funds ....................................................................................................................................... 20 Other Reports Independent Auditors’ 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 ................................................... 21-22 Independent Accountants’ Report on Compliance with Section 218.415, Florida Statutes ......................................................................................................... 23 Management Letter ............................................................................................................................. 24-25
1
INDEPENDENT AUDITORS' REPORT Honorable Sally L. Daniel, C.F.C. Tax Collector Hernando County, Florida Report on the Financial Statements We have audited the accompanying financial statements of the general fund (major fund) and the aggregate remaining fund information of the Hernando County, Florida, Tax Collector (the Tax Collector), as of and for the year ended September 30, 2016, and the related notes to the financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements 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. Auditors’ 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 general fund and the aggregate remaining fund information of the Tax Collector, as of September 30, 2016, and the respective changes in financial position and budgetary comparisons for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
2
Honorable Sally L. Daniel, C.F.C. Tax Collector Hernando County, Florida
INDEPENDENT AUDITORS' REPORT (Concluded)
Emphasis of Matter – Incomplete Presentation As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida (the Rules). In conformity with the Rules, the accompanying financial statements are intended to present the financial position, changes in financial position, and budgetary comparisons of the general fund and the aggregate remaining fund information, where applicable, only for that portion of the general fund (major fund) and the aggregate remaining fund information of Hernando County, Florida, that is attributable to the Tax Collector. They do not purport to, and do not, present fairly the financial position as a whole of Hernando County, Florida, as of September 30, 2016, and the changes in its financial position or budgetary comparisons for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Other Financial Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Tax Collector’s financial statements. The other financial information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. The other financial information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other financial information is fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 17, 2016, on our consideration of the Tax Collector’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 Tax Collector’s internal control over financial reporting and compliance. November 17, 2016 Sarasota, Florida
See accompanying notes.3
BALANCE SHEETGENERAL FUND
SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
TAX COLLECTOR
AssetsEquity in Pooled Cash 2,282,320$ Accounts Receivable 2,630 Due from Other Government Agencies 7,228
Total Assets 2,292,178
Liabilities and Fund Balance
LiabilitiesSalaries and Benefits Payable 61,766 Due to the Hernando County, Florida,
Board of County Commissioners 2,078,562 Due to Other Governmental Units 97,148 Unearned Revenue 54,702
Total Liabilities 2,292,178
Fund Balance 0
Total Liabilities and Fund Balance 2,292,178$
See accompanying notes.4
RevenuesCommissions:
Hernando County, Florida, Board of County Commissioners 2,904,168$
Other Governmental Units 135,736 Charges for Services 1,624,094 Investment (Loss) Income 1,389 Other Income 4,536
Total Revenues 4,669,923
ExpendituresGeneral Government:
Personal Services 2,340,194 Operating 143,822
Capital Outlay 10,197 (Total Expenditures) (2,494,213)
Excess of Revenues Over Expenditures 2,175,710
Other Financing (Uses) SourcesTransfers (out):
Distribution of Excess Commissionsto the Hernando County, Florida,Board of County Commissioners (2,078,562)
Distribution of Excess Commissionsto Other Governmental Units (97,148)
Total Other Financing (Uses) Sources (2,175,710)
Net Change in Fund Balances 0
Fund Balance, Beginning of Year 0
Fund Balance, End of Year 0$
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
HERNANDO COUNTY, FLORIDATAX COLLECTOR
GENERAL FUNDFOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.5
VarianceWith Final
BudgetOriginal Final PositiveBudget Budget Actual (Negative)
RevenuesCommissions:
Hernando County, Florida, Board of County Commissioners 2,786,000$ 2,786,000$ 2,904,168$ 118,168$
Other Governmental Units 128,000 128,000 135,736 7,736 Charges for Services 1,407,760 1,407,760 1,624,094 216,334 Investment Income 0 0 1,389 1,389 Other Income 3,000 3,000 4,536 1,536
Total Revenues 4,324,760 4,324,760 4,669,923 345,163
ExpendituresGeneral Government:
Personal Services 2,435,725 2,533,063 2,340,194 192,869 Operating 226,466 234,196 143,822 90,374
Capital Outlay 0 10,800 10,197 603 (Total Expenditures) (2,662,191) (2,778,059) (2,494,213) 283,846
Excess of Revenues OverExpenditures 1,662,569 1,546,701 2,175,710 629,009
Other Financing Sources (Uses)Transfers (out):
Distribution of Excess Commissionsto the Hernando County, Florida,Board of County Commissioners (1,588,252) (1,477,563) (2,078,562) (600,999)
Distribution of Excess Commissionsto Other Governmental Units (74,317) (69,138) (97,148) (28,010)
Total Other Financing Sources (Uses) (1,662,569) (1,546,701) (2,175,710) (629,009)
Net Change in Fund Balances 0$ 0$ 0$ 0$
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
HERNANDO COUNTY, FLORIDATAX COLLECTOR
BUDGET AND ACTUAL - GENERAL FUNDFOR THE YEAR ENDED SEPTEMBER 30, 2016
See accompanying notes.6
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDS
SEPTEMBER 30, 2016HERNANDO COUNTY, FLORIDA
TAX COLLECTOR
AssetsCash 2,212,834$ Equity in Pooled Cash 310,911 Due from Other Government Agencies 414
Total Assets 2,524,159
LiabilitiesDue to Individuals 12,050 Due to Other Government Agencies 299,298 Installment Tax Escrow 2,212,811
Total Liabilities 2,524,159$
7
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
Note 1 - Summary of Significant Accounting Policies
Reporting Entity Hernando County, Florida (the County), is a political subdivision of the State of Florida. It is governed by an elected Board of County Commissioners (the Board) and managed by an appointed County Administrator. The Hernando County, Florida, Tax Collector (the Tax Collector) is an elected constitutional officer of the County as provided for by the Constitution of the State of Florida. Pursuant to Chapter 195.087, Florida Statutes, the Tax Collector’s budget is submitted to the Florida Department of Revenue for approval, and a copy is forwarded to the Board for coordination with the Board’s budget.
As an elected official of the County, the Tax Collector is charged with responsibility for the collection of ad valorem taxes levied by the County, the School Board, special taxing districts, municipalities, and other taxes and fees levied by the County. The Tax Collector’s office is funded by fees charged based on the amount of collections. Additionally, the Tax Collector performs services for various state agencies. The following are the State of Florida agencies for which the Tax Collector collects fees:
■ Department of Highway Safety and Motor Vehicles―the Tax Collector serves as agent for
the Division of Motor Vehicles, processes title applications and transfers, renews and issues license plates and decals, handles boat title transfers, and registers both pleasure and commercial boats on an annual basis.
■ Florida Department of Revenue―collects sales tax on vessels, motor vehicles, and Lemon
Law fees.
■ Florida Fish and Wildlife Conservation Commission―issues hunting and fishing permit and licenses.
For financial reporting purposes, the Tax Collector is deemed to be part of the primary government of the County and, as such, is included in the County’s Comprehensive Annual Financial Report. Basis of Presentation The accompanying financial statements include all the funds and accounts of the Tax Collector’s office, but are not intended to be a complete presentation of the County as a whole. Except for this matter, they are otherwise in conformity with accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(4), Rules of the Auditor General—Local Governmental Entity Audits. The financial transactions of the Tax Collector are recorded in individual funds. Each fund is accounted for by providing a separate set of self-balance accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. These funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with specific regulations, restrictions, or limitations. The Tax Collector has one governmental type fund and two fiduciary type funds, both agency funds.
8
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Continued)
Basis of Presentation (Concluded) The focus of governmental fund financial statements is generally on major funds rather than reporting funds by type. GAAP sets forth minimum criteria (percentage of total assets, liabilities, revenues, or expenditures) for the determination of major funds. However, the general fund, by definition, is always a major fund. In the governmental fund financial statements, each major fund is reported in a separate column, but since the Tax Collector has only one governmental fund (the general fund); the governmental fund financial statements contain only one column. The focus on fiduciary type fund financial statements is by fund type, not major fund. The Tax Collector only has one fiduciary fund type, the agency fund type, but has two such funds. Accordingly, the two agency funds are combined into one column in the fiduciary fund financial statement. Agency funds are used to account for assets held in a trustee capacity or as an agent for individuals, private organizations, and other governments. Measurement Focus and Basis of Accounting Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus. The modified accrual basis of accounting is used by governmental funds. Agency funds use the accrual basis. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Tax Collector considers revenues to be available if they are collected within 45 days of the end of the current period. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured. Substantially, all of the Tax Collector’s revenue is received from taxing authorities. These monies are generally unrestricted and are revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenue at the time of receipt; earlier if the susceptible to accrual criteria are met. Charges for services and interest income are recognized when earned, provided they are also measurable and available to pay liabilities of the current period. Interest income is reported net of fees. Florida Statutes provide that the amount by which revenues and transfers exceed annual expenditures be remitted to the Board and other taxing districts within one month following the fiscal year during which the funding was provided. Florida Statutes further provide that the excess of revenues over expenditures held by the Tax Collector be distributed to each governmental agency in the same proportion as the commissions and fees paid. The amounts of these distributions are recorded as liabilities and as other financing uses in the accompanying financial statements.
9
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued) Note 1 - Summary of Significant Accounting Policies (Concluded)
Equity in Pooled Cash The Tax Collector pools substantially all cash except for change funds and the installment tax escrow account. Each fund’s equity share of the total pooled cash is included on the balance sheet under the caption “Equity in Pooled Cash.” Interest earned on this money is allocated to the various funds based upon the average cash balances within the consolidated account.
Prepaid Items Certain prepayments to vendors reflect costs applicable to future accounting periods. These prepayments are recorded as expenditures in the year paid.
Unearned Revenue Unearned revenue represents the portion of biennial service fees attributable to future years. Compensated Absences All full-time employees of the Tax Collector are entitled to time off with pay in accordance with policy. The employees are generally allowed to accumulate leave time up to a maximum of 300 hours. Upon voluntary termination or retirement, the employee is paid for up to 75% or 100% of the accumulated paid time off, respectively. Leave payments are included in expenditures in the period paid or due. The Tax Collector does not, nor is she required to, accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund, but rather is reported in the basic financial statements of the County. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported or disclosed in the financial statements and accompanying notes. Actual results could differ from those estimates. Governmental Accounting Standards Board (GASB) Statement No. 68 The Tax Collector participates in the Florida Retirement System (FRS) defined benefit pension plan and the Health Insurance Subsidy (HIS) defined benefit plan administered by Florida Division of Retirement. As a participating employer, the Tax Collector implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, which requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers’ proportionate share of the net pension liabilities and related pension amounts of the defined benefit pension plans. However, these liabilities would be recorded in government-wide financial statements, which are not required in this special-purpose presentation. As such, only the applicable disclosures required by GASB 68 have been presented herein. In addition, the cost-sharing multiple-employer plans mentioned above operate on a fiscal year ended June 30.
10
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued) Note 2 - Property Taxes
Taxes in Hernando County are levied by the Board and other taxing authorities. The millage levies are determined on the basis of estimates of revenue needs and the total taxable valuations within the jurisdiction of the Board and other taxing authorities. No aggregate ad valorem tax millage in excess of 10 mills on the dollar can be levied by the Board against property in the County, as specified in Florida Statutes, Section 200.071. Each year the total taxable property valuation is established by the Hernando County, Florida, Property Appraiser (the Property Appraiser), and the list of property assessments is submitted to the Florida Department of Revenue for approval. Taxes, assessed as of January 1 of each year, are due and payable on November 1 of each year or as soon thereafter as the assessment roll is opened for collection. Pursuant to Florida law, all owners of property have the responsibility of ascertaining the amount due and paying it before April 1 of the year following the year in which the tax was assessed. Property tax collections, sales, and liens are governed by Chapter 197 of the Florida Statutes. Assessed value is established by the Property Appraiser as of January 1 for the subsequent fiscal year of the County for tax roll preparation. Taxable value is computed after deducting from assessed value various exemptions including governmental, educational, religious, health care, and scientific properties, and qualified exemptions, including $25,000 or $50,000 homestead exemptions and added exemptions if a widow or disabled. The list of property assessments is submitted to the Florida Department of Revenue for approval. All property taxes are levied and become due and payable on November 1 of each year, and are delinquent on April 1 of the following year. Discounts are allowed for early payment of 4%, 3%, 2%, and 1% in November through February, respectively. Delinquent taxes on real property may be paid after the date of delinquency but prior to the sale of a tax certificate by paying all taxes, costs, advertising charges, and interest of 18% per annum. For all real property with delinquent taxes, the Tax Collector advertises as required by Florida Statute and sells tax certificates. All unsold certificates are issued to the County. Any persons owning real property upon which a tax certificate has been sold may redeem the property by paying the Tax Collector the face amount of the tax certificate plus interest and costs associated with the sale of the certificate. After taxes have been delinquent (April 1) for two years, the owner of a tax certificate may file an application for tax deed sale. The County is to do the same two years after taxes were due (November 1). All taxes imposed on any property become a first lien; superior to all other liens, as of January 1, of the year the taxes are levied.
11
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued) Note 3 - Budgetary Process
Florida Statutes Section 195.087 governs the preparation, adoption, and administration of the Tax Collector’s annual budget. Prior to August 1, the Tax Collector submits to the Florida Department of Revenue for approval a proposed operating budget for the general fund for the fiscal year commencing the following October 1. The operating budget includes the proposed expenditures for the upcoming year. Any subsequent amendments to the budget must be approved by the Florida Department of Revenue. The budget for the general fund is prepared on a basis consistent with GAAP. The annual budget serves as the legal authorization for expenditures. Budgetary control is maintained at the departmental major object expenditure level. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year-end. Budgetary changes within major object expenditure categories are made at the discretion of the Tax Collector. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year.
Note 4 - Cash and Investments At September 30, 2016, the carrying value of the Tax Collector’s cash and cash equivalents were
as follows: Carrying Credit Value Rating Cash on Hand $ 2,900 N/A Demand Deposits 4,803,165 N/A Total Cash and Cash Equivalents $ 4,806,065
Such amounts are reported as equity in pooled cash of $310,911 and $2,282,320 in the governmental and agency funds, respectively, and cash of $2,212,834 in the agency funds. The Tax Collector’s bank deposits are held in qualified public depositories (QPDs) pursuant to Chapter 280, Florida Statutes. Under this Chapter, each QPD is required to pledge collateral to the State Treasurer against the public deposits. In the event of default by a QPD, all claims for public deposits would be satisfied by the State Treasurer from the proceeds of federal deposit insurance, pledged collateral of the QPD in default and, if necessary, assessments against other QPDs of the same type as the depositor in default.
Authorized Investments The Tax Collector’s investment policy follows guidance set forth in Section 219.075, Florida Statutes regarding the deposit of funds received and the investment of surplus funds. The policy authorizes the following investments:
a. Florida Tax Collectors, Inc. Investment Trust Fund or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Florida Statute 163.01.
12
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued) Note 4 - Cash and Investments (Concluded) Authorized Investments (Concluded) b. Negotiable direct obligations of the United States Government, which are unconditionally
guaranteed by the United States Government. Such securities include, but are not limited to:
i. Treasury Bills ii. Treasury Notes
iii. Treasury Bonds
c. Nonnegotiable interest-bearing time certificates of deposit, money market accounts or savings accounts in banks/savings and loan associations organized under the laws of the United States, doing business and situated in this state, provided that such deposits are secured by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes.
d. Repurchase agreements for any of the investments authorized above in item b.
Credit Quality Risk The investment policy does not address credit quality. Instead, this risk is managed through the list of permitted investments.
Custodial Credit Risk The investment policy requires independent third party custodians, and limits the portfolio composition as follows:
■ Florida Tax Collectors, Inc. Investment Trust Fund—Maximum of 80% ■ Certificates of Deposit—Maximum of 50% ■ United States Government Securities—Maximum of 50%
In addition, the policy requires assets to be diversified to control the risk of over-concentration of assets in a specific maturity, issuer, instrument, counterparty dealer, or bank. The policy requires counterparties to be qualified public depositories or primary securities broker/dealers, as designated by the New York Federal Reserve.
Interest Rate Risk
The Tax Collector does not own any fixed rate investments, nor owned any such investments during 2016. The investment policy identifies safety of capital as the first objective, followed by liquidity, then finally, investment return. In addition, the investment policy seeks to manage interest rate risk by matching maturities to known cash needs and limiting maturities of operating funds to no more than one year. Additional guidance is provided for times when rates are expected to rise or fall.
Note 5 - Capital Assets
Pursuant to Florida Statutes, capital assets used by the Tax Collector are owned by the Board. The Tax Collector maintains custodial responsibility for the capital assets used by the office. The office space used in the Tax Collector’s operations is provided at no cost by the Board.
13
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued) Note 5 - Capital Assets (Concluded)
Capital assets paid for by the Tax Collector are recorded as expenditures in the general fund of the Tax Collector and are capitalized in the basic financial statements of the County. Donated capital assets are recorded directly on the County’s books at their estimated fair value on the date received. Depreciation is recorded at the County level.
Note 6 - Long-term Liability
The following is a summary of changes in general long-term liabilities, which are reported in the basic financial statements of the County:
Balance Balance October 1, September 30, 2015 Additions Retirements 2016 Accrued Compensated Absences $ 148,632 $ 143,375 $ (149,915) $ 142,092
Of these above obligations, $84,635 are expected to be paid during the fiscal year ended September 30, 2017, primarily from the general fund, and so are considered current. These liabilities are not reported in the fund financial statements of the Tax Collector since they have not matured.
Note 7 - Employee Retirement Plan
General Information about the Florida Retirement System (FRS) The FRS was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees. The FRS was amended in 1998 to add the Deferred Retirement Option Program under the defined benefit plan and amended in 2000 to provide a defined contribution plan alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined contribution pension plan is the FRS Investment Plan. Chapter 112, Florida Statutes, established the Retiree Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit pension plan, to assist retired members of any state-administered retirement system in paying the costs of health insurance.
Essentially all regular employees of the Tax Collector are eligible to enroll as members of the State-administered FRS. Provisions relating to FRS are established by Chapters 121 and 122, Florida Statutes; Chapter 112 Part IV, Florida Statutes; Chapter 238, Florida Statutes; and FRS Rules, Chapter 60S, Florida Administrative Code; wherein eligibility, contributions, and benefits are defined and described in detail. Such provisions may be amended at any time by further action from the Florida Legislature. The FRS is a single retirement system administered by the Florida Department of Management Services, Division of Retirement, and consists of two cost-sharing, multiple-employer defined-benefit plans and other nonintegrated programs. A comprehensive annual financial report of the FRS, which includes its financial statements, required supplementary information, actuarial report, and other relevant information, is available from the Florida Department of Management Services’ web site (www.dms.myflorida.com).
14
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued) Note 7 - Employee Retirement Plan (Continued)
General Information about the Florida Retirement System (FRS) (Concluded) The Tax Collector’s contributions to the FRS Plan totaled $214,328 for the fiscal year ended September 30, 2016 (all plans). FRS Pension Plan Plan Description. The FRS Pension Plan (Plan) is a cost-sharing multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program (DROP) for eligible employees. The general classes of membership applicable to the Tax Collector are as follows: ■ Regular Class―Members of the FRS who do not qualify for membership in the other classes. ■ Elected County Officer Class―Members who hold specified elective offices in local
government. ■ Senior Management Service Class―Members in senior management level positions. Employees enrolled in the Plan prior to July 1, 2011, vest at six years of creditable service and employees enrolled in the Plan on or after July 1, 2011, vest at eight years of creditable service. All vested members enrolled prior to July 1, 2011, are eligible for normal retirement benefits at age 62 or at any age after 30 years of service. All members enrolled in the Plan on or after July 1, 2011, once vested, are eligible for normal retirement benefits at age 65 or any time after 33 years of creditable service. Members of the Plan may include up to four years of credit for military service toward creditable service. The Plan also includes an early retirement provision; however, there is a benefit reduction for each year a member retires before his or her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-of-living adjustments to eligible participants. DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal retirement under the Plan to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in DROP for a period not to exceed 60 months after electing to participate, except that certain instructional personnel may participate for up to 96 months. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not include amounts for DROP participants, as these members are considered retired and are not accruing additional pension benefits.
15
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued)
Note 7 - Employee Retirement Plan (Continued) FRS Pension Plan (Continued) Benefits Provided. Benefits under the Plan are computed on the basis of age and/or years of service, average final compensation, and service credit. Credit for each year of service is expressed as a percentage of the average final compensation. For members initially enrolled before July 1, 2011, the average final compensation is the average of the five highest fiscal years’ earnings; for members initially enrolled on or after July 1, 2011, the average final compensation is the average of the eight highest fiscal years’ earnings. The total percentage value of the benefit received is determined by calculating the total value of all service, which is based on the retirement class to which the member belonged when the service credit was earned. The following chart shows the percentage value for each year of service credit earned:
As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by 3%. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement.
Class, Initial Enrollment, and Retirement Age/Years of Service % Value
Regular Class Members Initially Enrolled Before July 1, 2011
Retirement at age 63 or with 31 years of service 1.63
Retirement at age 64 or with 32 years of service 1.65
Retirement at age 65 or with 33 or more years of service 1.68
Regular Class Members Initially Enrolled on or After July 1, 2011
Retirement up to age 65 or up to 33 years of service 1.60
Retirement at age 66 or with 34 years of service 1.63
Retirement at age 67 or with 35 years of service 1.65
Retirement at age 68 or with 36 or more years of service 1.68
Elected County Officers 3.00Senior Management Service Class 2.00
16
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued)
Note 7 - Employee Retirement Plan (Continued) FRS Pension Plan (Concluded) Contributions. The Florida Legislature establishes contribution rates for participating employers and employees. Contribution rates during the 2015-2016 fiscal year were as follows:
The Tax Collector’s contributions (employer only) to the Plan totaled $180,251 for the fiscal year ended September 30, 2016. This excludes the HIS defined benefit pension plan contributions. Pension Liabilities. The FRS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Tax Collector’s proportionate share of the FRS net pension liability was $988,041. Further details of the FRS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report. HIS Pension Plan Plan Description. The HIS Pension Plan (HIS Plan) is a cost-sharing multiple-employer defined benefit pension plan established under section 112.363, Florida Statutes, and may be amended by the Florida Legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Florida Department of Management Services.
Year Ended June 30, 2016 Year Ended June 30, 2017
Class Employee Employer Employee Employer
FRS, Regular 3.00 5.56 3.00 5.80FRS, Elected County Officers 3.00 40.57 3.00 40.75FRS, Senior Management Service 3.00 19.73 3.00 20.05DROP - Applicable to Members from All of the Above Classes 0.00 11.22 0.00 11.33FRS, Reemployed Retiree (1) (1) (1) (1)
Notes: (1) Contribution rates are dependent upon retirement class in which reemployed
Percent of Gross Salary Percent of Gross Salary
17
NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued) Note 7 - Employee Retirement Plan (Continued)
HIS Pension Plan (Concluded) Benefits Provided. For the fiscal year ended September 30, 2016, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS Plan benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare.
Contributions. The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal years ended June 30, 2017 and 2016, the contribution rate was 1.66% of payroll respectively, pursuant to section 112.363, Florida Statues. The Tax Collector contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. The Tax Collector’s contributions to the HIS Plan totaled $25,256 for the fiscal year ended September 30, 2016. Pension Liabilities. The HIS operates with a fiscal year ended June 30. FRS Schedules of Employer Allocations were issued in April 2016 for the year ended June 30, 2015. Schedules of Employer Allocations for the year ended June 30, 2016, are not expected to be available until early 2017. As such, required disclosures for the year ended June 30, 2016, are not available. At September 30, 2015, the Tax Collector’s proportionate share of the HIS net pension liability was $489,891. Further details of the HIS Plan net pension liability, annual pension expense, actuarial assumptions, sensitivity analysis, and the other required disclosures can be found in the County-wide annual financial report. FRS – Defined Contribution Pension Plan The Tax Collector contributes to the FRS Investment Plan (Investment Plan), a defined contribution pension plan, for its eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the SBA, and is reported in the SBA’s annual financial statements and in the State of Florida Comprehensive Annual Financial Report. Service retirement benefits are based upon the value of the member’s account upon retirement. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. Tax Collector employees participating in DROP are not eligible to participate in the Investment Plan. Employer and employee contributions, including amounts contributed to individual member’s accounts, are
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NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Continued)
Note 7 - Employee Retirement Plan (Concluded)
FRS – Defined Contribution Pension Plan (Concluded) defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Allocations to the investment members’ accounts during the 2015-16 fiscal year were as follows:
For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the FRS Pension Plan is transferred to the Investment Plan, the member must have the years of service required for FRS Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five year period, the employee will regain control over their account. If the employee does not return within the five year period, the employee will forfeit the accumulated account balance. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04% of payroll and by forfeited benefits of Investment Plan members. For the fiscal year ended September 30, 2016, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to the Tax Collector. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income. The Tax Collector’s contributions to the Investment Plan totaled $8,821 for the fiscal year ended September 30, 2016.
Percent of GrossClass Compensation
FRS, Regular 6.30
FRS, Elected County Officers 11.34
FRS, Senior Management Service 7.67
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NOTES TO FINANCIAL STATEMENTS HERNANDO COUNTY, FLORIDA
TAX COLLECTOR SEPTEMBER 30, 2016
(Concluded) Note 8 - Postemployment Benefits Other Than Pensions
The Board offers postemployment health care benefits and life insurance to all retired employees of the Tax Collector’s Office and their dependents. Participating retirees are required to reimburse the Board for 100% of the premium cost, which is netted against the premium payment, so that no net expense is initially recorded in the Board’s financial statements. However, these retirees are receiving an “implicit subsidy” because the premium is a group rate which includes active, lower cost employees. This implicit subsidy has a cost, which under GAAP is required to be disclosed in these financial statements. However this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Tax Collector’s Office. Accordingly, these calculations and disclosures can be found in the County-wide annual financial report.
Note 9 - Risk Management
The Tax Collector participates in the insurance programs of the Board including general liability, workers’ compensation, property and casualty, and employee health insurance. These risk management activities are handled through internal service funds maintained by the Board. All liabilities associated with these self-insured risks are reported in the basic financial statements of the Board. The purpose of these funds is to administer employee life, health, workers’ compensation, unemployment, disability insurance, and property and liability insurance. These funds account for the risk financing activities of the County, but do not constitute a transfer of risk from the County. Significant losses are covered by commercial insurance for all major programs except workers’ compensation for which the County retains risk of loss. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage in any of the last three years. The Tax Collector paid premiums of $417,325 for employee life and health insurance coverage to the Board for the year ended September 30, 2016. The Board’s Workers’ Compensation internal service fund is a self-insurance program for workers’ compensation claims on losses up to $750,000 per occurrence. The workers’ compensation fund has indemnified the Tax Collector against any losses in a given year in excess of the fee charged. In the event actual losses are less than the fee charged, such amounts will be retained in the Workers’ Compensation fund. Claim settlements and losses are accrued and subsequently paid from the Workers’ Compensation fund. Premium payments to the Board by the Tax Collector, which are based on a percentage of salaries paid according to salary classifications, totaled $20,481 for the year ended September 30, 2016.
OTHER FINANCIAL INFORMATION
AGENCY FUNDS Agency funds are used to account for assets held by a governmental unit as trustee or agent for individuals, private organizations, and other governmental units. TAX AND TAG FUND―This fund is used to account for the receipt and distribution of ad valorem taxes, hunting and fishing licenses, boat registrations and titles, motor vehicle registrations, titles, and sales tax, and permits collected for Hernando County and other independent taxing authorities. DELINQUENT TAX FUND―This fund is used to account for the receipt and distribution of tax certificates.
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Tax Delinquent and Tag Tax Total
AssetsCash 2,212,834$ 0$ 2,212,834$ Equity in Pooled Cash 298,861 12,050 310,911 Due from Other Government Agencies 414 0 414
Total Assets 2,512,109 12,050 2,524,159
LiabilitiesDue to Individuals 0 12,050 12,050 Due to Other Government Agencies 299,298 0 299,298 Installment Tax Escrow 2,212,811 0 2,212,811
Total Liabilities 2,512,109$ 12,050$ 2,524,159$
COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
HERNANDO COUNTY, FLORIDATAX COLLECTOR
AGENCY FUNDSSEPTEMBER 30, 2016
OTHER REPORTS
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INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Sally L. Daniel, C.F.C. Tax Collector Hernando County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the general fund and the aggregate remaining fund information of the Hernando County, Florida, Tax Collector (the Tax Collector), as of and for the year ended September 30, 2016, and the related notes to the financial statements, and have issued our report thereon dated November 17, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Tax Collector’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstance for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Tax Collector’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Tax Collector’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
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Honorable Sally L. Daniel, C.F.C. Tax Collector Hernando County, Florida
INDEPENDENT AUDITORS’ 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
(Concluded) Compliance and Other Matters As part of obtaining reasonable assurance about whether the Tax Collector’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. November 17, 2016 Sarasota, Florida
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INDEPENDENT ACCOUNTANTS’ REPORT Honorable Sally L. Daniel, C.F.C. Tax Collector Hernando County, Florida We have examined Hernando County, Florida, Tax Collector’s (the Tax Collector) compliance with the requirements of Section 218.415, Florida Statutes, as of and for the fiscal year ended September 30, 2016, as required by Section 10.556(10)(a), Rules of the Auditor General. Management is responsible for the Tax Collector’s compliance with those requirements. Our responsibility is to express an opinion on the Tax Collector’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Tax Collector’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Tax Collector’s compliance with specified requirements. In our opinion, the Tax Collector complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Tax Collector, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. November 17, 2016 Sarasota, Florida
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MANAGEMENT LETTER Honorable Sally L. Daniel, C.F.C. Tax Collector Hernando County, Florida Report on the Financial Statements We have audited the financial statements of the general fund and the aggregate remaining fund information of the Hernando County, Florida, Tax Collector (the Tax Collector), as of and for the fiscal year ended September 30, 2016, and have issued our report thereon dated November 17, 2016. Auditors’ Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports We have issued our Independent Auditors’ 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, and Independent Accountants’ Report on Compliance with Section 218.415, Florida Statutes. Disclosures in those reports, which are dated November 17, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the management letter, unless disclosed in the notes to the financial statements. In that regard, the Tax Collector was established by the Constitution of the State of Florida, Article VIII, Section 1(d). The Tax Collector does not have any component units. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.
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Honorable Sally L. Daniel, C.F.C. Tax Collector Hernando County, Florida
MANAGEMENT LETTER (Concluded)
Other Matters (Concluded) Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Tax Collector, its management, and the Board of County Commissioners of Hernando County, Florida, and is not intended to be, and should not be, used by anyone other than these specified parties. We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of our audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. November 17, 2016 Sarasota, Florida