INDEPENDENT AUDITORS' REPORT

Transcription

1 FINANCIAL SECTION This section contains the following subsections: INDEPENDENT AUDITORS REPORT MANAGEMENT S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION OTHER SUPPLEMENTARY INFORMATION Financial Section

2 INDEPENDENT AUDITORS' REPORT Board of County Commissioners Marion County, Florida Ocala, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of Marion County, Florida (Marion County) as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise Marion 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 audit opinions. 1

3 Board of County Commissioners Marion County, Florida Ocala, 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, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of Marion County, as of September 30, 2014, and the respective changes in financial position, and where applicable, cash flows, thereof and the respective budgetary comparison for the general fund and major special revenue funds, for the year then ended in conformity 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 management s discussion and analysis and schedule of funding progress and employee contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States 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 Marion County's financial statements as a whole. The introductory section, combining and individual nonmajor fund statements, schedules and statistical section listed in the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate 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 information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory section and statistical section 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. 2

4 Board of County Commissioners Marion County, Florida Ocala, Florida INDEPENDENT AUDITORS REPORT (Concluded) Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 5, 2015, on our consideration of Marion 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 Marion County s internal control over financial reporting and compliance. March 5, 2015 Ocala, Florida 3

5 MANAGEMENT S DISCUSSION AND ANALYSIS September 30, 2014 This Management s Discussion and Analysis ( MD&A ) presents an overview of the financial activities of Marion County, Florida (the County ) for the fiscal year ended September 30, Please read it in conjunction with the Letter of Transmittal and the County s financial statements. Financial Highlights The assets and deferred outflows of the County exceeded its liabilities and deferred inflows at the close of fiscal year 2014 by $1,571,592,570 (net position). Of this amount, $75,449,686 (unrestricted net position) may be used to meet the government s ongoing obligations to citizens and creditors. The County s change in net position increased by $20,623,171 or 231% in comparison with the change in net position in the prior year. At September 30, 2014, the County s governmental funds reported combined ending fund balances of $143,529,917, a decrease of $14,875,181 in comparison with the prior year. At September 30, 2014, unassigned fund balance for the General Fund was $13,187,592 or 8.2% of total general fund expenditures and transfers out. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the County s basic financial statements. The County s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Organization and Flow of Financial Section Information Independent Auditors' Report Provides the opinion of the Independent Auditors on the fair presentation of the basic financial statements. Management's Discussion and Analysis This supplementary information is required for state and local government financial statements, and is intended to provide a narrative introduction, overview, and analysis. Government-wide Financial Statements Provides information on governmental and businesstype activities of the primary government. Fund Financial Statements Provides information on the financial position of specific funds of the primary government. Notes to Financial Statements Provides a summary of significant accounting policies and related disclosures. 4

6 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Government-wide financial statements The government-wide financial statements, which consist of the following two statements, are designed to provide readers with a broad overview of the County s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the County s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. Additionally, nonfinancial factors, such as a change in the County s property tax base or the condition of County facilities and infrastructure, should be considered to assess the overall health of the County. The statement of activities presents information showing how the government s net position changed during fiscal year All changes in net position are reported as soon as the underlying event, giving rise to the change, occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of these financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County include general government, physical environment, public safety, transportation, economic environment, human services, culture/recreation, and court related activities. The business-type activities of the County include solid waste disposal and water and wastewater utilities. The government-wide financial statements include not only the County itself (known as the primary government) but also legally separate entities known as Component Units. Component units, which are other governmental units over which the County Commission can exercise influence and/or may be obligated to provide financial subsidy, are presented as a separate column in the government-wide financial statements and as individual activities in the basic and fund financial statements. The County s component units will not be addressed in this MD&A. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 5

7 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 The County maintains dozens of individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, County Transportation Maintenance Fund, MSTU for Law Enforcement, Fire Rescue & EMS Fund, and Public Improvement Transportation Capital Projects Fund, which are considered to be major funds. Individual fund data for the General Fund, combining the Board of County Commissioners, Clerk of the Circuit Court and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector is provided in the form of combining statements in the other supplemental information section of this report. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements in the other supplemental information section of this report The County adopts an annual appropriated budget for its general, special revenue, and debt service funds and project-length budgets for the capital projects funds. Budgetary comparison schedules have been provided for these funds to demonstrate budgetary compliance. The County maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses enterprise funds to account for the fiscal activities relating to solid waste disposal, and water and wastewater utilities. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County s various functions. The County uses the internal service fund to account for its self-insurance and risk management program. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Solid Waste and Marion County Utility funds, which are considered to be major funds of the County. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the County s own programs. The accounting used for fiduciary funds is similar to proprietary funds. The County only has agency funds. Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other information In addition to the basic financial statements and accompanying notes, required supplementary information is included which present a budgetary comparison schedule for the County s major capital project fund, and a schedule of funding progress and schedule of employer contributions for other post employment benefits. The combining statements referred to earlier in connection with nonmajor governmental funds and fiduciary funds are presented in the other supplemental information section of this report, along with budgetary comparison schedules for the County s nonmajor governmental funds. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government s financial position. In the case of the County, assets and deferred outflows exceeded liabilities and deferred inflows by $1,571,592,570 at the close of the fiscal year ended September 30,

8 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 At the end of fiscal year 2014, the County is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The largest portion of the County s net position (88.4%) reflects its net investment in capital assets. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. The County has restricted net position ($106,560,167) for debt service, capital projects, law enforcement, fire & rescue, resource conservation, transportation and other purposes. The remaining balance of unrestricted net position ($75,449,686) may be used to meet the government s ongoing obligations to citizens and creditors. Marion County, Florida Net Position Governmental Activities Business-type Activities Total Current and other assets $ 194,725,310 $ 206,068,618 $ 104,077,936 $ 104,093,956 $ 298,803,246 $ 310,162,574 Capital Assets (Net) 1,393,262,273 1,380,574, ,935, ,474,720 1,537,198,235 1,518,049,050 Total Assets 1,587,987,583 1,586,642, ,013, ,568,676 1,836,001,481 1,828,211,624 Deferred Outflows of Resources - - 3,614,200 3,831,780 3,614,200 3,831,780 Total Deferred Outflows - - 3,614,200 3,831,780 3,614,200 3,831,780 Current and other liabilities 19,873,504 18,382,774 11,582,115 11,713,583 31,455,619 30,096,357 Long-term Liabilities 110,062, ,099, ,448, ,816, ,511, ,915,901 Total Liabilities 129,936, ,482, ,030, ,529, ,966, ,012,258 Deferred Inflows of Resources 56, , , ,561 Total Deferred Inflows 56, , , ,561 Net Position: Net Investment in Capital Assets 1,341,090,566 1,330,395,327 48,492,151 42,870,778 1,389,582,717 1,373,266,105 Restricted 100,088, ,632,320 6,472,081 6,611, ,560, ,244,214 Unrestricted 16,816,579 20,012,070 58,633,107 56,388,196 75,449,686 76,400,266 Total Net Position $ 1,457,995,231 $ 1,454,039,717 $ 113,597,339 $ 105,870,868 $ 1,571,592,570 $ 1,559,910,585 There was a net increase of $7,726,471 in net position reported in connection with the County s business-type activities. This increase represents 13.2% of total unrestricted net position for business-type activities at year end. Governmental activities increased the County s net position by $3,955,514. This increase represents 23.5% of the total unrestricted net position for governmental activities. Key reasons for these changes are presented in the following pages for governmental and business-type activities. 7

9 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Marion County, Florida Changes in Net Position Governmental Activities Business-type Activities Total REVENUES Program Rev enues: Charges for Serv ices $ 75,311,106 $ 74,996,570 $ 35,186,100 $ 35,846,113 $ 110,497,206 $ 110,842,683 Operating Grants and Contributions 8,335,073 8,539, ,173 56,311 8,439,246 8,595,762 Capital Grants and Contributions 22,982,897 16,724,520 1,579,722 6,338,423 24,562,619 23,062,943 General Rev enues: Property Tax es 92,296,160 88,328, ,296,160 88,328,566 Other Tax es 46,021,532 42,639, ,021,532 42,639,666 Other 11,641,991 11,356,125 2,078,266 1,765,356 13,720,257 13,121,481 Total Revenues 256,588, ,584,898 38,948,261 44,006, ,537, ,591,101 EXPENSES General Gov ernment 37,322,619 37,925, ,322,619 37,925,988 Public Safety 132,850, ,807, ,850, ,807,590 Phy sical Env ironment 3,268,232 3,661, ,268,232 3,661,367 Transportation 35,006,802 38,529, ,006,802 38,529,108 Economic Env ironment 6,233,275 4,655, ,233,275 4,655,508 Human Serv ices 12,944,315 15,011, ,944,315 15,011,096 Culture/Recreation 12,239,889 12,107, ,239,889 12,107,933 Court-Related 10,096,192 10,626, ,096,192 10,626,062 Interest on Long-term Debt 2,671,126 3,307, ,671,126 3,307,866 Solid Waste - - 7,385,261 15,546,828 7,385,261 15,546,828 Water and Wastew ater ,836,529 22,352,941 23,836,529 22,352,941 Total Expenses 252,633, ,632,518 31,221,790 37,899, ,855, ,532,287 Ex cess (Deficiency ) Before Transfers 3,955,514 (15,047,620) 7,726,471 6,106,434 11,681,985 (8,941,186) Transfers Change in Net Position 3,955,514 (15,047,620) 7,726,471 6,106,434 11,681,985 (8,941,186) Beginning Net Position 1,454,039,717 1,469,087, ,870,868 99,764,434 1,559,910,585 1,568,851,771 Ending Net Position $ 1,457,995,231 $ 1,454,039,717 $ 113,597,339 $ 105,870,868 $ 1,571,592,570 $ 1,559,910,585 Governmental activities Governmental activities increased the County s net position by $3,955,514. The primary reason for this increase was from greater capital asset additions than depreciation expense for the year of $12.8 million. The largest factor in this was capital contributions of transportation improvements totaling $11.9 million. The revenues that were used for the capital purchases were recognized in this fiscal year in the government-wide financial statements; however the capital assets are depreciated over many years. Thus the related expense is largely not recognized in the same year as the revenues. Additionally, property tax revenue increased $4.0 million due to the millage rate increase of.4 mills for the MSTU for Law Enforcement. 8

10 MARION COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Expenses and Program Revenues Governmental Activities Functions/Programs Expenses General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture/Recreation Court-Related Interest on Long-term Debt $ 37,322, ,850,795 3,268,232 35,006,802 6,233,275 12,944,315 12,239,889 10,096,192 2,671,126 % of Total 14.8% $ 52.6% 1.3% 13.9% 2.5% 5.1% 4.8% 4.0% 1.1% Program Revenues 8,643,200 53,361,838 3,788,445 26,335,167 4,558, ,504 1,972,815 7,243,228 - $ 252,633, % $ 106,629, ,000,000 % of Total 8.1% $ 50.0% 3.6% 24.6% 4.3% 0.7% 1.9% 6.8% 0.0% 120,000,000 Expenses Program Revenues 80,000,000 60,000,000 40,000,000 20,000,000-9 (28,679,419) (79,488,957) 520,213 (8,671,635) (1,674,396) (12,218,811) (10,267,074) (2,852,964) (2,671,126) 100.0% $ (146,004,169) Expenses and Program Revenues - Governmental Activities 100,000,000 Net (Expense) Revenue

11 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Revenue by Source Governmental Activities % of Description Revenues Total Charges for Services $ 75,311, % Operating Grants and Contributions 8,335, % Capital Grants and Contributions 22,982, % Property Tax 92,296, % Sales Tax 18,437, % Public Service Tax 2,835, % Gas Tax 22,780, % State Revenue Sharing 7,548, % Tourist Development Tax 1,047, % Other Taxes 920, % Intergovernmental Revenues 587, % Interest Income 698, % Miscellaneous 2,806, % $ 256,588, % Revenues by Source - Governmental Activities Sales Tax, 7.2% Property Tax, 36.0% Gas Tax, 8.9% Operating Grants and Contributions, 3.2% Public Service Tax, 1.1% Capital Grants and Contributions, 9.0% State Revenue Sharing, 2.9% Tourism Tax, 0.4% Other Taxes, 0.4% Intergovernmental Revenues, 0.2% Interest Income, 0.3% Charges for Services, 29.4% Miscellaneous, 1.0% 10

12 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Business-type activities Business-type activities increased the County s net position by $7,726,471. The primary reason for this increase was the Solid Waste Fund s net income of $7.8 million. The Solid Waste Fund's revenues were in line with the prior year; however, operating expenses were $8.4 million less than the prior year. One factor in this decrease in expenses was an adjustment in the landfill closure cost liability that reduced current year expenses by $1.5 million from a recalculation of the urban cell estimate. This was a decrease in landfill closure provision expense of $7.8 million from the prior year. The Utility Fund s revenues were more than its operating expenses by $1.6 million, which appears to indicate that the County's current rates are sufficient to sustain the system at this time. Expenses and Program Revenues Business-type Activities Functions/Programs Expenses % of Total Program Revenues % of Total Net (Expense) Revenue Solid Waste $ 7,385, % $ 14,842, % $ 7,457,440 Water and Wastewater 23,836, % 22,027, % (1,809,235) $ 31,221, % $ 36,869, % $ 5,648,205 11

13 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Revenues by Source Business-type Activities % of Description Revenues Total Charges for Services $ 35,186, % Operating Grants and Contributions 104, % Capital Grants and Contributions 1,579, % Interest Income 322, % Miscellaneous 1,688, % Gain on Sale of Capital Assets 67, % $ 38,948, % Financial Analysis of the County s Funds As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental funds The focus of the County s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. As of the end of fiscal year 2014, the County s governmental funds reported combined ending fund balances of $143,529,917, a decrease of $14,875,181 in comparison with the prior year. The County s General Fund Unassigned fund balance is $13,187,592. The majority of unassigned fund balance consists of funds budgeted in the subsequent year for contingency or as a fund balance carry forward. The County s governmental funds reported combined ending Restricted fund balance of $108,881,174. This includes 12

14 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 amounts that can only be spent for specific purposes as stipulated by external resource providers either constitutionally or through enabling legislation such as the Florida Statutes, laws and regulations, or grantors. The County s governmental funds reported Committed fund balances of $3,437,058 and Assigned fund balances of $15,946,060, which are available for spending in accordance with related ordinances or County policy. The remainder of fund balance is Nonspendable to indicate that it is not available for spending because it is not in spendable form: for inventories ($1,878,743) and for prepaid items ($199,290). The General Fund is the chief operating fund of the County. At the end of fiscal year 2014, unassigned fund balance of the General Fund was $13,187,592, while total fund balance reached $27,289,748. As a measure of the General Fund s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 8.3% of the total General Fund expenditures, while total fund balance represents 17.2% of that same amount. The decrease in fund balance of the County s General Fund was $4,543,155 during the current fiscal year, however, the change from prior year was an increase of $2,767,987. This resulted from an increase in revenues and transfers in of $2.8 million from the prior fiscal year. Intergovernmental revenues increased by $1.5 million for grants. The following graph displays the General Fund current expenditures by function for FY14 and FY13 (it does not include debt service or other financing uses). General Fund Current Expenditures by Function 100% 80% 60% 40% 20% Court-Related Culture/Recreation Human Services Economic Environment Transportation Physical Environment Public Safety General Government 0% FY14 FY13 The County Transportation Maintenance Fund was established to account for the operations of the Transportation Department. At the end of fiscal year 2014, restricted fund balance was $6,008,654 and this represents 34% of the fund s total expenditures and transfers out. The fund balance decreased $1,091,611 from the prior year. The underlying reason is an increase in transportation expenditures for road maintenance projects during the year. The MSTU for Law Enforcement Fund provides funding in the form of ad valorem taxes for the Marion County Sheriff s Department. At the end of fiscal year 2014, restricted and assigned fund balance totaled $4,984,753; this amount represents 15% of the fund s total expenditures and transfers out. The fund balance increased $35,733 from the prior year. The underlying reason for the minimal increase was from a millage increase to offset growing costs of providing law enforcement services within the County. 13

15 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 The Fire, Rescue and EMS fund was established to promote health, safety and welfare of the citizens of Marion County. At the end of fiscal year 2014, fund balance totaled $16,356,912, a decrease of $1,185,959 from the prior fiscal year. This was mainly a result of a minimal increase in costs to provide the public safety services to the citizens of the County. The Public Improvement Transportation Capital Projects Fund was established to account for transportation projects funded from bond proceeds. The restricted and assigned fund balance total of $19,752,619 represents the balance of the bond proceeds being carried forward to the next fiscal year for road construction capital projects. The fund balance decreased by $7,852,534 due to expenditures for the year's road construction projects. Proprietary funds The County s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. All enterprise funds are reported as major funds. As previously discussed, the internal service fund is combined with governmental funds to arrive at governmental activities. Unrestricted net position of proprietary funds at the end of the year amounted to: Unrestricted Net Position Fund Solid Waste $ 43,936,325 $ 37,457,603 Marion County Utility 14,696,782 18,930,593 Total $ 58,633,107 $ 56,388,196 There was an increase in unrestricted net position for the Solid Waste Fund of $6,478,722 resulting from landfill closure care liability adjustment previously discussed. The decrease in unrestricted net position for the Utility Fund is due to an increase in operating expenses of $1.7 million from the prior year and minimal nonoperating revenues to cover interest expense. General Fund Budgetary Highlights The General Fund s original budget decreased by $289,810 to arrive at the final amended budget for expenditures and transfers out. The largest changes were a decrease to general government mostly from contingency, and increases to public safety for law enforcement costs, and economic environment for public assistance grants. The changes within functions are summarized in the table below. Original Budget Final Budget Change General Government $ 55,841,171 $ 48,056,841 $ (7,784,330) Public Safety 89,581,091 93,436,313 3,855,222 Physical Environment 1,155,773 1,252,954 97,181 Transportation 1,035,682 1,039,907 4,225 Economic Environment 6,815,614 9,048,398 2,232,784 Human Services 15,843,212 15,873,300 30,088 Culture/Recreation 12,132,334 12,238, ,046 Court-Related 8,664,725 8,759,551 94,826 Transfers Out 45,676,138 46,750,286 1,074,148 $ 236,745,740 $ 236,455,930 $ (289,810) 14

16 MARION COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 The General Fund under spent the final budget by $75,720,331. The variance within functions are summarized in the table below. Actual Expenditures Final Budget Change General Government $ 31,708,665 $ 48,056,841 $ 16,348,176 Public Safety 92,005,694 93,436,313 1,430,619 Physical Environment 1,035,481 1,252, ,473 Transportation 966,756 1,039,907 73,151 Economic Environment 4,462,969 9,048,398 4,585,429 Human Services 11,171,309 15,873,300 4,701,991 Culture/Recreation 9,236,541 12,238,380 3,001,839 Court-Related 8,358,079 8,759, ,472 Transfers Out 1,790,105 44,960,181 46,750,286 $ 160,735,599 $ 236,455,930 $ 75,720,331 The largest difference between actual expenditures and the final budget resulted from $45 million in budget transfers. The majority of unspent budget in general government is due to unspent budgeted contingency. Transfers out are offset by the elimination of budgeted General Fund transfers in, so they are not an actual budgeted expenditure. Overhead costs and fuel allocations in the amount of $7.9 million in general government are budgeted, but eliminated expenditures. General Fund Actual vs Budgets Actual Expenditures Final Budget Original Budget $100,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $- Capital Asset and Debt Administration Capital Assets The County s investment in capital assets for its governmental and business-type activities as of September 30, 2014 amounts to $1,537,198,235 (net of accumulated depreciation and amortization). This investment in capital assets includes land, buildings, improvements other than buildings (including leasehold improvements), equipment, software, infrastructure, and construction in progress. The total increase in the County s investment in capital assets for the current fiscal year was $19.1 million ($12.7 million for governmental activities and $6.4 million for business-type activities). 15

17 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Major capital asset events during the current fiscal year included the following: The bulk of the increase in capital assets related to governmental activities is from road improvement projects and other infrastructure additions of $24 million. Net capital assets related to business-type activities were consistent with the prior year as capital asset additions were almost level with the total depreciation expense. Capital improvements other than buildings continued to be the significant asset classification with an increase of $13.5 million from the prior year. Marion County, Florida Capital Assets (Net) Governmental Activities Business-type Activities Total Land $ 411,585,518 $ 399,934,037 $ 7,738,369 $ 7,571,099 $ 419,323,887 $ 407,505,136 Buildings 227,906, ,355,392 8,764,484 7,523, ,671, ,878,839 Improvements Other than Buildings 51,990,715 51,429, ,038, ,580, ,028, ,010,175 Equipment 115,830, ,554,945 12,394,561 10,660, ,224, ,215,456 Software 2,950,903 1,375,506 2,950,903 1,375,506 Infrastructure 1,205,974,185 1,182,178, ,205,974,185 1,182,178,753 Construction in Progress 1,809,027 1,319,704 6,612,519 5,330,894 8,421,546 6,650,598 Construction in Progress - Infrastructure 19,123,338 17,268, ,123,338 17,268,435 2,037,170,553 1,993,416, ,548, ,666,543 2,289,718,689 2,228,082,898 Less: Accumulated Depreciation (643,908,280) (612,842,025) (108,612,174) (97,191,823) (752,520,454) (710,033,848) Capital Assets, net $ 1,393,262,273 $ 1,380,574,330 $ 143,935,962 $ 137,474,720 $ 1,537,198,235 $ 1,518,049,050 Additional information on the County s capital assets, including major construction commitments, can be found in Note 4 of this report. Long-term debt At the end of fiscal year 2014, the County had total bonded debt outstanding of $134,638,352. Of this amount, $2,780,000 comprises debt backed by the full faith and credit of the government and $12,623,352 special assessment debt for which the government is not liable in the event of default by the property owners subject to the assessment. The remainder of the County s bonded debt $119,235,000 represents bonds secured solely by specified revenue sources (i.e., revenue bonds). Additionally, the County had notes payable of $29,214,257 at the end of fiscal year Marion County, Florida Outstanding Notes Payable and Bonded Debt Governmental Activities Business-type Activities Total General Obligation Bonds $ 2,780,000 $ 3,400,000 $ - $ - $ 2,780,000 $ 3,400,000 Revenue Bonds 51,455,000 56,720,000 67,780,000 70,580, ,235, ,300,000 Special Assessment Bonds 12,623,352 12,050, ,623,352 12,050,829 Notes Payable 1,169,274-28,044,983 24,838,452 29,214,257 24,838,452 $ 68,027,626 $ 72,170,829 $ 95,824,983 $ 95,418,452 $ 163,852,609 $ 167,589,281 16

18 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 The County s outstanding notes and bonded debt decreased by $3.7 million. This decrease is attributed to scheduled debt service principal reductions in the year. The County also issued $3.1 million in special assessment debt in the current year. Additional information on the County s debt, including any major changes to the County s credit ratings, can be found in Note 5 of this report. Economic Factors and Next Year s Budgets and Rates The annual average unemployment rate for the County for 2014 was 7.1% which was a decrease of 1.2% from the prior year. The average adjusted rate for 2013 was 8.3%. The taxable assessed value decreased 0.2% in the 2014 fiscal year. Population increased approximately 0.7% from the prior fiscal year to 337,445 at September 30, During the current fiscal year, unassigned fund balance in the General Fund decreased to $13,187,592. The County has budgeted $25,866,454 for spending in the 2015 fiscal year budget, of this amount $12,964,911 was assigned to the subsequent year budget. The ad valorem tax rate for the General Fund remained the same at 3.19% for the 2015 fiscal year budget. There was no increase in mills. Rates for the County s water and wastewater utilities did not change in fiscal year There is a scheduled increase in rates for fiscal year In an effort to help stimulate job creation and the economy the County is awarding Economic Development Financial Incentive Grants. Both Marion County and the City of Ocala are working together with the Economic Development Council to develop potential industrial parks and bring new jobs to Marion County. Requests for Information This financial report is designed to present users with a general overview of the County s finances and to demonstrate the County s accountability. If you have questions concerning any of the information provided in this report or need additional financial information, contact the Marion County Clerk of the Circuit Court and Comptroller, Finance Department, 110 NW First Avenue, Ocala, Florida,

19

20 STATEMENT OF NET POSITION September 30, 2014 Governmental Activities Business-type Activities Total Component ASSETS Cash and Cash Equivalents $ 9,959,436 $ 9,558,641 $ 19,518,077 $ 588,647 Restricted Cash and Cash Equivalents 67,663,424 14,045,199 81,708,623 - Investments 58,502,477 57,585, ,087,946 - Restricted Investments 32,424,662-32,424,662 - Accounts Receivable, Net 3,824,167 1,238,590 5,062, ,926 Accrued Interest Receivable 204, , ,404 - Special Assessments Receivable 11,039,140-11,039,140 - Due from Other Governments 9,025, ,067 9,620,928 26,435 Internal Balances 4,000 (4,000) - - Inventories 1,878, ,676 2,808,419 - Prepaid Items 199, ,290 1,016 Other Assets - 20,000,000 20,000,000 - Capital Assets Not Being Depreciated 432,517,883 14,350, ,868,771 - Capital Assets Being Depreciated, Amortized (Net) 960,744, ,585,074 1,090,329,464 81,661 Total Assets 1,587,987, ,013,898 1,836,001, ,685 DEFERRED OUTFLOWS OF RESOURCES Deferred Amount on Refunding - 3,614,200 3,614,200 - Total Deferred Outflows of Resources - 3,614,200 3,614,200 - LIABILITIES Accounts Payable 4,974,396 1,368,686 6,343,082 7,651 Contracts Payable 997, ,387 1,362,525 - Accrued Liabilities 2,137, ,880 2,285,895 - Accrued Interest Payable 871, ,351 1,756,430 - Due to Other Governments 2,402,946 16,543 2,419,489 - Due to Individuals 1,205,746-1,205,746 - Deposits 353,133 1,508,275 1,861,408 - Unearned Revenue 4,948,812 7,288,993 12,237, Advanced Grants 1,983,239-1,983,239 - Noncurrent Liabilities: Due Within One Year 13,327,610 5,881,858 19,209,468 - Due in More Than One Year 96,734, ,566, ,301,769 - Total Liabilities 129,936, ,030, ,966,856 8,340 DEFERRED INFLOWS OF RESOURCES Deferred Amount on Refunding 56,255-56,255 - Total Deferred Inflows of Resources 56,255-56,255 - NET POSITION Net Investment in Capital Assets 1,341,090,566 48,492,151 1,389,582,717 81,661 Restricted for: Debt Service 17,235,015 5,353,622 22,588,637 - Capital Projects 25,762,002 1,118,459 26,880,461 - Law Enforcement 8,463,736-8,463,736 - Fire and Rescue 20,150,676-20,150,676 - Resource Conservation 12,131,020-12,131,020 - Transportation 10,144,523-10,144,523 - Other Purposes 6,201,114-6,201,114 - Unrestricted 16,816,579 58,633,107 75,449, ,684 Total Net Position $ 1,457,995,231 $ 113,597,339 $ 1,571,592,570 $ 884,345 The notes to the financial statements are an integral part of the financial statements. Units 19

21 FUNCTIONS/PROGRAMS Primary Government: MARION COUNTY, FLORIDA STATEMENT OF ACTIVITIES For the Year Ended September 30, 2014 Expenses Charges for Services Program Revenues Operating Grants and Contributions Capital Grants and Contributions Governmental Activities: General Government $ 37,322,619 $ 8,643,200 $ - $ - Public Safety 132,850,795 50,090,680 3,212,217 58,941 Physical Environment 3,268,232 3,616, ,508 19,207 Transportation 35,006,802 3,353,826 1,018,377 21,962,964 Economic Environment 6,233, ,331 3,669, ,860 Human Services 12,944, ,748 4, ,350 Culture/Recreation 12,239,889 1,576, , ,575 Court-Related 10,096,192 7,243, Interest on Long-Term Debt 2,671, Total Governmental Activities 252,633,245 75,311,106 8,335,073 22,982,897 Business-type Activities: Solid Waste 7,385,261 14,781,604 61,097 - Water and Wastewater 23,836,529 20,404,496 43,076 1,579,722 Total Business-type Activities 31,221,790 35,186, ,173 1,579,722 Total Primary Government $ 283,855,035 $ 110,497,206 $ 8,439,246 $ 24,562,619 Component Units: Marion County Law Library $ 147,306 $ 171,711 $ - $ - Marion County Housing Finance Authority 7,149 15, Total Component Units $ 154,455 $ 186,814 $ - $ - General Revenues: Property Tax Sales Tax Public Service Tax Gas Tax Unrestricted State Revenue Sharing Tourist Development Tax Other Taxes Unrestricted Intergovernmental Revenues Investment Income Miscellaneous Gain on Sale of Capital Assets Total General Revenues and Transfers Change in Net Position Beginning Net Position Ending Net Position The notes to the financial statements are an integral part of the financial statements. 20

22 Net (Expense) Revenue and Changes in Net Position Governmental Activities Business-type Activities Total Component Units $ (28,679,419) $ - $ (28,679,419) (79,488,957) - (79,488,957) 520, ,213 (8,671,635) - (8,671,635) (1,674,396) - (1,674,396) (12,218,811) - (12,218,811) (10,267,074) - (10,267,074) (2,852,964) - (2,852,964) (2,671,126) - (2,671,126) (146,004,169) - (146,004,169) - 7,457,440 7,457,440 - (1,809,235) (1,809,235) - 5,648,205 5,648,205 (146,004,169) 5,648,205 (140,355,964) $ 24,405 7,954 32,359 92,296,160-92,296,160-18,437,597-18,437,597-2,835,715-2,835,715-22,780,874-22,780,874-7,548,554-7,548,554-1,047,211-1,047, , , , , , ,506 1,021,419 1,123 2,806,794 1,688,416 4,495,210 1,349-67,344 67, ,959,683 2,078, ,037,949 2,472 3,955,514 7,726,471 11,681,985 34,831 1,454,039, ,870,868 1,559,910, ,514 $ 1,457,995,231 $ 113,597,339 $ 1,571,592,570 $ 884,345 21

23 BALANCE SHEET - GOVERNMENTAL FUNDS September 30, 2014 General Fund - County Wide County Transportation Maintenance MSTU for Law Enforcement Fire, Rescue & EMS ASSETS Cash and Cash Equivalents $ 6,499,744 $ 2,164,037 $ 2,718,386 $ 4,173,422 Investments 25,348,291 2,479,162 1,343,023 12,761,839 Accounts Receivable 2,560, Accrued Interest Receivable 56,879 5,568 3,000 28,638 Special Assessments Receivable - 79, Due from Other Funds 52,787 6, ,844 1,934 Due from Other Governments 3,575,510 3,866,819 73,500 31,168 Inventories 972, Prepaid Items 164, ,020 Total Assets $ 39,231,439 $ 8,601,935 $ 4,984,753 $ 16,999,261 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts Payable $ 2,275,441 $ 331,655 $ - $ 97,801 Contracts Payable 10,708 74, Accrued Liabilities 1,386, , ,215 Due to Other Funds 1,209, Due to Other Governments 1,626,689 94,642-2,657 Due to Individuals 1,205, Deposits 29,120 65, Unearned Revenues 3,030, ,261 Advanced Grants 160,236 1,817,588-5,415 Total Liabilities 10,934,947 2,513, ,349 Deferred Inflows of Resources: Deferred Assessments - 79, Unavailable Revenues 1,006, Total Deferred Inflows of Resources 1,006,744 79, Fund Balances: Nonspendable: Inventories 972, Prepaid Items 164, ,020 Restricted for: Court Innovations Records Modernization Tech Debt Service Fire & Rescue ,275,319 Infrastructure Law Enforcement - - 4,965,732 - Parks & Recreation Public Safety Resource Conservation Road Construction Social Services Tourism Transportation Maintenance - 6,008, Committed to: Airport Parks and Recreation Assigned to: Subsequent Year's Budget 12,964, Debt Service Fire & Rescue ,573 Infrastructure Law Enforcement ,021 - Parks & Recreation Road Construction Unassigned 13,187, Total Fund Balances 27,289,748 6,008,834 4,984,753 16,356,912 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 39,231,439 $ 8,601,935 $ 4,984,753 $ 16,999,261 The notes to the financial statements are an integral part of the financial statements. 22

24 Public Improvement Transportation Capital Projects Nonmajor Governmental Funds Total Governmental Funds $ 550,891 $ 54,379,462 $ 70,485,942 20,275,801 14,525,986 76,734, ,079,681 3,641,427 45,509 32, ,236-10,959,233 11,039, ,212 1,196,989-1,478,864 9,025, ,340 1,878,743-32, ,290 $ 20,872,674 $ 83,683,668 $ 174,373,730 $ 494,649 $ 1,774,850 $ 4,974, , , , ,683 2,129, ,210,251-95,379 1,819, ,205, , , ,062, ,983,239 1,120,055 2,524,575 17,735,120-10,959,233 11,039,140-1,062,809 2,069,553-12,022,042 13,108, ,340 1,878,743-32, ,290-38,728 38, , ,900-7,146,861 7,146,861-3,875,357 20,150, , ,628-3,498,004 8,463,736-2,939,484 2,939,484-3,256,782 3,256,782-12,131,020 12,131,020 19,627,092 21,371,947 40,999,039-1,446,366 1,446, , ,338-4,055,962 10,064, , ,353-2,973,705 2,973, ,964,911-1,237,935 1,237, ,573-1,463,913 1,463, ,021-55,051 55, , , ,187,592 19,752,619 69,137, ,529,917 $ 20,872,674 $ 83,683,668 $ 174,373,730 23

25 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION as of September 30, 2014 Total fund balances of governmental funds $ 143,529,917 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 funds. The cost of the assets is $2,037,142,362 and the accumulated depreciation and amortization is $643,902,138. The difference does not include the net capital assets of the internal service funds which are included below. 1,393,240,224 The internal service fund is used by management to charge the costs of risk management services to individual funds. The assets and liabilities of the internal service fund is included in governmental activities in the Statement of Net Position. 9,690,394 At the governmental fund level, special assessments receivables are not available and reported as a deferred inflow of resources. All receivables are included as revenue in the Statement of Activities and therefore, not an unearned revenue on the Statement of Net Position. 11,039,140 At the governmental fund level, some receivables are not available and reported as a deferred inflow of resources. All receivables are included as revenue when earned in the Statement of Activities and therefore, not an unearned revenue on the Statement of Net Position. 2,069,553 Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities--both current and long-term--are reported in the Statement of Net Position. The difference does not include the internal service funds which are included above. Long-term liabilities and the associated deferred inflow of resources at year-end consist of: Bonds payable $ 66,858,352 Less: Unamortized bond discounts (to be amortized over life of debt) (181,826) Accrued interest payable 871,079 Deferred charge on refunding 56,255 Compensated absences 14,673,485 Other post employment benefits 17,543,799 AHCA due to the State 583,579 (101,573,997) Total net position of governmental activities $ 1,457,995,231 The notes to the financial statements are an integral part of the financial statements. 24

26 25

27 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended September 30, 2014 General Fund - County Wide County Transportation Maintenance MSTU for Law Enforcement REVENUES Taxes $ 45,579,768 $ 12,837,845 $ 31,073,694 Special Assessments - 113,781 - Impact Fees Permits and Fees 198,751 56,748 - Intergovernmental Revenues 29,151,594 3,031, ,808 Charges for Services 25,075, , ,514 Judgments and Fines 2,015, Court-Related Revenues 5,554, Investment Income 232,616 15,289 19,021 Miscellaneous Revenues 4,798, , ,936 Total Revenues 112,606,531 16,359,709 32,363,973 EXPENDITURES Current: General Government 31,708, Public Safety 92,005,694-1,257,162 Physical Environment 1,035, Transportation 966,756 17,632,852 - Economic Environment 4,462, Human Services 11,171, Culture/Recreation 9,236, Court-Related 8,358, Debt Service: Principal Retirement Interest and Fiscal Charges Capital Outlay Total Expenditures 158,945,494 17,632,852 1,257,162 Excess (Deficiency) of Revenues Over (Under) Expenditures (46,338,963) (1,273,143) 31,106,811 OTHER FINANCING SOURCES (USES) Transfers In 42,416,639 4, ,354 Transfers (Out) (1,790,105) - (31,920,432) Issuance of Notes/Bonds Payable - 176,632 - Issuance of Capital Lease 1,169, Total Other Financing Sources and (Uses) 41,795, ,532 (31,071,078) Net Change in Fund Balances (4,543,155) (1,091,611) 35,733 Fund Balances - Beginning 31,832,903 7,100,445 4,949,020 Fund Balances - Ending $ 27,289,748 $ 6,008,834 $ 4,984,753 The notes to the financial statements are an integral part of the financial statements. 26

28 Fire, Rescue & EMS Public Improvement Transportation Capital Projects Nonmajor Governmental Funds Total Governmental Funds $ 7,585,116 $ - $ 25,049,070 $ 122,125,493 24,776,902-11,968,135 36,858, ,365 37,365 58,659-2,706,797 3,020, ,569-2,652,063 35,654,854 60,575-4,389,116 30,251,348 5,846-1,199,992 3,221, ,542 6,178,868 79, , , ,288 56, ,056 5,389,248 32,832, ,527 49,071, ,359, ,047,228 32,755,893 33,580,701-6,684, ,528, ,504,659 4,540, ,260,981 29,860, ,772,517 6,235, ,673,563 12,844, ,260,423 10,496, ,693,733 10,051, ,418,396 8,418, ,807,225 2,807,225-7,978,061 2,992,419 10,970,480 33,580,701 7,978,061 43,115, ,510,161 (748,058) (7,852,534) 5,955,513 (19,150,374) 506,899-2,275,688 46,053,480 (944,800) - (11,398,143) (46,053,480) - - 2,929,287 3,105, ,169,274 (437,901) - (6,193,168) 4,275,193 (1,185,959) (7,852,534) (237,655) (14,875,181) 17,542,871 27,605,153 69,374, ,405,098 $ 16,356,912 $ 19,752,619 $ 69,137,051 $ 143,529,917 27

29 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended September 30, 2014 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds $ (14,875,181) Governmental funds report capital purchases as expenditures. However, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital additions ($48,022,999) exceeds depreciation ($35,196,922) in the current period. Total capital additions consist of capital expenditures of $35,973,748 and non-cash contributions of $12,049, ,826,077 Special assessment revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 791,783 The issuance of bonds and similar long-term debt provides current financial resources to governmental funds and thus contribute to the change in fund balance. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds, but reduces the liability in the statement of net position. Also, governmental funds report the effect of premiums and discounts when debt is first issued, whereas these amounts are recorded as part of the debt on the statements of net position and amortized in the statement of activities. The items that make up these differences in the treatment of long-term debt and related related items are: Debt issued or incurred: Issuance of bonds $ (3,105,919) Issuance of capital leases (1,169,274) Principal repayments 8,418,396 Amortization of bond discount (19,600) Allocation to interest expense on deferred charge on refunding 64,306 $ 4,187,909 Continued 28

30 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES - Continued For the Year Ended September 30, 2014 Under the modified accrual basis of accounting used in governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the statement of activities, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues. These adjustments are as follows: Changes in compensated absences 478,241 Changes in other post employment benefits (1,536,931) Changes in AHCA long-term due to the State 194,527 Changes in accrued interest on long-term debt 91,393 (772,770) In the statement of activities, only the loss on the sale/disposal of capital assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balance by the net book value of the capital assets sold/disposed. (159,634) Under the modified accrual basis of accounting, revenues are recognized when both the measureable and available criteria have been met. Ambulance and housing assistance loan revenues earned in the current year were not recognized since the availability criteria was not met. Under full accrual accounting, all revenues would be recognized. 116,921 The internal service fund is used by management to charge the costs of risk management services to other funds. The net income of the internal service fund is reported with governmental activities. 1,840,409 Change in net position of governmental activities $ 3,955,514 The notes to the financial statements are an integral part of the financial statements. 29

31 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND - COUNTY WIDE For the Year Ended September 30, 2014 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Over (Under) REVENUES Taxes $ 45,071,614 $ 45,071,614 $ 45,579,768 $ 508,154 Permits and Fees , ,751 Intergovernmental Revenues 30,106,165 32,490,857 29,151,594 (3,339,263) Charges for Services 23,860,200 23,999,600 25,075,269 1,075,669 Judgments and Fines 1,968,524 1,968,524 2,015,712 47,188 Court-Related Revenues 6,093,017 6,155,458 5,554,326 (601,132) Investment Income 347, , ,616 (115,090) Miscellaneous Revenues 13,920,660 6,479,147 4,798,495 (1,680,652) Total Revenues 121,367, ,512, ,606,531 (3,906,375) EXPENDITURES Current: General Government 55,841,171 48,056,841 31,708,665 16,348,176 Public Safety 89,581,091 93,436,313 92,005,694 1,430,619 Physical Environment 1,155,773 1,252,954 1,035, ,473 Transportation 1,035,682 1,039, ,756 73,151 Economic Environment 6,815,614 9,048,398 4,462,969 4,585,429 Human Services 15,843,212 15,873,300 11,171,309 4,701,991 Culture/Recreation 12,132,334 12,238,380 9,236,541 3,001,839 Court-Related 8,664,725 8,759,551 8,358, ,472 Total Expenditures 191,069, ,705, ,945,494 30,760,150 Excess (Deficiency) of Revenues Over (Under) Expenditures (69,701,716) (73,192,738) (46,338,963) 26,853,775 OTHER FINANCING SOURCES (USES) Transfers In 84,584,927 88,347,090 42,416,639 (45,930,451) Transfers (Out) (45,676,138) (46,750,286) (1,790,105) 44,960,181 Issuance of Capital Lease - - 1,169,274 1,169,274 Total Other Financing Sources and (Uses) 38,908,789 41,596,804 41,795, ,004 Net Change in Fund Balance (30,792,927) (31,595,934) (4,543,155) 27,052,779 Fund Balance - Beginning 30,792,927 31,595,934 31,832, ,969 Fund Balance - Ending $ - $ - $ 27,289,748 $ 27,289,748 The notes to the financial statements are an integral part of the financial statements. 30

32 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL COUNTY TRANSPORTATION MAINTENANCE For the Year Ended September 30, 2014 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Over (Under) REVENUES Taxes $ 12,189,152 $ 12,189,152 $ 12,837,845 $ 648,693 Special Assessments - 46, ,781 67,501 Permits and Fees 38,000 38,000 56,748 18,748 Intergovernmental Revenues 4,957,318 5,486,143 3,031,820 (2,454,323) Charges for Services 163, , ,874 21,854 Investment Income 16,150 16,150 15,289 (861) Miscellaneous Revenues 111, , ,352 8,202 Total Revenues 17,474,789 18,049,895 16,359,709 (1,690,186) EXPENDITURES Current: Transportation 36,730,280 37,353,641 17,632,852 19,720,789 Total Expenditures 36,730,280 37,353,641 17,632,852 19,720,789 Excess (Deficiency) of Revenues Over (Under) Expenditures (19,255,491) (19,303,746) (1,273,143) 18,030,603 OTHER FINANCING SOURCES (USES) Transfers In - 4,900 4,900 - Issuance of Notes/Bonds Payable 12,410,000 12,410, ,632 (12,233,368) Total Other Financing Sources and (Uses) 12,410,000 12,414, ,532 (12,233,368) Net Change in Fund Balance (6,845,491) (6,888,846) (1,091,611) 5,797,235 Fund Balance - Beginning 6,845,491 6,888,846 7,100, ,599 Fund Balance - Ending $ - $ - $ 6,008,834 $ 6,008,834 The notes to the financial statements are an integral part of the financial statements. 31

33 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL MSTU FOR LAW ENFORCEMENT For the Year Ended September 30, 2014 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Over (Under) REVENUES Taxes $ 30,813,091 $ 30,813,091 $ 31,073,694 $ 260,603 Intergovernmental Revenues - 667, ,808 (57,688) Charges for Services 526, , ,514 15,442 Investment Income 35,910 35,910 19,021 (16,889) Miscellaneous Revenues 38, , ,936 (36,546) Total Revenues 31,413,643 32,199,051 32,363, ,922 EXPENDITURES Current: Public Safety 5,539,712 5,541,898 1,257,162 4,284,736 Total Expenditures 5,539,712 5,541,898 1,257,162 4,284,736 Excess (Deficiency) of Revenues Over (Under) Expenditures 25,873,931 26,657,153 31,106,811 4,449,658 OTHER FINANCING SOURCES (USES) Transfers In - 1,034, ,354 (185,084) Transfers (Out) (30,580,607) (32,640,611) (31,920,432) 720,179 Total Other Financing Sources and (Uses) (30,580,607) (31,606,173) (31,071,078) 535,095 Net Change in Fund Balance (4,706,676) (4,949,020) 35,733 4,984,753 Fund Balance - Beginning 4,706,676 4,949,020 4,949,020 - Fund Balance - Ending $ - $ - $ 4,984,753 $ 4,984,753 The notes to the financial statements are an integral part of the financial statements. 32

34 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FIRE, RESCUE AND EMS For the Year Ended September 30, 2014 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Over (Under) REVENUES Taxes $ 7,540,183 $ 7,540,183 $ 7,585,116 $ 44,933 Special Assessments 24,231,090 24,231,090 24,776, ,812 Permits and Fees 42,560 42,560 58,659 16,099 Intergovernmental Revenues 97,819 97, , ,750 Charges for Services 72,105 72,105 60,575 (11,530) Judgments and Fines 38,950 38,950 5,846 (33,104) Investment Income 85,974 85,974 79,573 (6,401) Miscellaneous Revenues 4,750 4,750 56,403 51,653 Total Revenues 32,113,431 32,113,431 32,832, ,212 EXPENDITURES Current: Public Safety 49,108,828 49,218,154 33,580,701 15,637,453 Total Expenditures 49,108,828 49,218,154 33,580,701 15,637,453 Excess (Deficiency) of Revenues Over (Under) Expenditures (16,995,397) (17,104,723) (748,058) 16,356,665 OTHER FINANCING SOURCES (USES) Transfers In 506, , ,899 - Transfers (Out) (944,800) (944,800) (944,800) - Total Other Financing Sources and (Uses) (437,901) (437,901) (437,901) - Net Change in Fund Balance (17,433,298) (17,542,624) (1,185,959) 16,356,665 Fund Balance - Beginning 17,433,298 17,542,624 17,542, Fund Balance - Ending $ - $ - $ 16,356,912 $ 16,356,912 The notes to the financial statements are an integral part of the financial statements. 33

35 STATEMENT OF NET POSITION PROPRIETARY FUNDS September 30, 2014 Solid Waste Marion County Utility Totals Governmental Activities - Internal Service Fund ASSETS Current Assets: Cash and Cash Equivalents $ 6,092,989 $ 3,465,652 $ 9,558,641 $ 7,136,918 Restricted Assets Available for Current Liabilities 1,480,281 5,190,190 6,670,471 - Investments 39,283,066 18,302,403 57,585,469 14,193,037 Accounts Receivable, Net of Allowance for Uncollectible Accounts 114,255 1,124,335 1,238, ,740 Accrued Interest Receivable 88,184 41, ,294 31,874 Due from Other Funds ,262 Due from Other Governments 7, , ,067 - Inventories - 929, ,676 - Total Current Assets 47,066,678 29,640,530 76,707,208 21,561,831 Noncurrent Assets: Restricted Assets: Sinking Fund - 1,451,550 1,451,550 - Renewal & Replacement - 1,118,459 1,118,459 - Landfill Escrow 6,687,767-6,687,767 - Debt Service Reserve - 4,787,423 4,787,423 - Less: Portion Classified as Current (1,480,281) (5,190,190) (6,670,471) - Total Restricted Assets 5,207,486 2,167,242 7,374,728 - Prepaid Landfill Fee 20,000,000-20,000,000 - Capital Assets: Land 1,014,412 6,723,957 7,738,369 - Buildings 3,864,412 4,900,072 8,764,484 - Improvements Other than Buildings 32,147, ,891, ,038,203 - Machinery, Equipment and Vehicles 6,656,574 5,737,987 12,394,561 28,191 Construction in Progress 5,030,541 1,581,978 6,612,519 - Less: Accumulated Depreciation (33,994,368) (74,617,806) (108,612,174) (6,142) Total Capital Assets (Net) 14,718, ,217, ,935,962 22,049 Total Noncurrent Assets 39,926, ,384, ,310,690 22,049 Total Assets 86,992, ,025, ,017,898 21,583,880 DEFERRED OUTFLOWS OF RESOURCES Deferred Amount on Refunding - 3,614,200 3,614,200 - Total Deferred Outflows of Resources $ - $ 3,614,200 $ 3,614,200 $ - Continued Business-type Activities - Enterprise Funds 34

36 STATEMENT OF NET POSITION - Continued PROPRIETARY FUNDS September 30, 2014 Business-type Activities - Enterprise Funds Solid Waste Marion County Utility Totals Governmental Activities - Internal Service Fund LIABILITIES Current Liabilities: Accounts Payable $ 598,194 $ 770,492 $ 1,368,686 $ - Contracts Payable 196, , ,387 - Accrued Liabilities 55,417 93, ,880 7,717 Compensated Absences Payable 43,164 53,574 96,738 4,594 Estimated Claims Payable ,990,149 Due to Other Funds 4,000-4,000 - Due to Other Governments 2,682 13,861 16,543 - Deposits 14,295 1,493,980 1,508,275 - Unearned Revenue - 14,003 14,003 1,886,260 Current Liabilities Payable from Restricted Assets: Notes Payable - 1,469,839 1,469,839 - Revenue Bonds Payable - 2,835,000 2,835,000 - Accrued Interest Payable - 885, ,351 - Landfill Closure Costs Payable 715, ,380 - Remediation Costs Payable 764, ,901 - Total Current Liabilities Payable from Restricted Assets 1,480,281 5,190,190 6,670,471 - Total Current Liabilities 2,394,517 7,798,466 10,192,983 3,888,720 Noncurrent Liabilities: Compensated Absences Payable 172, , ,951 18,377 Other Post Employment Benefits 314, , ,872 25,791 Estimated Claims Payable ,960,598 Unearned Revenue, Connection Fees - 7,274,990 7,274,990 - Notes Payable - 26,575,144 26,575,144 - Revenue Bonds Payable - 66,793,402 66,793,402 - Landfill Closure Costs Payable 23,084,792-23,084,792 - Remediation Costs Payable 3,019,625-3,019,625 - Total Noncurrent Liabilities 26,591, ,249, ,841,776 8,004,766 Total Liabilities 28,986, ,048, ,034,759 11,893,486 NET POSITION Net Investment in Capital Assets 14,070,219 34,421,932 48,492,151 22,049 Restricted: Debt Service - 5,353,622 5,353,622 - Capital Projects - 1,118,459 1,118,459 - Unrestricted 43,936,325 14,696,782 58,633,107 9,668,345 Total Net Position $ 58,006,544 $ 55,590,795 $ 113,597,339 $ 9,690,394 The notes to the financial statements are an integral part of the financial statements. 35

37 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended September 30, 2014 Business-type Activities - Enterprise Funds Marion County Governmental Activities - Internal Service Solid Waste Utility Total Fund Operating Revenues: Charges for Services $ 14,781,604 $ 20,404,496 $ 35,186,100 $ 28,422,630 Miscellaneous Revenues 105,021 1,583,395 1,688, ,392 Total Operating Revenues 14,886,625 21,987,891 36,874,516 28,616,022 Operating Expenses: Personal Services 2,938,877 4,580,255 7,519, ,200 Contracted Services 1,916,458 1,381,468 3,297,926 - Supplies and Materials 727, ,378 1,653,247 - Repairs and Maintenance 1,071, ,285 2,039,710 - Other Services and Charges 715,983 2,178,829 2,894,812 - Depreciation 1,547,380 9,979,222 11,526,602 5,193 Amortization - (108,730) (108,730) - Provision for Closure and Long Term Care (1,467,675) - (1,467,675) - Provision for Pollution Remediation (243,125) - (243,125) - Premiums/Claims Expense 178, , ,403 26,487,845 Total Operating Expenses 7,385,261 20,352,041 27,737,302 26,853,238 Operating Income 7,501,364 1,635,850 9,137,214 1,762,784 Nonoperating Revenues (Expenses): Grants 61,097 43, ,173 - Investment Income 214, , ,506 77,625 Interest and Fiscal Charges Expense - (3,484,074) (3,484,074) - Water Connection Fees - 415, ,342 - Waste Water Connection Fees - 881, ,958 - Gain (Loss) on Disposal of Capital Assets 67,344 (414) 66,930 - Total Nonoperating Revenues (Expenses) 342,860 (2,036,025) (1,693,165) 77,625 Income (Loss) Before Transfers and Contributions 7,844,224 (400,175) 7,444,049 1,840,409 Capital Grants - 282, ,422 - Change in Net Position 7,844,224 (117,753) 7,726,471 1,840,409 Total Net Position - Beginning 50,162,320 55,708, ,870,868 7,849,985 Total Net Position - Ending $ 58,006,544 $ 55,590,795 $ 113,597,339 $ 9,690,394 The notes to the financial statements are an integral part of the financial statements. 36

38 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended September 30, 2014 Marion County Governmental Activities - Internal Service Solid Waste Utility Total Fund Cash Flows from Operating Activities Receipts from Customers and Users $ 14,905,255 $ 22,106,396 $ 37,011,651 $ 28,745,825 Payments to Suppliers (4,741,604) (7,135,077) (11,876,681) (27,465,621) Payments to Employees (2,907,167) (4,543,427) (7,450,594) (353,672) Net Cash Provided by Operating Activities 7,256,484 10,427,892 17,684, ,532 Cash Flows from Noncapital Financing Activities Subsidy from Federal/State Grants 61,097 43, ,173 - Net Cash Provided by Noncapital Financing Activities 61,097 43, ,173 - Cash Flows from Capital and Related Financing Activities Grants Received for Capital Purpose - 282, Water Connection Fees - 415, ,422 - Waste Water Connection Fees - 881, ,958 - Acquisition/Construction of Capital Assets (2,807,889) (14,122,474) (16,930,363) (26,693) Principal Paid on Capital Debt - (4,564,268) (4,564,268) - Interest Paid on Capital Debt - (3,300,671) (3,300,671) - Proceeds from Notes Payable - 4,970,799 4,970,799 - Proceeds from Disposal of Capital Assets 67,344-67,344 - Net Cash (Used) by Capital and Related Financing Activities (2,740,545) (15,436,892) (18,592,779) (26,693) Cash Flows from Investing Activities Sale (Purchase) of Investments (219,091) 2,826,049 2,606,958 (79,158) Interest Received 222, , ,724 80,510 Net Cash Provided by Investing Activities 3,583 2,945,099 2,948,682 1,352 Net Increase (Decrease) in Cash and Cash Equivalents 4,580,619 (2,020,825) 2,559, ,191 Cash and Cash Equivalents at Beginning of Year 8,200,137 12,843,909 21,044,046 6,235,727 Cash and Cash Equivalents at End of Year $ 12,780,756 $ 10,823,084 $ 23,603,840 $ 7,136,918 Cash and Cash Equivalents Classified As: Current Assets $ 6,092,989 $ 3,465,652 $ 9,558,641 $ 7,136,918 Current Restricted Assets 1,480,281 5,190,190 6,670,471 - Noncurrent Restricted Assets 5,207,486 2,167,242 7,374,728 - Total Cash and Cash Equivalents $ 12,780,756 $ 10,823,084 $ 23,603,840 $ 7,136,918 Continued Business-type Activities - Enterprise Funds 37

39 STATEMENT OF CASH FLOWS - Continued PROPRIETARY FUNDS For the Year Ended September 30, 2014 Business-type Activities - Enterprise Funds Governmental Activities - Solid Waste Marion County Utility Total Internal Service Fund Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating Income $ 7,501,364 $ 1,635,850 $ 9,137,214 $ 1,762,784 Depreciation 1,547,380 9,979,222 11,526,602 5,193 Amortization - (108,730) (108,730) - Provision for Closure and Postclosure (1,467,675) - (1,467,675) - Provision for Pollution Remediation (243,125) - (243,125) - Change in Assets and Liabilities: (Increase) Decrease in Accounts Receivable 18, , ,292 (45,371) (Increase) Decrease in Inventories - (182,654) (182,654) 1,918 Increase (Decrease) in Accounts Payable (133,992) (1,039,740) (1,173,732) - Increase (Decrease) in Accrued Liabilities 7,107 15,793 22,900 1,142 Increase (Decrease) in Due to Other Governments 2,192 (11,389) (9,197) - Increase (Decrease) in Customer Deposits (150) 88 (62) - Increase (Decrease) in Unearned Revenue - 4,905 4, ,256 Increase (Decrease) in Compensated Absences (8,791) 8,710 (81) 4,150 Increase (Decrease) in Post Employment Benefits 33,394 12,325 45,719 2,378 Increase (Decrease) in Claims Payable (978,918) Total Adjustments (244,880) 8,792,042 8,547,162 (836,252) Net Cash Provided (Used) by Operating Activities $ 7,256,484 $ 10,427,892 $ 17,684,376 $ 926,532 The County had no noncash investing, capital, and financing activities during fiscal year ended September 30, The notes to the financial statements are an integral part of the financial statements. 38

40 STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUNDS September 30, 2014 ASSETS Cash and Cash Equivalents $ 13,539,300 Accounts Receivable 153,517 Due from Other Governments 419,560 Due from Individuals 18,334 Total Assets $ 14,130,711 LIABILITIES Accounts Payable $ 3,943 Due to Other Governments 2,789,594 Due to Individuals 7,638,722 Deposits 3,698,452 Total Liabilities $ 14,130,711 The notes to the financial statements are an integral part of the financial statements. 39

41 STATEMENT OF NET POSITION COMPONENT UNITS September 30, 2014 Marion County Law Library Marion County Housing Finance Authority Total Component Units ASSETS Cash and Cash Equivalents $ 144,888 $ 443,759 $ 588,647 Accounts Receivable 1, , ,926 Due from Other Governments 26,435-26,435 Prepaid Items 1,016-1,016 Capital Assets, net 81,661-81,661 Total Assets $ 255,073 $ 637,612 $ 892,685 LIABILITIES Accounts Payable 7,651-7,651 Unearned Revenue Total Liabilities 8,340-8,340 NET POSITION Investment in Capital Assets 81,661-81,661 Unrestricted 165, , ,684 Total Net Position $ 246,733 $ 637,612 $ 884,345 The notes to the financial statements are an integral part of the financial statements. 40

42 STATEMENT OF ACTIVITIES - COMPONENT UNITS For the Year Ended September 30, 2014 Marion County Law Library Marion County Housing Finance Authority Total Component Units EXPENSES Court Related $ 147,306 $ - $ 147,306 Economic Environment - 7,149 7,149 Total Operating Expenses 147,306 7, ,455 PROGRAM REVENUES Charges for Services 171,711 15, ,814 Net Program (Revenue) Expenses (24,405) (7,954) (32,359) GENERAL REVENUES Investment Income 66 1,057 1,123 Miscellaneous 1,349-1,349 Total General Revenues 1,415 1,057 2,472 Increase (Decrease) in Net Position 25,820 9,011 34,831 Net Position - Beginning 220, , ,514 Net Position - Ending $ 246,733 $ 637,612 $ 884,345 The notes to the financial statements are an integral part of the financial statements. 41

43 NOTES TO FINANCIAL STATEMENTS September 30, 2014 INDEX TO NOTES PAGE NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity Government-wide and Fund Financial Statements Measurement Focus, Basis of Accounting, and Financial Statement Presentation Budgetary Requirements Property Taxes Interfund Transactions Interfund Payables and Receivables Cash and Cash Equivalents Equity in Pooled Cash Investments Inventories & Prepaid Items Restricted Assets Utility Receivables Special Assessment Receivables Ambulance Receivables SHIP Loan Receivables Capital Assets Compensated Absences Landfill Closure Costs Long-Term Liabilities Unearned Revenues Self-Insurance Claims Grants Revenues Deferred Inflows of Resources Fund Balance Reporting and Governmental Fund-Type Definitions Net Position NOTE 2 DEPOSITS AND INVESTMENTS Cash and Cash Equivalents Investment Portfolio Interest Rate Risk Credit Risk Custodial Credit Risk Concentration of Credit Risk NOTE 3 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS NOTE 4- CAPITAL ASSETS Changes in Capital Assets Summary of Capital Assets Construction Commitments Capital Assets under Lease Purchase Commitments NOTE 5 LONG-TERM LIABILITIES Schedule of Changes in Long-Term Liabilities Bonds Payable Notes Payable Debt Service Requirements Pledged Revenues Defeased Debt Compensated Absences Landfill Closure Costs Bond Covenant Requirements NOTE 6 RISK MANAGEMENT PROGRAM NOTE 7 RETIREMENT SYSTEM NOTE 8 OTHER POSTEMPLOYMENT BENEFITS NOTE 9 RESTRICTED NET POSITION FOR OTHER PURPOSES NOTE 10 COMMITMENTS AND CONTINGENCIES NOTE 11 NEW PRONOUNCEMENTS

44 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Marion County, Florida (the County ) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Significant County accounting policies are described below. A. Reporting Entity The County is a political subdivision of the State of Florida established by the Constitution of the State of Florida, Article VIII, Section 1(e). It is governed by an elected Board of County Commissioners (the "Board") which is governed by state statutes and regulations. In addition to the Board, there are five elected Constitutional Officers: Clerk of the Circuit and County Courts and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector. The Constitutional Officers maintain separate accounting records and budgets. The Board funds a portion or, in certain instances, all of the operating budgets of the County s Constitutional Officers. The operations of the Constitutional Officers are reflected in special revenue funds within the County s financial statements. As required by GAAP, the financial reporting entity consists of (1) the primary government (the County), (2) organizations for which the County is financially accountable, and (3) other organizations for which the nature and significance of their relationship with the County are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The County is financially accountable if it appoints a voting majority of the organization's governing body and (a) it is able to impose its will on that organization or (b) there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the County. The County may be financially accountable if an organization is fiscally dependent on the County regardless of whether the organization has (a) a separately elected governing board, (b) a governing board appointed by a higher level of government, or (c) a jointly appointed board. Based on these criteria, County management examined all organizations which were legally separate in order to determine which organizations, if any, should be included in the County's financial statements. Management determined that the Dunnellon Airport Authority, the Rainbow Lakes Estates Municipal Services District, the Marion County Housing Finance Authority, and the Marion County Law Library were the only organizations that should be included in the County's financial statements as component units. 1. Blended Component Units Dunnellon Airport Authority The Dunnellon Airport Authority was established under the laws of Florida, Chapter , and Marion County Code Section A3-1 through A3-14. The Marion County Board of County Commissioners acts as the governing board of the Dunnellon Airport Authority, selects management, establishes budgets, and controls all aspects of general aviation, airport management, operations and development. The Dunnellon Airport is reported as a special revenue fund. Separate financial statements for the Dunnellon Airport Authority have not been developed. Rainbow Lakes Estates Municipal Services District The Rainbow Lakes Estates Municipal Services District was created under the laws of Florida, Chapter and Marion County code Sections A5-1 through A5-7. The Marion County Board of County Commissioners acts as the governing authority of the district, thus having significant influence over their operations and fiscal management. The taxing district is reported as a special revenue fund. Separate financial statements for the Rainbow Lakes Estates Municipal Services District are available at the County Clerk s office. 2. Discretely Presented Component Units Marion County Law Library The Marion County Law Library was created under Florida Statutes Sections , , and , and Marion County Code Section 2-16, which provides for a law library for the courts of Marion County, members of the Bar, and the general public. The Marion County Law Library is composed of a Board of Trustees who are appointed and whose tenure of office is designated by the Senior Circuit Judge (Ex-Officio Chairman of the Board of Trustees) sitting in Marion County. The Board of Trustees is composed of the chief circuit court judge and three attorneys who serve in an advisory capacity. The Board establishes the fees charged and collected on court actions in support of the Marion County Law Library, and the Board is thereby financially accountable. 43

45 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Therefore, the Marion County Law Library is included as a discretely presented component unit of the reporting entity. Separate financial statements for the Marion County Law Library are available at their administrative offices located in the Marion County Judicial Center, 110 N.W. 1 st Avenue, Ocala, Florida Marion County Housing Finance Authority The Marion County Housing Finance Authority was established under Florida Statutes, Section , and Marion County Code Sections 2-96 through The Board does not maintain budgetary control over the operating costs of the Marion County Housing Finance Authority. However, the Board is financially accountable for the activities of the Marion County Housing Finance Authority since the Board both (a) appoints a voting majority of the Authority s governing body, and (b) has the ability to impose its will by removing voting members of the Authority s governing body. Therefore, the Marion County Housing Finance Authority is included as a discretely presented component unit of the reporting entity. The Marion County Housing Finance Authority is accounted for as a single governmental fund. Separate financial statements for the Marion County Housing Finance Authority have not been developed. 3. Related Organizations The County is responsible for appointing members of boards to other organizations, but is not accountable for these organizations. The following related organizations are not included in the reporting entity: i. Marion County Hospital District ii. Marion County Industrial Development Authority B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from businesstype activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses and indirect costs of a given function, or segment, are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect Expenses are those costs that are allocated to functions and activities in accordance with the County s adopted indirect cost allocation plan. The Expenses column includes both direct and indirect expenses. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Fiduciary funds are excluded from the government-wide financial statements. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation 1. Government-wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. 44

46 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 2. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Receivables collected after 60 days 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. Property taxes, franchise fees, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. Major funds are determined at the fund level. Non major governmental funds are combined for financial reporting purposes. The County reports the following major governmental funds: The General Fund is the government s primary operating fund. It is used to account for and report all financial resources not accounted for and reported in another fund. The General Fund includes the Board of County Commissioners, Clerk of the Circuit Court and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector. The County Transportation Maintenance Fund was created pursuant to the provisions of Section , Florida Statutes, to account for transportation related revenues and expenditures. The primary revenue source are gas taxes (one cent voted, 6 th cent local, and 7 th cent county) which are used to fund the activities of the Transportation Department. The MSTU for Law Enforcement Fund is a special revenue fund, created pursuant to section , FS, used to account for the costs of providing the Sheriff s patrol and criminal investigation division services to a geographic area encompassing nearly all of the unincorporated areas of the County. The primary source of funding for this service is ad valorem taxes levied on the areas established by the taxing unit. The Fire, Rescue and EMS Fund is a special revenue fund created by the Board pursuant to Section , Florida Statutes, used to account for the provision of fire protection, rescue services and emergency medical services to those portions of the unincorporated area of the County for which these activities are not otherwise provided. The primary sources of revenue in this fund are generated through the levy and collection of a special per-parcel assessment levied only in the covered area, and a levy of ad valorem tax within the areas of Marion County. 45

47 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The Public Improvement Transportation Capital Projects Fund is used to account for payment of the Public Improvement Revenue Bonds, Series 2009A and Series 2010, issued to provide funds for the construction of road improvements within the County. The County reports the following major enterprise funds: The Solid Waste System Fund accounts for the fiscal activity of all solid waste disposals within the County. The Marion County Utility Fund accounts for the fiscal activity of providing water and wastewater services to residential and commercial customers countywide. Additionally, the County reports the following fund types: Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest. Debt Service funds are also used to report resources if legally mandated, and financial resources that are being accumulated for principal and interest maturing in future years. Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital outlay. Capital Project funds exclude capital-related outflows financed by proprietary fund or for assets held in trust for individuals, private organizations, or other governments. The Internal Service Fund accounts for the activities of the County s risk management program. Activities include amounts collected and the claims paid for the County s workers compensation, property, general liability, and prescription medicine self-insurance, as well as to account for the premiums received and disbursed to a third party insurer for the County employees major medical, disability income, and life insurance. Agency Funds are custodial in nature, and are therefore, excluded from the government-wide financial statements. These Funds are used to account for assets held by the County as an agent for individuals, private organizations and other governments. The resources include fines, forfeitures and filing fees collected for other governmental agencies, child support payments, jury and witness services, posted bonds collected for individuals, prisoner s funds, confiscated monies held as evidence, Sheriff s fees for serving papers, property taxes and fees for licenses. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the County s enterprise funds and of the County s internal service fund are charges to customers for sales and services. Included in Solid Waste charges for service are non ad valorem assessments for landfill fees. Operating expenses for enterprise funds and internal service fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting these definitions are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the County s policy to use restricted resources first, and then unrestricted resources, as they are needed for their intended purposes. 46

48 NOTES TO FINANCIAL STATEMENTS September 30, 2014 D. Budgetary Requirements The following procedures are utilized by the County in establishing and/or amending the budgetary information contained in the financial statements: 1) On or before June 1 of each year, the Clerk of the Circuit Court and Comptroller (the "Clerk"), Sheriff, Supervisor of Elections and Tax Collector each submit a proposed operating budget for the ensuing fiscal year to the Board. 2) The proposed operating budget of the Property Appraiser must be presented to the Board on or before June 1 of each year and is simultaneously submitted by the Property Appraiser to the State of Florida, Department of Revenue, from which the final approval of the budget of the Property Appraiser must emanate. 3) On or before July 15 of each year, or within 15 days after the receipt of certified taxable property values from the Property Appraiser, whichever occurs last, the Clerk, as Clerk to the Board (and Budget Officer), presents to the Board a proposed budget for the fiscal year commencing the following October 1. Pursuant to the provisions of Section , Florida Statutes, the proposed budgets as submitted contain balanced statements of estimated revenues (including unexpended fund balances to be carried forward) and proposed appropriations for each fund required to be presented by law or by sound financial practices, including the general, special revenue, debt service, and capital projects funds. 4) Following a preliminary review of the proposed budgets by the Board, whose members make such changes as are deemed necessary (provided that the proposed budget for each fund remains balanced), the Board causes a notice of proposed property taxes to be mailed to each County property taxpayer. Included in the notice is a statement of the Board's intent to hold a public hearing to consider adoption of the tentative millage rates and budgets, as well as a comparison of the taxpayer's proposed property tax bill with the actual tax bill of the preceding year. 5) Following successful completion of the above referenced public hearings, the Board advertises and subsequently conducts a second public hearing to finally adopt a millage rate and budget for each of the taxing entities under their jurisdiction. These public hearings are ordinarily held prior to October 1 each year. If, however, for some reason the Board is unable to finally adopt a budget prior to October 1, state law permits the readoption by resolution of the budget of the preceding year as an interim measure. 6) Pursuant to the provisions of Section , Florida Statutes, the Board is prohibited from expending or contracting for the expenditure of any amount in excess of the total amount budgeted in any fund. It is, however, legally permissible at the present time for the budgets of individual departments included within a particular fund to be over expended in total without requiring mandatory action by either the Board, the Clerk, as Clerk to the Board (and Budget Officer), or the County Administrator. Transfers of appropriate amounts between funds require approval of the Board. 7) Subsequent to final adoption of the budget by the Board, changes to the budget, as enacted, may be made when revenues not anticipated in the original budget are received that management wishes to appropriate during the current fiscal year, resulting in an increase to the total appropriations of a fund. All other changes to total fund appropriations may only be made through adoption of a budget ordinance or resolution following a public hearing. 8) Adoption and execution of the budgets are governed in accordance with applicable provisions of the Florida Statutes. 9) Formal budgetary integration at the object level is used as a management control device for all governmental funds of the County for which annual budgets are adopted, including the general, special revenue, debt service, and capital projects funds. Pro forma project length budgets are provided to the Board for certain capital projects for informational purposes only. The level at which expenditures may not legally exceed appropriations is the fund level. For instances when the expenditures exceed the appropriation, there would be corresponding increase in unbudgeted revenue. 10) Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. 47

49 NOTES TO FINANCIAL STATEMENTS September 30, ) All appropriations lapse at the end of each fiscal year, although the County expects to honor purchase orders and contracts in process, subject to authority provided in the subsequent year's budget. E. Property Taxes Under Florida law, the assessment of all properties and the collection of all county, municipal and school board property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector. The laws of the State regulating tax assessment are also designed to assure a consistent property valuation method statewide. State Statutes permit counties to levy property taxes at a rate of up to 10 mills for countywide purposes and an additional 10 mills for non-countywide purposes for municipal services with such additional 10 mills limit inclusive of municipal service levies of other local government entities. The tax levy of the County is established by the Board prior to October 1 of each year and the Tax Collector incorporates the millages into the total tax levy, which includes the municipalities, independent districts and the County School Board tax requirements and produces the tax bill. All property is reassessed according to its fair market value on January 1 of each year. Each assessment roll is submitted to the Executive Director of the State Department of Revenue for review to determine if the rolls meet all of the appropriate requirements of State Statutes. All taxes are due and payable on November 1 of each year or as soon thereafter as the assessment roll is certified and delivered to the Tax Collector. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January, and 1% in the month of February. Taxes paid in March are without discount. On or prior to June 1 following the tax year, certificates are sold for all delinquent taxes on real property. Delinquent taxes on real property bear interest at 18% per year or as bid in a public sale of tax certificates. Application for a tax deed on any unredeemed tax certificates may be made by the certificate holder after a period of two years. Unsold certificates are held by the County. Delinquent taxes on personal property bear interest at 18% per year until the tax is satisfied either by seizure and sale of the property or by the seven-year statute of limitations. The County does not accrue its portion of the County-held tax sale certificates or personal property tax warrants because such amounts are not considered to be material. Key dates in the property tax cycle for the fiscal year ended September 30, 2014 are as follows: Assessment Roll certified June 2013 Beginning of fiscal year for which taxes are being levied October 2013 Property taxes levied October 2013 Tax bills issued November 1, 2013 Property taxes due by: For maximum discount November 30, 2013 Delinquent after March 31, 2014 Tax certificates (liens) sold on unpaid property taxes No later than June 1, 2014 F. Interfund Transactions Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it, which are applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund, and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions are reported as transfers. 48

50 NOTES TO FINANCIAL STATEMENTS September 30, 2014 G. Interfund Payables and Receivables Unpaid amounts of interfund transactions at year end are reflected as due from other funds or due to other funds in the related fund financial statements. Noncurrent portions of interfund payables and receivables are reported as advances. In governmental funds, advances are offset equally by nonspendable fund balance unless the advanced funds are restricted or committed. H. Cash and Cash Equivalents For purposes of the statement of cash flows, cash and cash equivalents include equity in pooled cash, cash on hand, demand deposit accounts and highly liquid investments (including restricted assets) with a maturity of three months or less when purchased. I. Equity in Pooled Cash The Board maintains a pooled cash fund which allows the various funds of the Board to pool monies for investment purposes. The Board maintains records to identify the equity of each fund investing in the pool as well as amounts borrowed from the pool. Investment earnings of the pool are recorded as earned and are allocated to the participating funds based on the respective funds average daily balance. The equity in pooled cash consists of cash which can be liquidated without penalty or delay. J. Investments The County s investments include U.S. Treasuries, Federal Instrumentalities, corporate notes, commercial paper, money market funds, municipal bonds and repurchase agreements. Investments with a maturity greater than five years when purchased require the Clerk s approval prior to purchase. All investments are carried at fair value, except Florida PRIME which is reported at amortized cost. K. Inventories and Prepaid Items Inventories are valued at cost, which approximates market value, using the first-in/first-out (FIFO) method. Annual inventory expenditures reflect supplies consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. These payments are recorded as expenditures or expenses when consumed rather than when purchased. L. Restricted Assets The use of certain assets of enterprise funds and debt service funds are restricted by specific provisions of bond resolutions. Assets so designated are identified as restricted assets on the statement of net position and balance sheet since their use is limited. M. Utility Receivables Utility receivables are shown net of allowance for uncollectible accounts. Utility accounts receivable in excess of 120 days comprise the utility accounts receivable allowance for uncollectible accounts. Water and wastewater operating revenues are generally recognized on the basis of cycle billings rendered monthly. The receivables at the end of the fiscal year include an allowance for uncollectable accounts in the amount of $1,500,000. N. Special Assessment Receivables The Board imposes special assessments against property located within specified areas, as set forth in the Assessment Resolution, for the construction of improvements. The assessment of each parcel is based upon either the lineal feet of frontage along the areas to be improved or per lot. The assessments will be collected on the ad valorem tax bill, as authorized by Section of the Florida Statutes. O. Ambulance Receivables Marion County Fire Rescue provides ground-based ambulance services, as well as basic and advanced life support services to the citizens of Marion County. The receivable for ambulance services at the end of the fiscal year includes an allowance for uncollectable accounts in the amount of $1.97 Million. 49

51 NOTES TO FINANCIAL STATEMENTS September 30, 2014 P. State Housing Initiative Partnership (SHIP) Loan Receivables In accordance with the Marion County SHIP Local Housing Assistance Plan, Marion County s Demolition and Reconstruction Loan Program is designed to replace existing uninhabitable or dilapidated structures for homeowners that do not have alternative housing or financial resources to alleviate the situation. Marion County provides interest free loans to qualifying low income applicants, with equal monthly payments of the principle loan balance amortized for 30 years. Q. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Property and equipment with initial, individual costs that equal or exceed $1,000 and estimated useful lives of over one year are recorded as capital assets. Buildings and improvements with initial, individual costs that equal or exceed $25,000 are recorded as capital assets. Capital assets are recorded at historical cost or estimated historical cost if constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Infrastructure assets are reported on a network and sub-system basis. Accordingly, the amounts spent for the construction or acquisition of infrastructure assets are capitalized and reported in the government-wide financial statements regardless of their amount. The historical cost for the initial reporting of these assets was obtained through backtrending (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). As more capital assets are acquired or constructed, they are capitalized and reported at the historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Capital Assets are depreciated over their estimated useful lives unless they are inexhaustible or are intangible assets with indefinite useful lives. The term depreciation (and related forms of the term) includes amortization of intangible assets. Property, plant, equipment and computer software are depreciated/amortized using the straight line method over the following estimated useful lives: Buildings and Improvements Landfill and Water/Sewer Structures Machinery, Equipment and Vehicles Computer Software Infrastructure R. Compensated Absences Years Years 5 Years 5 Years Years The County's reporting of accumulated unused compensated absences has been recorded in accordance with GASB Statement No. 16. A liability is accrued for an employee s rights to receive compensation for future absences when certain conditions are met. In general, it is the County s policy to grant all permanent full-time and part-time employees leave based upon the number of years of employment. Employees are encouraged to use their annual leave in the year that it is earned. All vacation pay is accrued when incurred in the governmentwide, proprietary, and fiduciary fund financial statements. A liability for this amount is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. 50

52 NOTES TO FINANCIAL STATEMENTS September 30, 2014 S. Landfill Closure Costs The Board recognizes municipal solid waste landfill closure and postclosure care costs under the State of Florida's Solid Waste Management Act of 1988, regulations of the Federal Environmental Protection Agency, and the Governmental Accounting Standards Board Statement No. 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs. The Board is required to place a final cover on closed landfills and to provide long-term care for up to thirty years after final cover. These obligations for closure and postclosure are recognized in the enterprise fund for the County's landfill operations over the active life of the landfill, based on landfill capacity used to date. T. Long-Term Liabilities Long-term liabilities which are expected to be financed from governmental funds are accounted for as debt service expenditures in related funds. For proprietary fund types, long-term debt and other obligations are reported as liabilities in the fund financing the obligation. U. Unearned Revenues Unearned revenues in governmental funds represent funds for programs continuing into the next year. Unearned revenues reported on applicable proprietary fund types represent revenues for connection fees and other revenues received in advance. The unearned revenues will be recognized as revenue in the fiscal year in which customer connections are made to the County utility system and other items are earned. V. Self-Insurance Claims Liabilities for reported claims and incurred but not reported claims are estimated based on an actuarial review of historical experience and claims pending against the County. W. Grants Revenues Program and capital grants received by governmental funds are recorded in the applicable governmental fund as receivables and revenues at the time reimbursable costs are incurred and all significant grant restrictions are satisfied. Grant revenues received in advance of meeting all major grant restrictions are reported as unearned or advanced. X. Deferred Inflows of Resources Deferred inflows of resources reported on applicable governmental fund types represent revenues which are measurable but not available in accordance with the modified accrual basis of accounting. The deferred inflows will be recognized as revenue in the fiscal year they are earned or become available. The majority of deferred inflows of resources represent special assessment liens, ambulance revenues, and grant funds. Y. Fund Balance Reporting and Governmental Fund-Type Definitions The County implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This GASB Statement clarifies governmental fund balance classifications and fund-type definitions. The change in the governmental fund type definition resulted in the re-classifying of certain special revenue funds to the general fund for reporting purposes. The Board of County Commissioners is the County s highest level of decision-making authority. Governmental fund balances are classified either as nonspendable or spendable. Spendable fund balances are further classified below nonspendable in a hierarchy based on the extent to which there are external and internal constraints on the spending of these fund balances. These classifications are described as follows: Nonspendable fund balance - include amounts that cannot be spent because they are not in spendable form or legally or contractually required to be maintained intact. Nonspendable governmental fund balances at September 30, 2014 are for inventories and prepaid items. Restricted fund balance include amounts that can be spent only for the specific purposes stipulated by external resources providers either constitutionally or thru enabling legislation. Examples include grants and impact fees. 51

53 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Committed fund balance include amounts that can only be used for the specific purpose determined by a formal action of the government s highest level of decision-making authority. Commitments may be changed or lifted only by the government taking the same formal action of an Ordinance approved by the Board at the County s regular meeting that imposed the constraint originally. Assigned fund balance include amounts intended to be used by the government for specific purposes. Currently, the Board has not officially designated anyone with the authority to assign fund balance to a specific purpose as approved by the fund balance policy. Currently, only the Board has the authority to assign fund balance through action other than ordinance. In governmental funds other than the general fund, assigned fund balance represents the amount that is not restricted or committed. This indicates that the resources in other governmental funds are, at a minimum, intended to be used for the purpose of that fund. Unassigned fund balance is the residual classification of the general fund only and includes all amounts not contained in other classifications. Unassigned amounts are technically available for any purpose. It is the County s goal to maintain an adequate general fund unassigned fund balance to provide liquidity to meet seasonal shortfalls in cash flow, and reduce susceptibility to emergency or unanticipated expenditures and/or revenue shortfalls. It is the goal of the County to maintain an unassigned fund balance in the general fund sufficient to cover 20% of recurring expenditures. If at the end of any fiscal year the actual amount of unassigned fund balance falls below the targeted levels, the Board shall prepare and submit in conjunction with the proposed budget a plan for budget adjustments necessary to restore the minimum requirements. When multiple categories of fund balance are available for expenditures, the County will start with the most restricted category. Unassigned fund balance is used when expenditures are incurred for purposes which amounts in any classification could be used. Z. Net Position The County implemented GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. The statements establish accounting and financial reporting standards, and provide guidance for the statement of net position to include deferred outflows of resources, deferred inflows of resources, and the elements of net position as introduced and defined in GASB Concepts Statement No. 4, Elements of Financial Statements. Additionally, the statements reclassify certain items as deferred outflows, deferred inflows, outflows of resources or inflows of resources. Net position of proprietary funds, governmental activities and business-type activities are made up of three components. Net investment in capital assets represents net capital assets less related long-term liabilities, where unspent debt proceeds increase this amount. Restricted net position represent assets that are legally restricted for specific purposes. They include bond sinking and reserve funds, special revenues restricted by statute, ordinance, and bond proceeds and other sources restricted for capital projects or improvements. The balance of net position is considered unrestricted net position. NOTE 2 DEPOSITS AND INVESTMENTS A. Cash and Cash Equivalents At September 30, 2014, the County s carrying value of cash and cash equivalents totaled $114,766,000, which is presented as $101,226,700 in the statement of net position and $13,539,300 in the statement of fiduciary assets and liabilities, and is made up of the items following in this paragraph. The carrying amount of the County s cash deposit accounts was $50,912,232. Cash with a fiscal agent totaled $225,053. The County s cash deposits are held by a bank that qualifies as a public depository under the Florida Security for Public Deposits Act as required by Chapter 280, Florida Statutes. The County s cash deposits are fully insured by the Public Deposits Trust Fund. Additionally, funds are placed with the State Board of Administration for participation in the Local Government Surplus Funds Trust Fund (Florida Prime Investment Pool), created by Section , Florida Statutes. This investment pool operates under investment guidelines established by Section , Florida Statutes. The County s investment in the Florida Prime Investment Pool, a Securities and Exchange Commission (SEC) Rule 2a7-like external investment pool in the amount of $63,628,715 is reported at amortized cost, there is no material difference from fair value. 52

54 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The Florida Prime Investment Pool had a dollar weighted average days to maturity (WAM) of 39 days as of September 30, Next interest rate reset dates for floating rate securities are used in the calculation of the WAM. B. Investment Portfolio The Marion County Board of County Commissioners (Board) and Marion County Clerk of the Circuit Court and Comptroller (Clerk) formally adopted comprehensive investment policies on October 3, The policies were created pursuant to Section , Florida Statutes and established permitted investments, asset allocation limits, issuer limits, credit ratings requirements, and maturity limits to protect the County s cash and investment assets. The Board maintains a common cash and investment pool for the use of all funds. In addition, cash and investments are separately held by the Board s special revenue, debt service, capital projects, enterprise and trust funds. Section , Florida Statutes, limits the types of investments that a government can invest in unless specifically authorized in an investment policy. The Board adopted a list of permitted investments by ordinance and updated their Investment Policy on September 5, The Ordinance allows for the following investments: The Florida State Board of Administration s Local Government Surplus Funds Trust Fund, United States Government Securities, United States Government Agencies, Federal Instrumentalities, Mortgage-Backed Securities (MBS), Non-Negotiable Interest Bearing Time Certificates of Deposit or Saving Accounts, Repurchase Agreements, Commercial Paper, Bankers Acceptances, Corporate Notes, Asset-Backed Securities (ABS), State and/or Local Government Taxable and/or Tax-Exempt Debt, Registered Investment Companies (Money Market Mutual Funds), Investment Fund (Section 3(c)(1) or 3(c)(7)) of the Investment Company Act of 1940, and Intergovernmental Investment Pools. The Constitutional Officers, electing not to adopt a written investment policy, are limited to investing funds pursuant to Section , Florida Statutes, and subsection (17). Those investments include the Local Government Surplus Funds Trust Fund, any authorized intergovernmental investment pool, SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency, interestbearing time deposits or savings accounts in qualified public depositories, and direct obligations of the U.S. Treasury. The County s investment portfolio consists of $148,512,608 in direct obligations of the United States Treasury Securities, Federal Instrumentalities, Commercial Paper, Corporate Notes, Municipal Bonds, and Money Market Funds which are reported at fair value in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. GASB 31 outlines the two options for accounting and reporting for money market investment pool as either 2a-7 like or fluctuating net asset value ( NAV ). GASB 31 describes a 2a7 like pool as an external investment pool that is not registered with the SEC as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with Rule 2a7 under the investment Company Act of 1940 (the 1940 Act ). Rule 2a-7 is the rule that permits money market funds to use amortized cost to maintain a constant NAV of $1.00 per share, provided that such funds meet certain conditions. The SBA Fund B is required by Florida Law to return all net investment proceeds to the participants. The final net balance of the investment pool and the methodology it will use to allocate the balance are still uncertain. Any proceeds returned from the Fund B will be recorded as interest income in the fiscal year the County receives it. 53

55 NOTES TO FINANCIAL STATEMENTS September 30, 2014 As of September 30, 2014, interest receivable on the County s investment portfolio amounted to $333,404. The County had the following investment types by issuer and effective duration presented in terms of years: Weighted Average Credit Percentage Effective Duration by Security Type Fair Value Duration (Years) Rating of Portfolio Corporate Notes $ 21,436, AA 14.43% Commercial Paper 11,562, A % MUNI Bonds 7,896, AA 5.32% FNMA Notes 11,330, AA+ 7.63% FHLB Notes 6,855, AA+ 4.62% FHLMC Notes 9,918, AA+ 6.68% US Treasury Notes 79,009, AA % Federated MM Fund 504, % Total Fair Value $ 148,512, % Portfolio Weighted Average Duration 1.74 C. Interest Rate Risk The Board s investment policy sets limits for investment maturities to match known cash needs and anticipated cash flow requirements. Investments of current operating funds shall have maturities of no longer than twenty-four (24) months. Investments of bond reserves, construction funds, and other non-operating funds, core funds, shall have a term appropriate to the need for funds and in accordance with debt covenants. The purchase of investments for core funds with maturities longer than five years requires the Clerk s approval prior to purchase. The maturities of the underlying securities of a repurchase agreement will follow the requirements of the Master Repurchase Agreement. The Board utilizes effective duration as a measurement of interest rate risk and as of September 30, 2014, the investment portfolio had an effective duration of 1.74 years. Included in the investment portfolio, the Board has $3,926,013 in Federal Agencies that have an embedded option consisting of the option at the discretion of the issuer to call their obligation or pay a stated increase in the interest rate. The maturity date is March 27, Additionally, the Board has $7,504,266 invested in Federal Agency mortgage-backed pass-through securities with a final maturity date of November 1, 2022 and an effective duration of 3.83 years. D. Credit Risk The Board and Clerk s investment policies permit for investing in the following investments, which are limited to credit quality ratings from nationally recognized rating agencies as described below. Money Market Mutual Funds provided such funds are registered under the Federal Investment Company Act of 1940 and operate in accordance with 17 C.F.R a-7, which stipulates that money market funds must have an average weighted maturity of 90 days or less. In addition, the share value of the money market funds must equal to $1.00. The money market funds shall be rated AAm or AAm-G or better by Standard & Poor s, or the equivalent by another rating agency. State and/or local government taxable and/or tax-exempt debt, general obligation and/or revenue bonds, rated at least Aa by Moody s or AA by Standard & Poor s for long-term debt, or rated at least MIG-2 by Moody s or SP-2 by Standard & Poor s for short-term debt. Bankers Acceptances which are issued by a domestic bank which has at the time of purchase, an unsecured, uninsured and unguaranteed obligation rating of at least Prime-1 by Moody s or A-1 by Standard & Poor s. The bank must be ranked in the top fifty (50) United States banks in terms of total assets by the American Banker s yearly report. 54

56 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Commercial paper of any United States company that is rated, at the time of purchase, Prime-1 by Moody s and A-1 by Standard & Poor s (prime commercial paper). If backed by a letter of credit (LOC), the long-term debt of the LOC provider must be rated at least A by at least two nationally recognized rating agencies. The LOC provider must be ranked in the top fifty (50) United States banks in terms of total assets by the American Banker s yearly report. As of September 30, 2014, the majority of the Board s investment securities in the amount of $148,512,608 were all individually rated AA+ or A-1 by Standard & Poor's Rating Services. The County s $63,628,715 investment deposit in the Florida State Board of Administration s Local Government Surplus Funds Trust Fund (Florida Prime Investment Pool) was rated by Standard & Poor's. The current rating as of September 30, 2014 was AAAm. The County s cash deposit balance, including the deposit with fiscal agent, of $51,137,285 was deposited in a qualified public depository, as required by Chapter 280, Florida Statutes. E. Custodial Credit Risk The Board and Clerk s investment policies, pursuant to Section (18), Florida Statutes, requires securities, with the exception of certificates of deposits, shall be held with a third party custodian; and all securities purchased by, and all collateral obtained by the Board and Clerk should be properly designated as an asset of the County. The securities must be held in an account separate and apart from the assets of the financial institution. A third party custodian is defined as any bank depository chartered by the Federal Government, the State of Florida, or any other state or territory of the United States which has a branch or principal place of business in the State of Florida, or by a national association organized and existing under the laws of the United States which is authorized to accept and execute trusts and which is doing business in the State of Florida. Certificates of deposit will be placed in the provider s safekeeping department for the term of the deposit. As of September 30, 2014, the Board s investment portfolio was held with a third-party custodian as required by the Board s investment policy. F. Concentration of Credit Risk The Board and Clerk s investment policies have established asset allocation and issuer limits on the following investments, which are designed to reduce concentration of Credit risk of the County s investment portfolio. A maximum of 100% of available funds may be invested in the SBA and in the United States Government Securities, 50% of available funds may be invested in United States Government agencies with a 25% limit on individual issuers, 80% of available funds may be invested in Federal Instrumentalities with a 30% limit on individual Issuers, 30% of available funds may be invested in Mortgage Backed Securities with a limit of 20% on individual issuers, 50% of available funds may be invested in non-negotiable interest bearing time certificates of deposit with a 25% limit on individual issuers, 50% of available funds may be invested in repurchase agreements excluding one (1) business day agreements and overnight sweep agreements, 35% of available funds may be directly invested in prime commercial paper with a 10% limit on individual issuers, 35% of available funds may be directly invested in Bankers acceptances with a 20% limits on individual issuers, 25% of available funds may be invested in Corporate Notes with a 5% limit on individual issuers, 30% of available funds may be invested in Asset Backed Securities with a 10% limit on the individual issuers, 20% of available funds may be invested in taxable and tax-exempt debts, 50% of available funds may be invested in mutual funds excluding one (1) business day overnight sweep agreements with a 25% limit on individual issuers and 25% of available funds may be invested in intergovernmental investment pools. 55

57 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 3 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS The composition of interfund balances as of September 30, 2014 is as follows: Due From Other Funds Due to Other Funds Major Funds: General Fund: $ 52,787 $ 1,209,981 Major Special Revenue Funds: Transportation Maintenance Fund 6,212 - MSTU For Law Enforcement 846,844 - Fire, Rescue & EMS 1,934 - Major Enterprise Funds: Solid Waste System - 4,000 Non-major Funds: Special Revenue Funds 253, Debt Service Funds 9,835 - Capital Project Funds 25, Internal Service Fund 17,262 - $ 1,214,251 $ 1,214,251 Interfund receivables and payables resulted primarily from revenues accrued in certain funds that are transferred to other funds and excess fees of County Constitutional Officers due to other funds of the County. The total interfund balances contain $1.59 million of General Fund eliminations between the Constitutional Officers (Clerk, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector). Interfund transfers consist of the following: Transfers In Transfers Out Major Funds: General Fund $ 42,416,639 $ 1,790,105 Major Special Revenue Funds: County Transportation Maintenance 4,900 - MSTU for Law Enforcement 849,354 31,920,432 Fire, Rescue & EMS 506, ,800 Non-major Funds: Special Revenue Funds 2,019,017 11,136,572 Debt Service Funds 256,671 - Capital Project Funds - 261,571 $ 46,053,480 $ 46,053,480 The MSTU for Law Enforcement Special Revenue Fund transferred $31.9 million to the General Fund for the Sheriff. The Fine & Forfeiture Special Revenue Fund transferred $9.77 million to the General Fund for the Sheriff to cover law enforcement costs. The total transfers contain $44 million of General Fund eliminations between the Constitutional Officers (Clerk, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector). 56

58 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 4 CAPITAL ASSETS A. Changes in Capital Assets The following shows the changes in capital assets of governmental activities: Primary Government Beginning Ending Balance Balance Governmental Activities 09/30/2013 Increases Decreases 09/30/2014 Capital Assets, Not Being Depreciated: Land $ 399,934,037 $ 11,651,481 $ - $ 411,585,518 Construction In Progress 1,319,704 1,123,779 (634,456) 1,809,027 Construction In Progress - Infrastructure 17,268,435 14,164,397 (12,309,494) 19,123,338 Total Capital Assets, Not Being Depreciated 418,522,176 26,939,657 (12,943,950) 432,517,883 Capital Assets, Being Depreciated and Amortized: Buildings 227,355, , ,906,646 Improvements Other Than Buildings 51,429, ,132-51,990,715 Equipment 112,554,945 7,570,770 (4,295,494) 115,830,221 Computer Software 1,375,506 1,575,397-2,950,903 Infrastructure 1,182,178,753 23,795,432-1,205,974,185 Total Capital Assets Being Depreciated 1,574,894,179 34,053,985 (4,295,494) 1,604,652,670 Less Accumulated Depreciation For: Buildings (74,524,309) (5,086,139) - (79,610,448) Improvements Other Than Buildings (25,506,224) (2,733,276) - (28,239,500) Equipment (97,631,316) (3,012,653) 4,135,860 (96,508,109) Computer Software (462,726) (275,372) - (738,098) Infrastructure (414,717,450) (24,094,675) - (438,812,125) Total Accumulated Depreciation (612,842,025) (35,202,115) 4,135,860 (643,908,280) Total Capital Assets, Being Depreciated, Net 962,052,154 (1,148,130) (159,634) 960,744,390 Governmental Activities Capital Assets, Net $ 1,380,574,330 $ 25,791,527 $ (13,103,584) $ 1,393,262,273 The following is a summary of governmental activities depreciation and amortization expense by function. As used in this section, the term depreciation (and related forms of the term) includes amortization of intangible assets: Depreciation Governmental Activities: General Government $ 3,735,049 Public Safety 7,819,283 Physical Environment 227,376 Transportation 20,313,216 Economic Environment 93,158 Human Services 323,179 Culture/Recreation 2,537,549 Court Related 148,112 Capital Assets held by the government's Internal Service Fund and charged to individual functions based on usage 5,193 Total Depreciation Expense - Governmental Activities $ 35,202,115 57

59 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The following shows changes in capital assets of business-type activities: Ending Ending Balance Balance Business-type Activities 09/30/2013 Increases Decreases 09/30/2014 Capital Assets, Not Being Depreciated: Land $ 7,571,099 $ 167,270 $ - $ 7,738,369 Construction In Progress 5,330,894 3,780,825 (2,499,200) 6,612,519 Total Capital Assets, Not Being Depreciated 12,901,993 3,948,095 (2,499,200) 14,350,888 Capital Assets, Being Depreciated: Buildings 7,523,447 1,241,037-8,764,484 Improvements Other Than Buildings 203,580,592 13,457, ,038,203 Equipment 10,660,511 1,840,714 (106,664) 12,394,561 Total Capital Assets Being Depreciated 221,764,550 16,539,362 (106,664) 238,197,248 Less Accumulated Depreciation For: Buildings (2,407,898) (251,434) - (2,659,332) Improvements Other Than Buildings (85,542,898) (10,588,339) - (96,131,237) Equipment (9,241,027) (686,829) 106,251 (9,821,605) Total Accumulated Depreciation (97,191,823) (11,526,602) 106,251 (108,612,174) Total Capital Assets, Being Depreciated, Net 124,572,727 5,012,760 (413) 129,585,074 Total Business-Type Activities Capital Assets, Net $ 137,474,720 $ 8,960,855 $ (2,499,613) $ 143,935,962 The following is a summary of business-type activities depreciation expense by function: Depreciation Business-type activities: Solid Waste System $ 1,547,380 Marion County Utility 9,979,222 Total Depreciation Expense - Business-type Activities $ 11,526,602 58

60 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The following shows the changes in capital assets of business-type activities for both enterprise funds: Beginning Ending Balance Balance Business-type Activities 09/30/2013 Increases Decreases 09/30/2014 Solid Waste System Capital Assets, Not Being Depreciated: Land $ 1,014,412 $ - $ - $ 1,014,412 Construction In Progress 3,055,566 2,224,006 (249,031) 5,030,541 Total Capital Assets, Not Being Depreciated 4,069,978 2,224,006 (249,031) 6,044,953 Capital Assets, Being Depreciated: Buildings 3,790,597 73,815-3,864,412 Improvements Other Than Buildings 31,895, ,706-32,147,148 Equipment 5,590,644 1,153,007 (87,077) 6,656,574 Total Capital Assets Being Depreciated 41,276,683 1,478,528 (87,077) 42,668,134 Less Accumulated Depreciation For: Buildings (1,202,045) (126,528) - (1,328,573) Improvements Other Than Buildings (26,776,331) (1,002,856) - (27,779,187) Equipment (4,555,689) (417,996) 87,077 (4,886,608) Total Accumulated Depreciation (32,534,065) (1,547,380) 87,077 (33,994,368) Total Capital Assets, Being Depreciated, Net 8,742,618 (68,852) - 8,673,766 Solid Waste System Capital Assets, Net $ 12,812,596 $ 2,155,154 $ (249,031) $ 14,718,719 Marion County Utility Capital Assets, Not Being Depreciated: Land $ 6,556,687 $ 167,270 $ - $ 6,723,957 Construction In Progress 2,275,328 1,556,819 (2,250,169) 1,581,978 Total Capital Assets, Not Being Depreciated 8,832,015 1,724,089 (2,250,169) 8,305,935 Capital Assets, Being Depreciated: Buildings 3,732,850 1,167,222-4,900,072 Improvements Other Than Buildings 171,685,150 13,205, ,891,055 Equipment 5,069, ,707 (19,587) 5,737,987 Total Capital Assets Being Depreciated 180,487,867 15,060,834 (19,587) 195,529,114 Less Accumulated Depreciation For: Buildings (1,205,853) (124,906) - (1,330,759) Improvements Other Than Buildings (58,766,567) (9,585,483) - (68,352,050) Equipment (4,685,338) (268,833) 19,174 (4,934,997) Total Accumulated Depreciation (64,657,758) (9,979,222) 19,174 (74,617,806) Total Capital Assets, Being Depreciated, Net 115,830,109 5,081,612 (413) 120,911,308 Marion County Utility Capital Assets, Net $ 124,662,124 $ 6,805,701 $ (2,250,582) $ 129,217,243 Total Business-Type Activities Capital Assets, Net $ 137,474,720 $ 8,960,855 $ (2,499,613) $ 143,935,962 59

61 NOTES TO FINANCIAL STATEMENTS September 30, 2014 B. Summary of Capital Assets The following summarizes Capital Assets found on the Statement of Net Position for governmental activities and business-type activities: Primary Government Governmental Business-Type Activities Activities Total Capital Assets, Not Being Depreciated: Land $ 411,585,518 $ 7,738,369 $ 419,323,887 Construction in Progress 1,809,027 6,612,519 8,421,546 Construction in Progress - Infrastructure 19,123,338-19,123,338 Total Capital Assets, Not Being Depreciated 432,517,883 14,350, ,868,771 Capital Assets, Being Depreciated and Amortized, Net: Buildings 227,906,646 8,764, ,671,131 Improvements Other than Buildings 51,990, ,038, ,028,918 Equipment 115,830,221 12,394, ,224,781 Softw are 2,950,903-2,950,903 Infrastructure 1,205,974,185-1,205,974,185 Capital Assets, Being Depreciated 1,604,652, ,197,248 1,842,849,918 Less: Accumulated Depreciation (643,908,280) (108,612,174) (752,520,454) Total Capital Assets, Being Depreciated, Net 960,744, ,585,074 1,090,329,464 Total Capital Assets, Net $ 1,393,262,273 $ 143,935,962 $ 1,537,198,235 C. Construction Commitments The following is a summary of construction commitments outstanding at September 30, 2014: Projects Spent-to-Date Remaining Commitment Road & Bridge Projects $ 12,284,186 $ 4,616,772 Re-Roof Various Buildings 68,404 6,169 Old Jail Renovation 294, ,072 RLE Parking Lot/Ballfield 82, ,365 Stormw ater Projects 304,256 69,082 New ton Recycle Center 1,964,836 61,556 Water & Sew er Projects 4,317,255 1,850,257 Total $ 19,316,094 $ 7,363,273 D. Capital Assets under Lease Purchase Commitments Leased equipment under capital lease in capital assets at September 30, 2014, included equipment of $1,208,062 less accumulated depreciation of $38,788. Amortization of leased equipment is included with depreciation expense. 60

62 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 5 LONG-TERM LIABILITIES A. Schedule of Changes in Long-term Liabilities The County s outstanding long-term liabilities include bonds payable, notes payable, claims payable, compensated absences, other post employment benefits, claims and judgments, accrued landfill closure costs and remediation costs. The following is a schedule of changes in the County s long-term liabilities for the fiscal year ended September 30, 2014: Balance Balance Due Within 10/1/13 Additions Reductions 9/30/14 One Year Governmental Activities: Bonds Payable: General Obligation Bonds $ 3,400,000 $ - $ (620,000) $ 2,780,000 $ 650,000 Revenue Bonds 56,720,000 - (5,265,000) 51,455,000 5,770,000 Special Assessment debt with governmental commitment 12,050,829 3,105,919 (2,533,396) 12,623,352 1,952,582 Less Other Debt Amounts: Bond Issuance Discounts (201,426) - 19,600 (181,826) - Total Bonds Payable 71,969,403 3,105,919 (8,398,796) 66,676,526 8,372,582 Notes Payable - 1,169,274-1,169,274 25,588 Claims Payable 10,929,665 2,973,297 (3,952,215) 9,950,747 1,990,149 Compensated Absences 15,170,547 9,696,338 (10,170,429) 14,696,456 2,939,291 Other Post Empl Benefits 16,030,281 1,539,309-17,569,590 - Governmental Activity Long-term Liabilities $ 114,099,896 $ 18,484,137 $ (22,521,440) $ 110,062,593 $ 13,327,610 Deferred Inflows of Resources: Deferred Charge Debt Refunding 120,561 - (64,306) 56,255 - Business-type Activities: Bonds Payable: Revenue Bonds $ 70,580,000 $ - $ (2,800,000) $ 67,780,000 $ 2,835,000 Less Other Debt Amounts: Bond Issuance Premiums 1,957,132 - (108,730) 1,848,402 - Total Bonds Payable 72,537,132 - (2,908,730) 69,628,402 2,835,000 Notes Payable 24,838,451 4,970,799 (1,764,267) 28,044,983 1,469,839 Compensated Absences 483, ,648 (341,729) 483,689 96,738 Other Post Empl Benefits 661,153 45, ,872 - Landfill Closure Costs 25,267,847 - (1,467,675) 23,800, ,380 Pollution Remediation Costs 4,027,651 - (243,125) 3,784, ,901 Business-type Activity Long-term Liabilities $ 127,816,004 $ 5,358,166 $ (6,725,526) $ 126,448,644 $ 5,881,858 Deferred Outflows of Resources: Deferred Charge Debt Refunding (3,831,780) - 217,580 (3,614,200) - Compensated absences and Other Post Employment Benefits will be liquidated in future periods primarily by the general revenue of the General Fund and ad valorem taxes of the Fire Rescue and EMS Fund and the MSTU for Law Enforcement Special Revenue Funds. 61

63 NOTES TO FINANCIAL STATEMENTS September 30, 2014 B. Bonds Payable The County has general obligation, special assessment, and revenue bonds outstanding at year end. Special assessment bonds are secured by liens on real property, governmental revenue bonds are secured by the halfcent sales tax revenues and enterprise revenue bonds are secured by the revenues generated by the issuing fund. The limited ad valorem tax bonds are limited to a levy not to exceed one-half of one mill in any given year. The following is a schedule of bonds outstanding at September 30, 2014: Amount Amount Interest Purpose of Issue Issued Outstanding Rates Maturity Governmental Activities: General Obligation Bonds: Limited Ad Valorem Tax Bonds, Series 1998 Land acquisition for $ 9,935,000 $ 2,780, %-4.70% 2018 parks and conserv ation Total General Obligation Bonds 2,780,000 Rev enue Bonds: Public Improv ement Rev enue Bonds, Roads 23,190,000 19,840, %-4.93% 2029 Series 2009A Public Improv ement Rev enue Refunding Bonds, Refunding 6,805,000 3,540, %-3.24% 2014 Series 2009B Public Improv ement Rev enue Bonds, Roads 32,515,000 28,075, %-4.34% 2029 Series 2010 Total Rev enue Bonds 51,455,000 Special Assessment Bonds: Series 2004C Road and other 445,200 4, % 2015 Series 2005A infrastructure 1,791, , % 2016 Series 2006A improv ement projects 1,595, , % 2017 Series 2007A 2,266, , % 2017 Series 2007B 1,653, , % 2018 Series 2008A 3,374,560 1,033, % 2018 Series 2008B 2,749,793 1,302, % 2019 Series 2009A 1,298, , % 2019 Series 2010A 524, , % 2020 Series 2011A 2,532,443 1,747, % 2021 Series 2012A 1,913,421 1,457, % 2022 Series 2013A 1,866,400 1,547, % 2023 Series 2014A 3,105,919 3,105, % 2024 Total Special Assessment Bonds 12,623,352 Total Bonds Payable - Governmental Activities $ 66,858,352 Business-type Activities: Rev enue Bonds: Utilities Sy stem Rev enue Bonds, Utility acquisitions and 9,710,000 8,445, % 2029 Series 2010 sy stem improv ements Utilities Sy stem Rev enue Refunding Bonds, Refunding 21,710,000 19,550, % 2027 Series 2011 Utilities Sy stem Rev enue Refunding Bonds, Refunding 39,940,000 39,785, %-5.00% 2027 Series 2012 Total Bonds Payable - Business-type Activities $ 67,780,000 62

64 NOTES TO FINANCIAL STATEMENTS September 30, 2014 C. Notes Payable The County has various notes, contracts outstanding at year end. The following is a summary of notes outstanding at September 30, 2014: Purpose Interest Rates Remaining Balance Business-type Activities: Marion County Utility Fund SRF Contract Payable - Oak Run System Improvements 1.11% $ 11,224,312 SRF Contract Payable - Stonecrest System Improvements 1.11% 8,860,699 SRF Contract Payable - JB Ranch System Improvements 1.11% 3,247,069 Windstream Utilities System Acquisition 4.50% 4,535,803 SRF Contract Payable - SSRU System Acquisition 2.67% $ 177,100 28,044,983 Governmental-type Activities: General Fund Motorola Radio System Upgrade 1.68% $ 1,050,290 Dell SonicWall 2.47% $ 118,984 1,169,274 D. Debt Service Requirements The following schedules show debt service requirements to maturity for the County s general obligation bonds, special assessment bonds, revenue bonds, and notes payable: Governmental Activities: General Revenue and Special Fiscal Year Obligation Bonds Assessment Bonds Notes Payable Total Principal Interest Principal Interest Principal Interest 2015 $ 650,000 $ 128,148 $ 7,722,582 $ 2,424,883 $ 25,588 $ - $ 10,951, ,000 98,898 4,314,391 2,257, ,586 25,716 7,597, ,000 67,618 4,372,017 2,107, ,303 16,999 7,504, ,000 34,780 4,164,994 1,954, ,654 12,648 7,141, ,895,663 1,807, ,097 8,205 5,950, ,868,705 6,942, ,046 3,668 25,033, ,680,000 3,156, ,836, ,060,000 97, ,157,094 Total $ 2,780,000 $ 329,444 $ 64,078,352 $ 20,748,456 $ 1,169,274 $ 67,236 $ 89,172,762 Business-type Activities: Fiscal Year Revenue Bonds Notes Payable Total Principal Interest Principal Interest 2015 $ 2,835,000 $ 2,609,429 $ 1,469,839 $ 737,332 $ 7,651, ,925,000 2,509,108 1,506, ,752 7,641, ,025,000 2,399,859 1,543, ,209 7,632, ,150,000 2,286,411 1,582, ,673 7,643, ,265,000 2,168,474 1,622, ,116 7,640, ,320,000 8,794,112 8,718,992 2,294,599 38,127, ,310,000 5,206,284 9,358,993 1,149,067 34,024, ,950,000 1,399,409 1,163, ,701 18,896, ,078, ,142 1,201,065 Total $ 67,780,000 $ 27,373,086 $ 28,044,983 $ 7,260,591 $ 130,458,660 63

65 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The future minimum lease obligations and the net present value of these minimum lease payments as of September 30, 2014, were as follows: Fiscal Year Governmental Activities 2015 $ 25, , , , , ,714 Total minimum lease payment 1,236,510 less: amount representing interest (67,236) Present value of minimum lease payments $ 1,169,274 E. Pledged Revenues Marion County has pledged certain revenues, to repay certain bonds and notes outstanding as of September 30, The following table reports the revenues, sometimes net of related operating expenses, pledged for each debt issue, the amounts of such revenues received in the current year, the current year principal and interest paid on the debt, the approximate percentage of each revenue which is pledged to meet the debt obligation, the date through which the revenue is pledged under the debt agreement, and the total pledged future revenues for each debt, which is the amount of the remaining principal and interest on the bonds and notes at September 30, 2014: Current Pledged Estimated Year Outstanding Revenue Principal Revenue Total Principal Percentage & Interest GOVERNMENTAL ACTIVITIES Pledged Revenue & Interest Pledged Paid Maturity Revenue Bonds: Public Improvement Revenue Bonds A Sales tax 18,437,597 28,261, % 1,784, Public Improvement Refunding Bonds B Sales tax 18,437,597 3,598, % 890, Public Improvement Revenue Bonds Sales tax 18,437,597 38,757, % 2,440, Total Revenue Notes and Bonds - Governmental Activities $ 55,312,791 $ 70,617,234 $ 5,114,369 BUSINESS-TYPE ACTIVITIES Revenue Bonds: Utility System Revenue Bonds System Revenue 22,086,023 11,795, % 743, Utility System Revenue Bonds System Revenue 22,086,023 23,562, % 1,986, Utility System Revenue Bonds System Revenue 22,086,023 59,795, % 1,811, Revenue Notes: 2003 State Revolving Fund Loan - SSRU System Revenue 22,086, , % 22, State Revolving Fund Loan - JB Ranch System Revenue 22,086,023 3,748, % 277, State Revolving Fund Loan - Oak Run System Revenue 22,086,023 13,360, % 890, State Revolving Fund Loan - Stonecrest System Revenue 22,086,023 10,568, % 704, Windstream Utilities Loan System Revenue 22,086,023 7,428, % 434, Total Revenue Notes and Bonds - Business Activities $ 176,688,184 $ 130,458,660 $ 6,872,342 64

66 NOTES TO FINANCIAL STATEMENTS September 30, 2014 F. Defeased Debt The County advance refunds and defeases debt primarily as a means of reducing debt service requirements. At such time, the liability for that debt is removed from the applicable statement of net position. As of September 30, 2014, the County has the following legally defeased outstanding bonds, notes or other obligations, which were funded in previous years by the placement of assets in an irrevocable trust with an escrow agent to be used for satisfying debt service requirements: Bond Issue G. Compensated Absences Outstanding at 10/1/13 Additions/ Reductions Outstanding at 9/30/ A $ 945,000 $ (945,000) $ - Compensated absences are accrued in proprietary funds at year end. The County does not accrue compensated absences in governmental funds. However, compensated absences paid in governmental funds are charged to the fund and function in which the employee was related and are reported as a liability on the government-wide statement for governmental activities. The following is a summary schedule of compensated absences as of September 30, 2014: Balance Balance 9/30/13 Additions (Reductions) 9/30/14 Governmental Activities: Board of County Commissioners $ 4,619,741 $ 3,623,062 $ (3,593,966) $ 4,648,837 Clerk of the Circuit Court 629, ,442 (462,177) 616,843 Sheriff 9,364,583 4,894,151 (5,427,246) 8,831,488 Tax Collector 286, ,340 (383,070) 289,655 Property Appraiser 197, ,020 (229,613) 223,159 Supervisor of Elections 53,687 70,654 (60,838) 63,503 Internal Service Fund 18,821 17,669 (13,519) 22,971 $ 15,170,547 $ 9,696,338 $ (10,170,429) $ 14,696,456 Business-type Activities: Solid Waste Fund $ 224,610 $ 131,321 $ (140,112) $ 215,819 Marion County Utility Fund 259, ,327 (201,617) 267,870 $ 483,770 $ 341,648 $ (341,729) $ 483,689 H. Landfill Closure Costs State and federal laws and regulations require the County to place a final cover on its landfill when closed and to perform certain maintenance and monitoring functions at the landfill site for thirty years after closure. The cost of landfill closure and postclosure care is allocated based on landfill capacity used to date. As of September 30, 2014, the landfill was at 80.1% of original design capacity. The County expects the landfill to close in 2020 or sooner. The accrued cost for closure care as of September 30, 2014, was $23,800,172. The remaining closure and postclosure costs to be recognized, based upon the current engineering estimates are $5,308,232. All amounts recognized are based on an estimate by the County s engineers of the cost to perform all closure and postclosure care as of September 30, Actual costs may be different due to inflation, deflation, changes in technology, or changes in laws and regulations. The County is required by state and federal laws and regulations to establish escrow accounts for closure and postclosure costs of the landfill. The County has complied with these requirements by depositing required amounts into a landfill management escrow account. Any balance in this account is reported as a restricted asset on the statement of net position of the Solid Waste enterprise fund. 65

67 NOTES TO FINANCIAL STATEMENTS September 30, 2014 I. Bond Covenant Requirements Revenue bond covenants, revenue bond debt service and transfer requirement provisions require either (1) monthly sinking fund contributions for current debt service of one-twelfth and one-sixth of the next maturing principal and interest payment, respectively, or (2) an annual approach where all receipts are deposited into a sinking fund until the funds therein are sufficient to meet the maturing principal and interest payments. In addition, certain reserves for future debt service requirements (generally the largest principal and interest payment due in any succeeding year) must be maintained. The sum of the net revenue, available impact fees and utility services fees to be received in such bond year shall be at least equal to one hundred ten percent (110%) of the bond debt service requirements. Bond covenants require debt service reserves to be either fully funded or insured. If insured, the surety provider must maintain sufficient ratings. The County has reserved $4,787,423 for the Utility Bonds and $4,219,294 for Transportation bonds to fulfill the covenant requirements. The County is not aware of any areas of noncompliance with respect to its bond covenants. NOTE 6 RISK MANAGEMENT PROGRAM The County maintains a risk management program whereby the County is responsible for specific workers compensation claims, general property and casualty, and automobile liabilities. The activities of the risk management program are accounted for in an internal service fund. The program covers individual workers compensation claims up to $1,000,000. The County allocates costs to funds and functions based on standard workers compensation premium schedules. The program covers individual property damage claims up to $100,000 and $100,000 for general liability and automobile liability claims. Excess coverage for property claims is the scheduled value of approximately $500 million. The excess coverage for workers compensation, general liability and automobile liability have been discontinued during the fiscal year. In addition, there have been no settlements which exceeded the County s insurance coverage for each of the past three fiscal years. All departments of the County participate in the program. Payments are made by various funds to the selfinsurance fund based on past experience of the amounts needed to pay current year claims. For the year ended September 30, 2014, the County obtained actuarially determined estimates of the total claims loss reserves for workers compensation, general liability and automobile liability self insurance risks. The claims liability of $9,950,747 reported in the governmental activities statement of net position as of September 30, 2014 is based on the requirements of GAAP which requires that a liability for unpaid claims costs, including estimates of costs relating to incurred but not reported claims, be accrued when insured events occur. The liability reported includes non-incremental claims adjustment expenses as part of the liability for claims and judgments. The risk management program is also used to account for the amounts collected and disbursed to a third party insurer for the County employees major medical, disability income, and life insurance. Changes in the risk management program s claims liability, for the past two fiscal years, are as follows: Current Year Fiscal Year Beginning Balance Claims / Changes in Estimates Current Year Claims Payments Ending Balance $ 13,093,573 $ 1,759,443 $ (3,923,351) $ 10,929, ,929,665 2,973,297 (3,952,215) 9,950,747 The County s Internal Service Fund provides the participants comprehensive safety programs, management of insurance, casualty/liability review and reduction, self insurance or pooled insurance programs, and claims management. 66

68 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 7 RETIREMENT SYSTEM The Florida Retirement System (FRS) is a multiple employer, cost sharing, contributory retirement system, administered by the State of Florida (State). Beginning in 2002, the FRS became one system with two primary plans, a defined benefit plan (FRS Pension Plan) and a defined contribution plan alternative to the defined benefit plan known as the Public Employee Optional Retirement Program (FRS Investment Plan). The effective date of the FRS Investment Plan was July 1, The FRS provides retirement, disability and death benefits to members. The State issues a publicly available financial report that includes financial statements and required supplementary information for FRS. That report may be obtained by writing to: State of Florida Division of Retirement Department of Management Services P.O. Box 9000 Tallahassee, FL Or by contacting Research and Education by at rep@dms.myflorida.com or by phone at Employer contributions include 1.26% for a post retirement health insurance subsidy, 0.04% administrative/educational fee and any applicable UAL rates. The FRS also provides disability and survivors benefits. Benefits are established by State Statute. The FRS Pension Plan provides for the vesting of benefits after six years of creditable service or after eight years of credible service for members first enrolled after July 1, Members are eligible for normal retirement when they have met the minimum requirements listed below. Early retirement may be taken any time after vesting; however, there is a 5% benefit reduction for each year prior to normal retirement age. Members are also eligible for in-line-of-duty or regular disability benefits if permanently disabled and unable to work. Benefits are computed on the basis of age, average final compensation and service credit. Normal Retirement Requirements Regular Class, Senior Management Service Class, and Elected Officers Class Special Risk Class Special Risk Administrative Support Class Six years of service and age 62, or the age after 62 the member becomes vested, or thirty years of service, regardless of age, whichever comes first. Eight years of service for members first enrolled after July 1, 2011 and age 65 the member becomes vested, or the age after 65 the member becomes vested, or thirty three years of service regardless of the age before 65. Six years of special risk service and age 55, or twenty-five total years special risk service, regardless of age. Eight years of service for members first enrolled after July 1, 2011 and age 60 the member becomes vested, or thirty years of service regardless of age before 60 or age 57 and completes 30 years of service and up to 4 years of wartime military service purchased under section Florida Statutes. Special risk requirements apply to service in this class if member has six years (eight years for members first enrolled after July 1, 2011) actual special risk service; otherwise regular member requirements apply. 67

69 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Funding Policy The FRS has six classes of membership, which are applicable to the County. The County is required to contribute at an actuarially determined rate. These rates are a percent of annual covered payroll. Descriptions and contribution rates in effect during the period ended September 30, 2014 and two preceding years, are as follows: Regular Class - Members not qualifying for other classes. 7.37% 6.95% 5.18% Special Risk Class - Members employed as law enforcement 19.82% 19.06% 14.90% officers, firefighters, or correctional officers meet the criteria to qualify for this class. Senior Management 21.14% 18.31% 6.30% Special Risk Administrative Support 42.07% 35.96% 5.91% Elected County Officers 43.24% 33.03% 10.23% Deferred Retirement Option Program (DROP) 12.28% 12.84% 5.44% For the years ended September 30, 2014, 2013, and 2012, total contributions were $15,154,573, $12,461,128, and $11,032,828 respectively, equal to100% of the required contributions for each year. As of July 1, 2011, members contribute 3% of their salary as retirement contributions. Members participating in DROP are not required to make 3% contributions. The Florida Legislature has the authority for establishing or amending retirement legislation and related bills of significance to members of the Florida Retirement System (FRS). Passed bills are presented to the Governor and approved before they may be enacted into law. NOTE 8 OTHER POSTEMPLOYMENT BENEFITS (OPEB) Plan Description The Other Postemployment Benefit (OPEB) Plan is a single-employer benefit plan administered by the County. Retiree s are charged whatever the insurance company charges for the type of coverage elected. However, the premiums charged by the insurance company are based on a blending of the experience among younger active employees and older retired employees. The older retirees usually have higher costs, which means that the County is actually subsidizing the cost of the retiree coverage because it pays all or a significant portion of that premium on behalf of the active employees. GASB No. 45 calls this the implicit rate subsidy. In addition to the implicit rate subsidy, the Marion County Sheriff s Office provides retirees with a direct subsidy of $5 per month per each credited year of service with the Sheriff s Office. This amount is limited to $150 per month and in no event will it exceed total cost of health insurance net of the Florida Retirement System s (FRS) health insurance subsidy. This subsidy is only available until the retiree becomes Medicare eligible. The health insurance subsidy is provided under the FRS and is not considered part of GASB No. 45. Retirees and their dependents are permitted to remain covered under the County s respective medical and insurance plans as long as they pay a full premium applicable to coverage elected, subject to direct subsidies discussed above. This conforms to the minimum required of Florida governmental employers per Ch , F.S. Benefits that exceed this minimum are established and may be amended through action from the Board of County Commissioners (the "Board"). The OPEB Plan does not issue a stand-alone report and is not included in the report of the FRS or other entity. As of the valuation date of October 1, 2013, there was no significant change in the benefits of the Plan. 68

70 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Funding Policy. For the OPEB Plan, contribution requirements of the County are established and may be amended through action from the Board. Currently the County s OPEB Benefits are unfunded. The required contributions are based on pay-as-you-go financing requirements. There is no separate trust fund or equivalent arrangement into which the County would make contributions to advance-fund the obligation, as it does for its pension plan, the FRS. Therefore, ultimate subsidies which are provided over time are financed directly by general assets of the County, which are invested in very short-term fixed income instruments according to its current investment policy. The interest rate used to calculate the present values and cost of OPEB must be the long-range expected return on such short-term fixed income instruments. The County selected an interest discount rate of 3.5% for this purpose. The net amount of retiree contributions totaled $861,919. Annual OPEB Cost and Net OPEB Obligation. The County s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The Unfunded Actuarial Accrued Liability (UAAL) represents an actuarial measurement of the obligation that has accrued so far based on the promise that has been made to current retirees and to current employees. Since the County s OPEB is currently unfunded, the offset to that expense comes from actual subsidies paid on behalf of the current retirees and their dependents for the current year. This offset is called the Employer Contribution and equals the total age-adjusted costs paid by the County for coverage for the retirees and their dependents for the year (net of the retiree s own payments for the year). The following table shows the components of the County s net OPEB obligation: FY14 Valuation as of 10/01/13 Normal Cost (service cost for one year) $ 1,572,385 Amortization of Unfunded Actuarial Accrued Liability (UAAL) 1,114,319 Annual Required Contribution (ARC) 2,686,704 Annual Required Contribution (ARC) 2,686,704 Interest on Net OPEB Obligation 584,200 Adjustment to ARC (695,476) Annual OPEB Cost (Expense) 2,575,428 Employer contributions Made 990,400 Increase (Decrease) in Net OPEB Obligation 1,585,028 Net OPEB Obligation at beginning of year 16,691,434 Net OPEB Obligation at end of Year $ 18,276,462 69

71 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The County s annual OPEB cost, the percentage of annual expected employer contribution toward OPEB cost, and the net OPEB obligation for 2014 with two applicable preceding years was as follows: Fiscal Year Ended Annual OPEB Cost Employer Contribution Percentage of Annual OPEB Cost Contributed Net OPEB Obligation 09/30/2012 $ 2,512,889 $ 882, % $ 14,980,043 09/30/2013 2,654, , % 16,691,434 09/30/2014 2,575, , % 18,276,462 Funded Status and Funding Progress. As of September 30, 2014, the most recent actuarial valuation date of October 1, 2013, the plan was unfunded. The actuarial accrued liability for benefits was $26,287,624, and the actuarial value of assets was $0.00, resulting in an unfunded actuarial accrued liability (UAAL) of $26,287,624. The covered payroll (annual payroll of active employees covered by the plan) was $90,911,994 and the ratio of the UAAL to the covered payroll was %. 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, termination, 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 multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. In any long-term actuarial valuation, certain demographic, economic and behavioral assumptions are made concerning the population, the investment discount rates, inflation rates, and the benefits provided. These actuarial assumptions form the basis for the actuarial model which is used to project the future population, the future benefits provided and the contributions collected. Then the investment discount rate assumption is used to discount those projected net OPEB benefits to a present value. This and other related present values are used to calculate the annual OPEB cost. The actuarial assumptions also include a payroll growth rate of 3.5%, and an annual healthcare cost trend rate of 13% (10% initially), reduced annually to an ultimate rate of 5.56% after eight twenty-nine years. The remaining amortization period at September 30, 2014, was 24 years. The investment rate of return and projected salary increases include general inflation at 3%. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of the legal or contractual funding limitations. The results presented as of the actuarial valuation date have been derived using the individual entry age actuarial cost method with an amortization of the UAAL as a level percent of projected payroll over a closed period of thirty years from This is the most common such method used for government pension valuations (and likely so for OPEB valuations) and spreads the cost evenly as a percent of pay throughout the collective careers of those in the covered workforce. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employees and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit cost between the employer and the plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The actuarial calculations were based on information outlined in the substantive plan and the core actuarial assumptions and methods. There were no significant changes as described in Paragraph 12 of GASB Statement No. 45 since the previous valuation. The discount rate and payroll growth rate stayed the same at 3.5%. The number of covered active employees decreased from the prior valuation date from 2306 to 2240, while the 70

72 NOTES TO FINANCIAL STATEMENTS September 30, 2014 number of covered retirees increased from 141 to 171. These population changes had an increasing effect on the cost and liability. The cost of coverage provided to employees, retirees and their dependents increased less than expected. The average cost increased from $641 to $706 per subscriber per month, which is below the $752 projected in the previous valuation. This had a decreasing effect on the costs and liabilities. Medical trend assumptions for medical/rx cost increases were revised from 7.5% in the previous valuation to 13% for the year beginning October 1, 2014, and decreasing each subsequent year until reaching the ultimate value of 5%. This had an increasing effect on the costs and liabilities. The County s health plan was already in compliance with the Affordable Care Act; consequently no additional consideration has been given in the valuation of these liabilities as of this valuation. The County is not projected to be assessed the Excise Tax on High-Cost Employer Health Plans until several years after it becomes effective. Absent any plan changes, the tax will have very minimal effect on the plan cost until The net effect of the assumption changes was a decrease in plan costs and liabilities. NOTE 9 RESTRICTED NET POSITION FOR OTHER PURPOSES Restricted Net Position for Other Purposes of the County's governmental activities at September 30, 2014, are as follows: NOTE 10 COMMITMENTS AND CONTINGENCIES A. Litigation Courts $ 38,728 Public Safety 3,256,782 Records Modernization 795,900 Social Services 1,446,366 Tourism $ 663,338 6,201,114 The County is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of its operations. Claims covered by the risk management self insurance program are reviewed and losses are accrued as required in the judgment of management. In the opinion of management, based on the advice of legal counsel, the ultimate disposition of lawsuits and claims will not have a material adverse effect on the financial position of the County. B. Grants Amounts received or receivable from the grantor agencies are subject to audit and adjustment by grantor agencies. If expenditures are disallowed as a result of these audits, the claims for reimbursement to the grantor agency would become a liability of the County. In the opinion of management, any such adjustments would not be significant. C. Pollution Remediation Obligation The County has recorded in its financial statements a cost estimate for pollution remediation at the Martel, Davis and Newton Landfill owned and/or operated by the County. These sites have been identified by environmental regulators as locations where historic uses have contributed to various forms of environmental pollution to the properties. The County has reported a cumulative liability of $3,784,526 at September 30, 2014, to address required environmental cleanup costs associated with these sites. The estimate of costs used to establish the liability was developed through extensive site analysis by independent engineers retained by the County. The liability was measured by estimating a reasonable range of potential outlays and multiplying those outlays by their probability of occurrence. The liability could change due to price increases or reductions, technology, or changes in applicable laws or regulations. The County believes that its maximum exposure for the Newton cleanup is not currently estimable. Costs of cleaning up the site and restoration of natural resources will be estimated upon completion of the site assessment and investigation. The County does not expect to recover any amounts for remediation cost from any other party. 71

73 NOTES TO FINANCIAL STATEMENTS September 30, 2014 D. Developer Agreements The County has entered into several developer agreements which may result in future financial obligations. These agreements with various developers are primarily for capital cost associated with road construction or transportation projects, in which a future asset may be contributed to the County or will benefit the County. The County has agreed to provide up to $12.37 million in credits, waivers, reductions and/or direct payments for future building impact fees. E. Transportation Bonds The County has issued transportation bonds (phase 1 and phase 2) for new road construction and to increase capacity on existing roads in FY 2009 and FY These Public Improvement Revenue Bonds were secured by the local government half cent sales tax, but funded by the recently approved five cent local option gas tax effective January 1, The cumulative bonded funds totaled $55,705,000. As of September 30, 2014, approximately $18 million was unspent and restricted for Road Construction in the Public Improvement Capital Projects Fund. F. Landfill Disposal Agreement The County has entered into an agreement with A.C.M.S. Inc. to secure long-term disposal rights for municipal solid waste in a fully permitted, fully operational Class I landfill in Sumter County. The County will receive a significantly reduced rate for disposal rights in consideration for the prepayment of those rights. The County s upfront payments, which will be disbursed as construction related payments, will enable A.C.M.S. Inc to fund the construction of the First cell of the Landfill. The upfront payment will secure for the County, a warranted and unencumbered, limited property interest in the Landfill, a long-term service agreement in the nature of a prepaid tipping fee, and certain performance security rights on behalf of the public interest in the event of a default. As of September 30, 2014, the total County payment of $20 million has been recorded as prepaid landfill fees. This represents the tipping fee for the right to dispose of 2.5 million tons of solid waste at the facility for a period up to 30 years. The landfill construction was completed in 2013; however, a timing and utilization plan has not yet been determined. G. Retrospective Medicaid Revenue Sharing Reductions Beginning with the October 2012 distribution, the Department of Revenue is required to reduce the County s Revenue Sharing distributions pursuant to s F.S by one thirty-sixth of the amount certified by the Agency for Health Care Administration for the county s Medicaid billings from November 1, 2001 through April 30, 2012 which remain unpaid. The amount certified for Marion County was $1,167,158; one thirty-sixth of that total is $32,421. This reduction was made for twelve months through September 30, Beginning in October 2013, the monthly reduction was reduced to one forty-eighth of the remaining balance, or $16,211. NOTE 11 NEW PRONOUNCEMENTS GASB Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27. The objective of this statement is to improve accounting and financial reporting by state and local governments for pensions. It also improves information provided by state and local governmental employers about financial support for pensions that is provided by other entities. This statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision-useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency. In addition to improving the disclosures regarding pension plans in the notes to the financial statements, GASB 68 will require the County to retroactively record the County s portion of the Florida Retirement System s Net Pension Liability on the County s Statements of Net Position, which will have the effect of decreasing the County s Net Position. The County s portion of the Florida Retirement System s Net Pension Liability is unknown, but may be significant. This statement will be effective for the County s fiscal year ended September 30,

74 REQUIRED SUPPLEMENTARY INFORMATION Other Post Employment Benefits: Schedule of Funding Progress Schedule of Employer Contributions 73

75 MARION COUNTY FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS FOR OTHER POSTEMPLOYMENT BENEFITS Actuarial Valuation Date 10/1/ /01/ /01/2013 Actuarial Actuarial Value of Assets Accrued Liability (AAL) Entry Age Unfunded AAL (UAAL) Funded Ratio Covered payroll UAAL as a Percentage of Covered Payroll (a) (b) (b-a) (a/b) (c) ([b-a]/c) $0 $ 24,824,472 $ 24,824, % 96,333, % $0 $ 27,592,705 $ 27,592, % 91,136, % $0 $ 26,287,624 $ 26,287, % 90,911, % SCHEDULE OF EMPLOYER CONTRIBUTIONS FOR OTHER POST EMPLOYMENT BENEFITS Fiscal Year Ending Annual OPEB Cost Annual Required Contribution (ARC) OPEB Cost Contributed % of ARC Contributed Net OPEB Obligation 09/30/ /30/ /30/ /30/ /30/ /30/2014 $ 3,625,376 $ 3,578,510 $ 819, % $ 9,835,432 $ 2,537,946 $ 2,495,794 $ 825, % $ 11,547,569 $ 2,679,302 $ 2,645,087 $ 876, % $ 13,350,020 $ 2,512,889 $ 2,528,766 $ 882, % $ 14,980,043 $ 2,654,509 $ 2,672,325 $ 943, % $ 16,691,434 $ 2,575,428 $ 2,686,704 $ 990, % $ 18,276,462 74

76 OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule: Public Improvement Transportation Capital Projects Funds General Fund: Combining Balance Sheet and Combining Schedules for General Fund Non- Major Governmental Funds: Combining Financial Statements for All Nonmajor Governmental Funds and Individual Budgetary Comparison Schedules for all Budgeted Nonmajor Governmental Funds 75

77 BUDGETARY COMPARISON SCHEDULE PUBLIC IMPROVEMENT TRANSPORTATION CAPITAL PROJECTS For the Year Ended September 30, 2014 Variance with Final Budget Actual Amounts Final Budget - Over (Under) REVENUES Investment Income $ 43,929 $ 125,521 $ 81,592 Miscellaneous Revenues Total Revenues 43, ,527 81,598 EXPENDITURES Capital Outlay 22,967,828 7,978,061 14,989,767 Total Expenditures 22,967,828 7,978,061 14,989,767 Excess (Deficiency) of Revenues Over (Under) Expenditures (22,923,899) (7,852,534) 15,071,365 Net Change in Fund Balance (22,923,899) (7,852,534) 15,071,365 Fund Balance - Beginning 22,923,899 27,605,153 4,681,254 Fund Balance - Ending $ - $ 19,752,619 $ 19,752,619 76

78 GOVERNMENTAL FUNDS GENERAL FUND The General Fund is the government s primary operating fund. It is used to account for and report all financial resources not account for and reported in another fund. The General Fund includes the Board of County Commissioners, Clerk of Circuit Court and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector: Board of County Commissioners This fund is the primary operating fund of Marion County. It is used to account for all financial resources of the general government except those required to be accounted for in other funds. Clerk of the Circuit Court and Comptroller This fund reflects the activities of the Office of the Clerk of Circuit Court and Comptroller. Services provided are in accordance with provisions of the Florida Statutes related primarily to the county and circuit court systems, recording operations, and various other services. Property Appraiser This fund reflects the operations of the Office of the Property Appraiser who provides independent appraisals of tangible and personal property for all taxing authorities within the County. Sheriff This fund reflects the operations of the Office of the Sheriff. Services provided are for all the law enforcement activities within the County. Supervisor of Elections This fund reflects the operations of the Office of the Supervisor of Elections in the performance of its duties in accordance with Florida Statutes. Tax Collector This fund reflects the operations of the Office of the Tax Collector who collects and remits ad valorem taxes, licenses, and other revenues, to the related taxing authorities. 77

79 COMBINING BALANCE SHEET GENERAL FUND BY CATEGORY September 30, 2014 Board Of County Commissioners Clerk of The Circuit Court Property Appraiser ASSETS Cash and Cash Equivalents $ 1,167,095 $ 1,202,545 $ 8,967 Investments 25,348, Accounts Receivable 2,347, Accrued Interest Receivable 56, Due from Other Funds 1,589,889 11,235 - Due from Other Governments 3,005, ,728 - Inventories 972, Prepaid Items 55,096 39,515 66,501 Total Assets $ 34,541,950 $ 1,403,056 $ 75,468 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts Payable $ 1,568,578 $ 91,469 $ - Contracts Payable 10, Accrued Liabilities 746, ,105 22,720 Due to Other Funds 11, ,776 51,543 Due to Other Governments 689, ,984 1,205 Due to Individuals 9,835 51,637 - Deposits 19,035 10,085 - Unearned Revenues 3,030, Advanced Grants 160, Total Liabilities 6,245,458 1,403,056 75,468 Deferred Inflows of Resources: Unavailable Revenues 1,006, Total Deferred Inflows of Resources 1,006, Fund Balances: Nonspendable: Inventories 972, Prepaid Items 55,096 39,515 66,501 Assigned to: Subsequent Year's Budget 12,964, Unassigned 13,297,338 (39,515) (66,501) Total Fund Balances 27,289, Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 34,541,950 $ 1,403,056 $ 75,468 78

80 Sheriff Supervisor of Elections Tax Collector Eliminations Total General Funds $ 3,610,946 $ 18,350 $ 491,841 $ - $ 6,499, ,348, , ,560, ,879 4,251-37,301 (1,589,889) 52, ,681-3,575, , , ,842 $ 3,828,951 $ 18,350 $ 953,553 $ (1,589,889) $ 39,231,439 $ 611,795 $ - $ 3,599 $ - $ 2,275, ,708-12, ,711-1,386,735 2,072,882 6, ,243 (1,589,889) 1,209, ,626,689 1,144, ,205, , ,030, ,236 3,828,951 18, ,553 (1,589,889) 10,934, ,006, ,006, , , , ,964, (3,730) - 13,187, ,289,748 $ 3,828,951 $ 18,350 $ 953,553 $ (1,589,889) $ 39,231,439 79

81 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - GENERAL FUND BY CATEGORY For the Year Ended September 30, 2014 Board Of County Commissioners Clerk of The Circuit Court Property Appraiser REVENUES Taxes $ 45,579,768 $ - $ - Permits and Fees 198, Intergovernmental Revenues 28,683, ,523 - Charges for Services 22,790,572 1,568, ,376 Judgments and Fines 353,387 1,662,325 - Court-Related Revenues 1,086,635 4,467,691 - Investment Income 226,994 5, Miscellaneous Revenues 12,557, ,791 5,115 Total Revenues 111,476,455 8,290, ,002 EXPENDITURES Current: General Government 22,436,272 4,490,598 3,599,484 Public Safety 23,252, Physical Environment 1,035, Transportation 966, Economic Environment 4,462, Human Services 11,171, Culture/Recreation 9,236, Court-Related 2,129,625 6,228,454 - Total Expenditures 74,691,665 10,719,052 3,599,484 Excess (Deficiency) of Revenues Over (Under) Expenditures 36,784,790 (2,428,290) (2,877,482) OTHER FINANCING SOURCES (USES) Transfers In 3,273,597 2,428,290 2,877,482 Transfers (Out) (45,770,816) - - Issuance of Capital Lease 1,169, Total Other Financing Sources and (Uses) (41,327,945) 2,428,290 2,877,482 Net Change in Fund Balances (4,543,155) - - Fund Balances - Beginning 31,832, Fund Balances - Ending $ 27,289,748 $ - $ - 80

82 Sheriff Supervisor of Elections Tax Collector Eliminations Total General Funds $ - $ - $ - $ - $ 45,579, , ,151, ,075, ,015, ,554, , (7,882,688) 4,798, (7,882,688) 112,606,531-2,231,803 6,833,196 (7,882,688) 31,708,665 68,752, ,005, ,035, , ,462, ,171, ,236, ,358,079 68,752,982 2,231,803 6,833,196 (7,882,688) 158,945,494 (68,752,982) (2,231,803) (6,833,196) - (46,338,963) 68,752,982 2,231,803 6,833,196 (43,980,711) 42,416, ,980,711 (1,790,105) ,169,274 68,752,982 2,231,803 6,833,196-41,795, (4,543,155) ,832,903 $ - $ - $ - $ - $ 27,289,748 81

83 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND For the Year Ended September 30, 2014 Original Budget Board Of County Commissioners Final Budget Actual Amounts REVENUES Taxes $ 45,071,614 $ 45,071,614 $ 45,579,768 Permits and Fees ,751 Intergovernmental Revenues 29,833,570 32,218,262 28,683,071 Charges for Services 22,028,985 22,028,985 22,790,572 Judgments and Fines 253, , ,387 Court-Related Revenues 1,089,634 1,152,075 1,086,635 Investment Income 337, , ,994 Miscellaneous Revenues 13,802,486 14,241,416 12,557,277 Total Revenues 112,417, ,303, ,476,455 EXPENDITURES Current: General Government 38,710,301 38,598,065 22,436,272 Public Safety 22,528,067 22,884,244 23,252,712 Physical Environment 1,155,773 1,252,954 1,035,481 Transportation 1,035,682 1,039, ,756 Economic Environment 6,815,614 9,048,398 4,462,969 Human Services 15,843,212 15,873,300 11,171,309 Culture/Recreation 12,132,334 12,238,380 9,236,541 Court-Related 2,392,898 2,487,724 2,129,625 Total Expenditures 100,613, ,422,972 74,691,665 Excess (Deficiency) of Revenues Over (Under) Expenditures 11,803,783 11,880,755 36,784,790 OTHER FINANCING SOURCES (USES) Transfers In 3,079,428 3,273,597 3,273,597 Transfers (Out) (45,676,138) (46,750,286) (45,770,816) Issuance of Capital Lease - - 1,169,274 Total Other Financing Sources and (Uses) (42,596,710) (43,476,689) (41,327,945) Net Change in Fund Balances (30,792,927) (31,595,934) (4,543,155) Fund Balances - Beginning 30,792,927 31,595,934 31,832,903 Fund Balances - Ending $ - $ - $ 27,289,748 82

84 Clerk of The Circuit Court Property Appraiser Original Budget Final Budget Actual Amounts Original Budget Final Budget Actual Amounts $ - $ - $ - $ - $ - $ , , , ,114,839 1,254,239 1,568, , , ,376 1,714,874 1,714,874 1,662, ,003,383 5,003,383 4,467, ,981 9,981 5, , , , ,115 8,233,846 8,375,491 8,290, , , ,002 4,465,253 4,617,232 4,490,598 3,629,489 3,646,606 3,599, ,271,827 6,271,827 6,228, ,737,080 10,889,059 10,719,052 3,629,489 3,646,606 3,599,484 (2,503,234) (2,513,568) (2,428,290) (2,913,113) (2,930,230) (2,877,482) 2,503,234 2,513,568 2,428,290 2,913,113 2,930,230 2,877, ,503,234 2,513,568 2,428,290 2,913,113 2,930,230 2,877, $ - $ - $ - $ - $ - $ - 83

85 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL -Continued GENERAL FUND For the Year Ended September 30, 2014 Original Budget Sheriff Final Budget Actual Amounts REVENUES Taxes $ - $ - $ - Permits and Fees Intergovernmental Revenues Charges for Services Judgments and Fines Court-Related Revenues Investment Income Miscellaneous Revenues Total Revenues EXPENDITURES Current: General Government Public Safety 67,053,024 70,552,069 68,752,982 Physical Environment Transportation Economic Environment Human Services Culture/Recreation Court-Related Total Expenditures 67,053,024 70,552,069 68,752,982 Excess (Deficiency) of Revenues Over (Under) Expenditures (67,053,024) (70,552,069) (68,752,982) OTHER FINANCING SOURCES (USES) Transfers In 67,053,024 70,552,069 68,752,982 Transfers (Out) Issuance of Capital Lease Total Other Financing Sources and (Uses) 67,053,024 70,552,069 68,752,982 Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending $ - $ - $ - 84

86 Supervisor of Elections Tax Collector Original Budget Final Budget Actual Amounts Original Budget Final Budget Actual Amounts $ - $ - $ - $ - $ - $ ,232,446 2,236,643 2,231,803 6,803,682 6,840,983 6,833, ,232,446 2,236,643 2,231,803 6,803,682 6,840,983 6,833,196 (2,232,446) (2,236,643) (2,231,803) (6,803,682) (6,840,983) (6,833,196) 2,232,446 2,236,643 2,231,803 6,803,682 6,840,983 6,833, ,232,446 2,236,643 2,231,803 6,803,682 6,840,983 6,833, $ - $ - $ - $ - $ - $ - 85

87 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - Continued GENERAL FUND For the Year Ended September 30, 2014 Original Budget Eliminations Final Budget Actual Amounts REVENUES Taxes $ - $ - $ - Permits and Fees Intergovernmental Revenues Charges for Services Judgments and Fines Court-Related Revenues Investment Income Miscellaneous Revenues - (7,882,688) (7,882,688) Total Revenues - (7,882,688) (7,882,688) EXPENDITURES Current: General Government - (7,882,688) (7,882,688) Public Safety Physical Environment Transportation Economic Environment Human Services Culture/Recreation Court-Related Total Expenditures - (7,882,688) (7,882,688) Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In - - (43,980,711) Transfers (Out) ,980,711 Issuance of Capital Lease Total Other Financing Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending $ - $ - $ - 86

88 TOTAL Original Budget Final Budget Actual Amounts Variance with Final Budget - Over (Under) $ 45,071,614 $ 45,071,614 $ 45,579,768 $ 508, , ,751 30,106,165 32,490,857 29,151,594 (3,339,263) 23,860,200 23,999,600 25,075,269 1,075,669 1,968,524 1,968,524 2,015,712 47,188 6,093,017 6,155,458 5,554,326 (601,132) 347, , ,616 (115,090) 13,920,660 6,479,147 4,798,495 (1,680,652) 121,367, ,512, ,606,531 (3,906,375) 55,841,171 48,056,841 31,708,665 16,348,176 89,581,091 93,436,313 92,005,694 1,430,619 1,155,773 1,252,954 1,035, ,473 1,035,682 1,039, ,756 73,151 6,815,614 9,048,398 4,462,969 4,585,429 15,843,212 15,873,300 11,171,309 4,701,991 12,132,334 12,238,380 9,236,541 3,001,839 8,664,725 8,759,551 8,358, , ,069, ,705, ,945,494 30,760,150 (69,701,716) (73,192,738) (46,338,963) 26,853,775 84,584,927 88,347,090 42,416,639 (45,930,451) (45,676,138) (46,750,286) (1,790,105) 44,960, ,169,274 1,169,274 38,908,789 41,596,804 41,795, ,004 (30,792,927) (31,595,934) (4,543,155) 27,052,779 30,792,927 31,595,934 31,832, ,969 $ - $ - $ 27,289,748 $ 27,289,748 87

89 NON-MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The County has the following Special Revenue Funds: Fine and Forfeiture Funds Fines and Forfeiture Fund Established pursuant to the provisions of Section , Florida Statutes, to account for expenditures related to the costs of criminal prosecutions and for the proceeds of certain court fines and costs. Fines and Forfeiture Crime Prevention Fund Established pursuant to the provisions of Section , to account for funds related to the costs of crime prevention and for the proceeds of certain court fines and costs. 80% Gas Tax Construction Fund Used to account for the County proceeds of the 80% portion of the Constitutional Gas Tax (2 cents per gallon), which is collected and distributed by the State of Florida. Expenditures from this fund may be used for the acquisition, construction and maintenance of roads as authorized by Section , Florida Statutes. 20% Gas Tax Construction Fund Used to account for the County s proceeds of the 20% portion of the Constitutional Gas Tax (2 cents per gallon), which is collected and distributed by the State of Florida. Purposes for which these funds may be expended have been restricted pursuant to an opinion of the Florida Attorney General and, therefore, are limited to the purchase of materials used in the construction and maintenance of roads and bridges. Sidewalk Construction Fund Created pursuant to the provisions of Section of the Land Development Code adopted by Ordinance 13-20, to account for sidewalk fees paid by developers to the County in lieu of construction along external streets. The County may use these funds toward construction of sidewalks throughout the County based on priorities established by the Board. Dunnellon Airport Fund Created pursuant to the provisions of Chapter , Laws of Florida, to account for the revenues and expenditures related to the operation of this Southwest Marion County facility. The Board of County Commissioners serve as the Dunnellon Airport Authority which is the governing body of this facility. Revenues are generated primarily through fuel sales and the rental of County-owned real property in addition to grants received from the State of Florida Department of Transportation. Expenditures predominantly result from the maintenance and or improvement to the airport runways and related improvements. Alcohol and Other Drug Abuse Trust Fund Created pursuant to the provisions of Section , Florida Statutes, and Ordinance to account for the mandatory costs, discretionary costs, and assessments remitted to Marion County pursuant to Sections , and , Florida Statutes. These monies shall be used only for the support of alcohol and other drug abuse treatment and educational programs based in Marion County, Florida, which meet the standards of qualifications for such programs of the Florida Department of Children and Family Services. 88

90 NON-MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS - Continued 2 nd Local Option Fuel Tax Fund Established pursuant to the provisions of Section , Florida Statutes, to account for the proceeds from the 2nd Local Option Fuel Tax (5 cents per gallon). The use of proceeds provides for distribution between Marion County and municipalities located within Marion County, to fund necessary transportation improvements in Marion County in accordance with the adopted local government comprehensive plan. Marion County Health Department Fund Established pursuant to the provisions of Section , Florida Statutes, to account for the proceeds of a special ad valorem tax levy established by the Board, collected by the Tax Collector and distributed directly to the Marion County Health Unit, where they are used to subsidize operations. Criminal Justice Court Costs Fund Created pursuant to the provisions of Section , Florida Statutes, to account for the Revenue of additional court costs and surcharges. The Board of County Commissioners may adopt by Ordinance an additional court cost, not to exceed $65. Authorized uses of the amount collected include payments to be allocated to fund court innovations, legal aid, law library and juvenile programs. Law Enforcement Trust Fund Created pursuant to the provisions of Section , Florida Statutes, to account for the net proceeds from the sale or conversion of forfeited properties. Expenditures payable from this fund are legally restricted to nonrecurring obligations of the Sheriff s office, including equipment purchases. Although legally entitled as a trust fund, this fund is more properly accounted for as a special revenue fund due to the nature of the transactions recorded therein. Sheriff Educational Fund Created to account for the revenues generated by the imposition by the Board of an additional $2 per case for court cost, assessed against every person convicted for violation of a state penal or criminal statute, municipal or county ordinance. Pursuant to Section , Florida Statues, monies received are required to be expended for criminal justice education and training of law enforcement officers, corrections officers and support personnel. 911 Management Fund Created in accordance with the provisions of the Florida Emergency Telephone Act (Sections and , Florida Statutes) to account for the Enhanced 911 (E911) fees imposed and collected from local telephone exchange customers and subscribers of wireless telephone services. 911 service directs 911 calls to the appropriate public safety answering point and provides for automatic number and location identification. The E911 Board may adjust the allocation percentages or adjust the amount of the fee, or both, if necessary, to ensure full cost recovery or prevent over recovery of costs incurred in the provision of E911. Expenditures are restricted to the establishment and maintenance of an enhanced emergency telephone number 911 system or enhanced 911 service. Building Department Fund Created pursuant to the provisions of Section , Florida Statutes, and Ordinance to account for revenues generated by building permit fees levied by the Board by resolution. Fees generated are used to fund costs of the building permitting activities and inspections. Tourist Development Tax Created pursuant to the provisions of Chapter , Florida Statutes, and Ordinance to account for the two percent Tourist Development Tax. The tax is collected by the Marion County Tax Collector and transmitted monthly to Marion County. The tax is used to fund the Marion County Tourist Development Plan. 89

91 NON-MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS - Continued Parks and Recreation Fees Fund Created in accordance with the provisions of the Marion County Code of Ordinances (Chapter 14) and Ordinance 94-20, to account for user fees generated by the parks and recreation department. The Board shall by resolution, adopt fees for use of any or all parks and any improvements or facilities therein. These funds are used for parks and recreation capital. Local Housing Assistance Trust Fund The Local Housing Assistance Trust Fund was created pursuant to the provisions of Section , Florida Statutes, and Ordinance to account for the local housing distribution monies received from the State of Florida in connection with the State Housing Initiative Partnership (SHIP) program. Authorized expenditures from the Local Housing Assistance Trust Fund are limited to the administration and implementation of the local housing assistance program. Medical Examiner Established by an interlocal agreement between Marion, Citrus, Hernando, Sumter and Lake Counties pursuant to the provisions of Chapter 406, Florida Statutes, for the joint operation of the District Medical Examiner s Office. In accordance with the agreement, Marion County serves as the Administrative Coordinator and is responsible for managing all funds associated with this agreement. Impact Fee Ordinance Trust Fund District 1 Established to account for the amount of transportation impact fees levied by the Board and collected pursuant to Marion County Ordinance Number Amounts are collected for four separate districts and are deposited and accounted for separately by District. The revenues generated are to be used for capital improvements of roads on the County s major road network system, not for maintenance or operations, within the district. Impact Fee Ordinance Trust Fund District 2 Established to account for the amount of transportation impact fees levied by the Board and collected pursuant to Marion County Ordinance Number Amounts are collected for four separate districts and are deposited and accounted for separately by District. The revenues generated are to be used for capital improvements of roads on the County s major road network system, not for maintenance or operations, within the district. Impact Fee Ordinance Trust Fund District 3 Established to account for the amount of transportation impact fees levied by the Board and collected pursuant to Marion County Ordinance Number Amounts are collected for four separate districts and are deposited and accounted for separately by District. The revenues generated are to be used for capital improvements of roads on the County s major road network system, not for maintenance or operations, within the district. Impact Fee Ordinance Trust Fund District 4 Established to account for the amount of transportation impact fees levied by the Board and collected pursuant to Marion County Ordinance Number Amounts are collected for four separate districts and are deposited and accounted for separately by District. The revenues generated are to be used for capital improvements of roads on the County s major road network system, not for maintenance or operations, within the district. Rainbow Lakes Estates MSD Fund Created pursuant to the provisions of Section , Florida Statutes, and the provisions of the Marion County Code of Ordinances (Article XI, Chapter 12) to account for the MSTU for Road Improvements, and to account for the provision of municipal type services to a limited geographic area encompassing portions of both Marion and Levy Counties. Funding is provided primarily through the levy and collection of ad valorem taxes by the Board as governing body of this multi-county taxing district. 90

92 NON-MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Continued Rainbow Lakes Estates Fire Protection MSBU Created in accordance with the provisions of the Marion County Code of Ordinances (Article XII, Chapter 12) to account for the proceeds of special assessments levied by the Board on property located in the Rainbow Lakes Estates area and collected by the Tax Collector are accounted for in this fund. The purpose is to provide fire protection within the Rainbow Lakes Estates area. Marion Oaks MSTU Fund The Marion Oaks MSTU fund was created pursuant to the provisions of Section , Florida Statutes, to account for the costs of providing law enforcement as well as the construction, maintenance, and operation of community resource facilities within the Marion Oaks development. Revenues are generated through a levy by the Board of special assessments upon properties located exclusively within the Marion Oaks area. MSTU/MSBU Road Improvements Rainbow Lakes Estates MSTU for Road Improvements Fund The proceeds of special assessments levied by the Board on property located in the Rainbow Lakes Estates area and collected by the Tax Collector are accounted for in this fund. The purpose is to provide road improvements within the Rainbow Lakes Estates area. Silver Springs Shores MSTU for Road Improvements Fund The costs of providing stabilization and maintenance of roads within this subdivision are accounted for in this fund. The primary source of funding for these services is ad valorem taxes. Lake Tropicana MSTU for Road Improvements Fund The costs of providing stabilization and maintenance of roads within this subdivision are accounted for in this fund. The primary source of funding for these services is ad valorem taxes. Golden Hills MSTU for Road Improvements Fund Costs of road improvements made within the Golden Hills subdivision, and funded by a special perparcel assessment levied by the Board and collected by the Tax Collector and accounted for in this fund. Kingsland Estates/Ocala Waterway MSBU for Road Maintenance Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for road maintenance in the covered area. Kingsland Whispering Pines/Forrest Glenn MSBU for Road Maintenance Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for road maintenance in the covered area. Silver Spring Acres MSBU for Road Maintenance Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for road maintenance in the covered area. Ocala Waterway Estates MSBU for Road Maintenance Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for road maintenance in the covered area. 91

93 NON-MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Continued MSTU/MSBU Road Improvements - continued NW 17 th Avenue/Northwood MSBU for Road Maintenance Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for road maintenance in the covered area. Rainbow Park Units 1 & 2 MSBU for Road Maintenance Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for road maintenance in the covered area. Pine Run Estates MSTU for Road Improvements Fund Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for road improvements in the covered area. Woods and Lakes Subdivision MSBU for Road Maintenance The proceeds of special assessments levied by the Board exclusively upon properties located within Woods and Lakes Subdivision and collected by the Tax Collector are accounted for in this fund. The purpose for which the funds so derived may legally be expended is generally limited to the provision of road improvements and maintenance. Marion Oaks MSTU for Road Improvements Fund Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for road improvements in the covered area. Silver Springs Shores MSTU Fund Created by the Board pursuant to Section , Florida Statutes, and used to account for street lighting, cultural and recreational services provided to this commercial and residential community. The primary source of revenue for this municipal service taxing unit is ad valorem taxes levied solely within the geographic boundaries of the taxing unit. MSTU/MSBU for Recreation Fund Rainbow Lakes Estates Community Recreational Facility MSBU The proceeds of special assessments levied by the Board on property located in the Rainbow Lakes Estates area and collected by the Tax Collector are accounted for in this fund. Per-parcel assessments levied within the community are the primary source of funding for these services. Hills of Ocala MSTU for Recreation Fund Used to account for the costs of recreation and related services provided to this community located in Southwest Marion County. Per-parcel assessments levied within the community are the primary source of funding for these services. MSTU for Street Lighting Indian Meadows MSTU for Street Lighting Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for street lighting. 92

94 NON-MAJOR GOVERNMENTAL FUNDS MSTU for Street Lighting - continued SPECIAL REVENUE FUNDS Continued Ocala Heights MSTU for Street Lighting Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for street lighting. Bahia Oaks MSTU for Street Lighting Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for street lighting. Boardman MSTU for Street Lighting Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for street lighting. Doublegate MSTU for General Services Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for municipal services in the covered area. Hickory Hills MSTU for Street Lighting Services Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for street lighting. Raven Hill MSTU for General Services Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for municipal services in the covered area. Churchill Subdivision MSTU for Street Lighting Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for street lighting in the covered area. Little Lake Weir-Edgewater Estates for Street Lighting Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for street lighting in the covered area. Rainbow s End MSTU for General Municipal Services Fund Created to account for a wide variety of authorized expenditures including, but not limited to, road improvements and street lighting. Revenues to fund said expenditures are generated through the levy of a special per-parcel assessment by the Board which is collected by the Tax Collector as a part of the tax roll. Marion Oaks MSTU for General Services Fund The proceeds of special assessments levied by the Board exclusively on the properties within the boundaries established and collected by the Tax Collector are accounted for by this fund. The assessments collected will provide for road repairs, mowing and street lighting. 93

95 NON-MAJOR GOVERNMENTAL FUNDS MSTU for Street Lighting - continued SPECIAL REVENUE FUNDS Continued Citrus Park MSTU Fund Created to account for the proceeds of a special per-parcel assessment levied by the Board on the Citrus Park Subdivision. The assessment will be used to provide municipal services in the covered area and will be collected by the Tax Collector via the tax roll. Bolder Hill MSTU for Street Lighting Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for street lighting in the covered area. Fire Rescue Impact Fees Fund Established to account for the impact fees levied by the Board and collected pursuant to Marion County Ordinance Number 08-19, restricted for the costs required to finance fire rescue facility improvements necessitated by new development in the county. Emergency Medical Services Fund Established pursuant to Ordinance to account for the ad valorem taxes in the unincorporated areas of Marion County and within the municipal boundaries of the City of Belleview, the City of Dunnellon, City of McIntosh, and Town of Reddick. To account for costs to acquire, construct, operate, maintain, equip, extend, enlarge or improve capital projects, for the purpose of providing emergency medical services to the citizens of Marion County. Stormwater Program Established pursuant to Ordinance No to account for the special per-parcel assessment levied by the Board within the designated service area. Assessments are collected by the Tax Collector, and will provide for the establishment and operation of the Stormwater Program throughout the service area. MSTU for General Services Tompkins and Georges Addition to Dunnellon MSTU Fund Used to account for the special per-parcel assessment levied by the Board on property located in the Tompkins and Georges addition to Dunnellon Subdivision and collected by the Tax Collector as part of the tax roll. Funds derived are to be used for the provision of general municipal services. Country Estates Buffington Addition MSTU Fund The costs of general municipal services provided in the Country Estates Buffington Addition Subdivision are funded by a special per-parcel assessment levied by the Board and collected by the Tax Collector are accounted for in this fund. Wineberry MSTU for General Services Fund Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for municipal services in the covered area. Golden Hills MSTU for General Services Fund Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for municipal services in the covered area. 94

96 NON-MAJOR GOVERNMENTAL FUNDS MSTU for General Services - continued SPECIAL REVENUE FUNDS Continued Delcrest MSTU for General Services Fund Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for municipal services in the covered area. Bellaire MSTU for Services Fund Established to account for the special per-parcel assessment levied by the Board exclusively on the properties within the boundaries established. Assessments are collected by the Tax Collector and will provide for municipal services in the covered area. Clerk of the Circuit Court Trust Fund This fund reflects the activities of the Office of the Clerk of Circuit Court Trust Funds. Services provided are in accordance with provisions of the Florida Statutes for Records Modernization. DEBT SERVICE FUNDS Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest. Debt Service funds are also used to report resources if legally mandated and financial resources that are being accumulated for principal and interest maturing in the future. The County has the following Debt Service Funds: Public Improvement Debt Service Fund Created pursuant to the resolutions authorizing issuance of the Public Improvement Revenue Bonds to account for the periodic principal and interest payments on the bonds. As specified in the bond resolution, the primary source of revenue used is the local government half-cent sales tax. Parks and Land Acquisition Debt Service Fund Created pursuant to the provisions of resolutions authorizing the issuance of Limited Ad Valorem Tax Refunding Bonds, Series 1994 and As specified in the resolutions and approved by a referendum vote on November 8, 1988, the primary source of revenue to be used for the repayment of the bonds is a levy of ad valorem (property) taxes on all taxable property within the County at a rate not to exceed one-half of 1 mill (rate per $1,000 of taxable value) in any year. Public Improvement Transportation Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Public Improvement Revenue Bonds. Revenue used to fund the debt service payments is generated through the Second local option fuel tax and secured by Sales Tax. Special Assessment Bonds, Series 2004C Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2004C. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Special Assessment Bonds, Series 2005A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2005A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. 95

97 NON-MAJOR GOVERNMENTAL FUNDS DEBT SERVICE FUNDS Continued Special Assessment Bonds, Series 2006A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2006A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Special Assessment Bonds, Series 2007A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2007A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Special Assessment Bonds, Series 2007B Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2007B. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Special Assessment Bonds, Series 2008A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2008A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Special Assessment Bonds, Series 2008B Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2008B. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Special Assessment Bonds, Series 2009A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2009A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Series 2010A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2010A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Series 2011A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2011A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Series 2012A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2012A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. Series 2013A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2013A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. 96

98 NON-MAJOR GOVERNMENTAL FUNDS DEBT SERVICE FUNDS Continued Series 2014A Debt Service Fund Created to account for payment of the periodic principal and interest payments due on the Special Assessment Bonds, Series 2014A. Revenue used to fund the debt service payments is generated through the levy of special assessments against the benefited properties. CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital outlay. Capital Project funds exclude capital-related outflows financed by proprietary fund or for assets held in trust for individuals, private organizations, or other governments. The County has the following Capital Projects Funds: The Parks Capital Projects Fund This fund accounts for bond proceeds and grant revenues to be used for future acquisitions of parks and environmentally sensitive lands. CIP Capital Projects Fund This fund accounts for the capital expenditures of various infrastructure related projects. Surtax Capital Projects Fund This fund is used to account for proceeds from the one percent infrastructure surtax and related expenditures. SELP Capital Projects Fund Created to account for the fee revenues to be used for capital expenditures at the Southeastern Livestock Pavilion. Special Assessment Bonds, Series 2011A Capital Projects Fund Created to account for payment of the Special Assessment Bonds, Series 2011A issued to provide funds for the construction of road improvements within the benefited boundaries. Special Assessment Bonds, Series 2012A Capital Projects Fund Created to account for payment of the Special Assessment Bonds, Series 2012A issued to provide funds for the construction of road improvements within the benefited boundaries. Special Assessment Bonds, Series 2013A Capital Projects Fund Created to account for payment of the Special Assessment Bonds, Series 2013A issued to provide funds for the construction of road improvements within the benefited boundaries. Special Assessment Bonds, Series 2014A Capital Projects Fund Created to account for payment of the Special Assessment Bonds, Series 2014A issued to provide funds for the construction of road improvements within the benefited boundaries. The bonds for this capital project were issued in fiscal year

99 COMBINING BALANCE SHEET ALL NONMAJOR GOVERNMENTAL FUNDS September 30, 2014 Total Nonmajor Special Revenue Funds Total Nonmajor Debt Service Funds Total Nonmajor Capital Projects Funds Total Nonmajor Governmental Funds ASSETS Cash and Cash Equivalents $ 40,903,050 $ 7,912,558 $ 5,563,854 $ 54,379,462 Investments 14,525, ,525,986 Accounts Receivable 1,079, ,079,681 Accrued Interest Receivable 32, ,642 Special Assessments Receivable - 10,959,233-10,959,233 Due from Other Funds 253,900 9,835 25, ,212 Due from Other Governments 1,016, ,403-1,478,864 Inventories 906, ,340 Prepaid Items 32, ,248 Total Assets $ 58,750,308 $ 19,344,029 $ 5,589,331 $ 83,683,668 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts Payable $ 1,346,829 $ - $ 428,021 $ 1,774,850 Contracts Payable 185, , ,033 Accrued Liabilities 109, ,683 Due to Other Funds Due to Other Governments 90,167-5,212 95,379 Deposits 258, ,360 Total Liabilities 1,991, ,391 2,524,575 Deferred Inflows of Resources: Deferred Assessments - 10,959,233-10,959,233 Unavailable Grant Revenues 1,062, ,062,809 Total Deferred Inflows of Resources 1,062,809 10,959,233-12,022,042 Fund Balances: Nonspendable Inventories 906, ,340 Prepaids 32, ,248 Restricted for Court Innovations 38, ,728 Records Modernization Tech 795, ,900 Debt Service Reserve - 7,146,861-7,146,861 Fire & Rescue 3,875, ,875,357 Infrastructure , ,628 Law Enforcement 3,498, ,498,004 Parks & Recreation 2,477, ,646 2,939,484 Public Safety 3,256, ,256,782 Resource Conservation 12,131, ,131,020 Road Construction 19,081,374-2,290,573 21,371,947 Social Services 1,446, ,446,366 Tourism 663, ,338 Transportation Maintenance 4,055, ,055,962 Committed to: Airport 463, ,353 Parks and Recreation 2,973, ,973,705 Assigned to: Debt Service - 1,237,935-1,237,935 Infrastructure - - 1,463,913 1,463,913 Parks and Recreation ,051 55,051 Road Construction Total Fund Balances 55,696,315 8,384,796 5,055,940 69,137,051 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 58,750,308 $ 19,344,029 $ 5,589,331 $ 83,683,668 98

100 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES ALL NONMAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2014 Total Nonmajor Special Revenue Funds Total Nonmajor Debt Service Funds Total Nonmajor Capital Projects Funds Total Nonmajor Governmental Funds REVENUES Taxes $ 16,958,720 $ 8,090,350 $ - $ 25,049,070 Special Assessments 8,219,771 2,372,340 1,376,024 11,968,135 Impact Fees 37, ,365 Permits and Fees 2,706, ,706,797 Intergovernmental Revenues 2,652, ,652,063 Charges for Services 4,334,796-54,320 4,389,116 Judgments and Fines 1,199, ,199,992 Court-Related Revenues 624, ,542 Investment Income 139,595 4,812 4, ,268 Miscellaneous Revenues 295, ,056 Total Revenues 37,168,697 10,467,502 1,435,205 49,071,404 EXPENDITURES Current: General Government 1,047, ,047,228 Public Safety 6,684, ,684,747 Physical Environment 3,504, ,504,659 Transportation 11,224,880-36,101 11,260,981 Economic Environment 1,772, ,772,517 Human Services 1,673, ,673,563 Culture/Recreation 1,259, ,260,423 Court-Related 1,693, ,693,733 Debt Service: Principal Retirement - 8,418,396-8,418,396 Interest and Fiscal Charges - 2,798,405 8,820 2,807,225 Capital Outlay - - 2,992,419 2,992,419 Total Expenditures 28,861,284 11,216,801 3,037,806 43,115,891 Excess (Deficiency) of Revenues Over (Under) Expenditures 8,307,413 (749,299) (1,602,601) 5,955,513 OTHER FINANCING SOURCES (USES) Transfers In 2,019, ,671-2,275,688 Transfers (Out) (11,136,572) - (261,571) (11,398,143) Issuance of Notes/Bonds Payable - 14,812 2,914,475 2,929,287 Total Other Financing Sources and (Uses) (9,117,555) 271,483 2,652,904 (6,193,168) Net Change in Fund Balances (810,142) (477,816) 1,050,303 (237,655) Fund Balances - Beginning 56,506,457 8,862,612 4,005,637 69,374,706 Fund Balances - Ending $ 55,696,315 $ 8,384,796 $ 5,055,940 $ 69,137,051 99

101 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS September 30, 2014 Fines and Forfeitures 80% Gas Tax Construction 20% Gas Tax Construction Sidewalk Construction Dunnellon Airport Alcohol and Drug Abuse Trust Fund ASSETS Cash and Cash Equivalents $ 2,746,877 $ 4,540,326 $ 1,642,935 $ 6,885 $ 478,120 $ 120,936 Investments Accounts Receivable Accrued Interest Receivable Due from Other Funds 253, Due from Other Governments 77, ,910 79,727-5,187 5,913 Inventories ,974-55,366 - Prepaid Items Total Assets $ 3,077,825 $ 4,859,236 $ 2,573,636 $ 6,885 $ 538,673 $ 126,849 LIABILITIES Accounts Payable $ 76,001 $ 766,513 $ 27,661 $ - $ 5,756 $ 2,180 Contracts Payable - 162, Accrued Liabilities ,945 - Due to Other Funds Due to Other Governments 1, ,186 - Deposits ,067 - Total Liabilities 77, ,022 27,661-19,954 2,180 DEFERRED INFLOWS OF RESOURCES Unavailable Grant Revenues Total Deferred Inflows of Resources FUND BALANCES Nonspendable: Inventories ,974-55,366 - Prepaids Restricted for: Court Innovations Records Modernization Tech Fire & Rescue Law Enforcement 3,000, Parks & Recreation Public Safety Resource Conservation Road Construction - 3,930, Social Services ,669 Tourism Transportation Maintenance - - 1,695,001 6, Committed to: Airport ,353 - Parks & Recreation Total Fund Balances 3,000,634 3,930,214 2,545,975 6, , ,669 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 3,077,825 $ 4,859,236 $ 2,573,636 $ 6,885 $ 538,673 $ 126,849 Continued 100

102 2nd Local Option Fuel Tax Marion County Health Department Criminal Justice Court Costs Law Enforcement Trust Fund Sheriff's Educational 911 Management Fund Building Department Fund Tourist Development Fund $ 2,695,470 $ 55,258 $ 28,398 $ 235,712 $ 254,660 $ 2,938,125 $ 3,197,132 $ 662, ,047 1,907 30,646-7, ,763-76, ,833 $ 2,918,517 $ 57,165 $ 59,044 $ 235,712 $ 261,721 $ 3,059,888 $ 3,197,132 $ 740,787 $ - $ - $ 7,663 $ - $ - $ 39,946 $ 8,778 $ 66, , ,443 32,339 6, ,626-7, , ,022-49,626-20, , ,427 75, , , ,008, , , ,943, ,868, , , ,868,891 57,165 38, , ,721 3,008,941 2,943, ,171 $ 2,918,517 $ 57,165 $ 59,044 $ 235,712 $ 261,721 $ 3,059,888 $ 3,197,132 $ 740,

103 COMBINING BALANCE SHEET - Continued NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS September 30, 2014 Parks and Recreation Fees Fund Local Housing Assistance Trust Medical Examiner Impact Fee Ordinance Trust Fund - District 1 Impact Fee Ordinance Trust Fund - District 2 ASSETS Cash and Cash Equivalents $ 3,000,480 $ 1,288,930 $ 314,971 $ 93,691 $ 85,744 Investments ,557,523 Accounts Receivable 2,025 1,062, Accrued Interest Receivable ,501 Due from Other Funds Due from Other Governments - - 1, Inventories Prepaid Items Total Assets $ 3,002,505 $ 2,351,739 $ 316,607 $ 93,691 $ 1,646,768 LIABILITIES Accounts Payable $ 11,941 $ 486 $ 3,530 $ - $ - Contracts Payable Accrued Liabilities 7, Due to Other Funds Due to Other Governments 5, Deposits 3,226 23, Total Liabilities 28,800 24,398 3, DEFERRED INFLOWS OF RESOURCES Unavailable Grant Revenues - 1,062, Total Deferred Inflows of Resources - 1,062, FUND BALANCES Nonspendable: Inventories Prepaids Restricted for: Court Innovations Records Modernization Tech Fire & Rescue Law Enforcement Parks & Recreation Public Safety , Resource Conservation Road Construction ,691 1,646,768 Social Services - 1,264, Tourism Transportation Maintenance Committed to: Airport Parks & Recreation 2,973, Total Fund Balances 2,973,705 1,264, ,077 93,691 1,646,768 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 3,002,505 $ 2,351,739 $ 316,607 $ 93,691 $ 1,646,768 Continued 102

104 Impact Fee Ordinance Trust Fund - District 3 Impact Fee Ordinance Trust Fund - District 4 Rainbow Lakes Estates MSD Rainbow Lakes Estates Fire Protection MSBU Marion Oaks MSTU MSTU/MSBU for Road Improvements Silver Springs Shores MSTU $ 457,688 $ 489,294 $ 1,208,339 $ 453,584 $ 1,846,165 $ 5,848,602 $ 505,033-3,799, , , ,037 17, $ 457,688 $ 4,296,875 $ 1,223,200 $ 454,140 $ 1,847,300 $ 5,866,159 $ 505,447 $ - $ 36,437 $ 5,598 $ 2,460 $ 13,618 $ 42,475 $ 3, , ,144-7,027-5, ,495-2,000-36,437 19,036 2,460 28,273 42,475 11, , ,819, , ,688 4,260, ,823, ,204, ,688 4,260,438 1,204, ,680 1,819,027 5,823, ,062 $ 457,688 $ 4,296,875 $ 1,223,200 $ 454,140 $ 1,847,300 $ 5,866,159 $ 505,

105 COMBINING BALANCE SHEET - Continued NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS September 30, 2014 MSTU/MSBU for Recreation MSTU for Street Lighting Fire Rescue Impact Fees Emergency Medical Services Stormwater Program ASSETS Cash and Cash Equivalents $ 166,823 $ 1,102,732 $ 367,700 $ 51,559 $ 3,154,161 Investments ,169,418 Accounts Receivable Accrued Interest Receivable ,605 Due from Other Funds Due from Other Governments 60 7, ,177 Inventories Prepaid Items Total Assets $ 166,898 $ 1,110,163 $ 367,700 $ 51,559 $ 12,384,361 LIABILITIES Accounts Payable $ 1,671 $ 11,634 $ 4,200 $ 323 $ 205,118 Contracts Payable ,213 Accrued Liabilities - 7, ,638 Due to Other Funds Due to Other Governments ,372 Deposits Total Liabilities 1,921 19,635 4, ,341 DEFERRED INFLOWS OF RESOURCES Unavailable Grant Revenues Total Deferred Inflows of Resources FUND BALANCES Nonspendable: Inventories Prepaids Restricted for: Court Innovations Records Modernization Tech Fire & Rescue ,500 51,236 - Law Enforcement Parks & Recreation 164, Public Safety Resource Conservation ,131,020 Road Construction Social Services Tourism Transportation Maintenance - 1,090, Committed to: - Airport Parks & Recreation Total Fund Balances 164,977 1,090, ,500 51,236 12,131,020 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 166,898 $ 1,110,163 $ 367,700 $ 51,559 $ 12,384,361 Continued 104

106 MSTU for General Services Clerk of the Circuit Court Trust Fund Total Nonmajor Special Revenue Funds $ 60,038 $ 804,246 $ 40,903, ,525, ,079, , , ,016, ,340-30,124 32,248 $ 60,068 $ 834,370 $ 58,750,308 $ 337 $ 1,879 $ 1,346, ,974-6, , , , ,346 1,991, ,062, ,062, ,340-30,124 32, , , , ,875, ,498, ,477, ,256, ,131, ,081, ,446, ,338 59,384-4,055, , ,973,705 59, ,024 55,696,315 $ 60,068 $ 834,370 $ 58,750,

107 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS For the Year Ended September 30, 2014 Fines and Forfeitures 80% Gas Tax Construction 20% Gas Tax Construction Sidewalk Construction Dunnellon Airport Alcohol and Drug Abuse Trust Fund REVENUES Taxes $ 7,138,778 $ 3,439,811 $ 859,953 $ - $ - $ - Special Assessments Impact Fees Permits and Fees , Intergovernmental Revenues ,999 - Charges for Services 169, ,166 - Judgments and Fines 458, Court-Related Revenues 125, ,897 Investment Income 7,771 4,234 1, Miscellaneous Revenues 3, ,193 - Total Revenues 7,903,889 3,444, ,885 6, ,943 66,088 EXPENDITURES Current: General Government Public Safety Physical Environment Transportation - 3,821, , ,398 - Economic Environment Human Services Culture and Recreation Court-Related 534, ,810 Total Expenditures 534,098 3,821, , ,398 58,810 Excess (Deficiency) of Revenues Over (Under) Expenditures 7,369,791 (377,207) 40,082 6,885 (21,455) 7,278 OTHER FINANCING SOURCES (USES) Transfers In 357, Transfers (Out) (9,767,375) Total Other Financing Sources and (Uses) (9,409,961) Net Change in Fund Balances (2,040,170) (377,207) 40,082 6,885 (21,455) 7,278 Fund Balances - Beginning 5,040,804 4,307,421 2,505, , ,391 Fund Balances - Ending $ 3,000,634 $ 3,930,214 $ 2,545,975 $ 6,885 $ 518,719 $ 124,669 Continued 106

108 2nd Local Option Fuel Tax Marion County Health Department Criminal Justice Court Costs Law Enforcement Trust Fund Sheriff's Educational 911 Management Fund Building Department Fund Tourist Development Fund $ 1,604,395 $ 1,616,056 $ - $ - $ - $ - $ 137,487 $ 1,047, ,555, ,473, , ,015-83, , ,124 3,414 1, ,092 41,600 1,606,820 1,616, , ,582 84,156 1,478,864 2,703,949 1,090, ,563 1,495,693 2,053, , ,395,050-1,586,287 87, , ,275 1,586, ,398-2,563 1,495,693 2,053,701 1,395,050 1,040,545 30,048 (56,296) 394,582 81,593 (16,829) 650,248 (304,902) , (459,107) - (194,169) (459,107) - (113,580) - - 1,040,545 30,048 (56,296) (64,525) 81,593 (130,409) 650,248 (304,902) 1,828,346 27,117 95, , ,128 3,139,350 2,293, ,073 $ 2,868,891 $ 57,165 $ 38,728 $ 235,712 $ 261,721 $ 3,008,941 $ 2,943,705 $ 665,

109 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - Continued NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS For the Year Ended September 30, 2014 Parks And Recreation Fees Fund Local Housing Assistance Trust Medical Examiner Impact Fee Ordinance Trust Fund - District 1 Impact Fee Ordinance Trust Fund - District 2 REVENUES Taxes $ - $ - $ - $ - $ - Special Assessments Impact Fees ,212 1,696 Permits and Fees Intergovernmental Revenues - 469,371 1,847, Charges for Services 1,110, , Judgments and Fines Court-Related Revenues Investment Income 3,434 1, ,093 Miscellaneous Revenues , Total Revenues 1,114, ,922 2,157,434 2,342 9,789 EXPENDITURES Current: General Government Public Safety - - 2,939, Physical Environment Transportation ,415 Economic Environment - 377, Human Services Culture and Recreation 701, Court-Related Total Expenditures 701, ,467 2,939, ,415 Excess (Deficiency) of Revenues Over (Under) Expenditures 412, ,455 (781,574) 2,342 (369,626) OTHER FINANCING SOURCES (USES) Transfers In , Transfers (Out) Total Other Financing Sources and (Uses) , Net Change in Fund Balances 412, ,455 78,754 2,342 (369,626) Fund Balances - Beginning 2,561,479 1,028, ,323 91,349 2,016,394 Fund Balances - Ending $ 2,973,705 $ 1,264,532 $ 313,077 $ 93,691 $ 1,646,768 Continued 108

110 Impact Fee Ordinance Trust Fund - District 3 Impact Fee Ordinance Trust Fund - District 4 Rainbow Lakes Estates MSD Rainbow Lakes Estates Fire Protection MSBU Marion Oaks MSTU MSTU/MSBU for Road Improvements Silver Springs Shores MSTU $ - $ - $ 200,615 $ - $ 369,810 $ - $ 487, ,523-3,510,533-13,764 8, , ,097 3, ,979 10, ,264 1,840 50,740-14,180 14,356 32, , , ,537 3,520, , , , , , , , ,707,906 38, , , , , , ,032 2,707, ,188 (734,250) (278,193) (141,306) 76,038 (216,495) 812,650 (10,598) , (715,921) (715,921) ,921 - (734,250) (278,193) (857,227) 76,038 (216,495) 1,528,571 (10,598) 1,191,938 4,538,631 2,061, ,642 2,035,522 4,295, ,660 $ 457,688 $ 4,260,438 $ 1,204,164 $ 451,680 $ 1,819,027 $ 5,823,684 $ 494,

111 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - Continued NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS For the Year Ended September 30, 2014 MSTU/MSBU for Recreation MSTU for Street Lighting Fire Rescue Impact Fees Emergency Medical Services Stormwater Program REVENUES Taxes $ 57,049 $ - $ - $ - $ - Special Assessments - 946, ,543,657 Impact Fees , Permits and Fees Intergovernmental Revenues ,107 Charges for Services ,325 Judgments and Fines Court-Related Revenues Investment Income 275 2, ,776 Miscellaneous Revenues 3, ,028 7,697 Total Revenues 60, ,678 11,443 10,286 3,787,562 EXPENDITURES Current: General Government Public Safety ,852 74,938 - Physical Environment ,504,659 Transportation - 758, Economic Environment Human Services Culture and Recreation 83, Court-Related Total Expenditures 83, ,922 16,852 74,938 3,504,659 Excess (Deficiency) of Revenues Over (Under) Expenditures (23,095) 190,756 (5,409) (64,652) 282,903 OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) Total Other Financing Sources and (Uses) Net Change in Fund Balances (23,095) 190,756 (5,409) (64,652) 282,903 Fund Balances - Beginning 188, , , ,888 11,848,117 Fund Balances - Ending $ 164,977 $ 1,090,528 $ 363,500 $ 51,236 $ 12,131,020 Continued 110

112 MSTU for General Services Clerk of the Circuit Court Trust Fund Total Nonmajor Special Revenue Funds $ - $ - $ 16,958,720 43,102-8,219, , ,706, ,652, ,416 4,334, ,826 1,199, , , ,056 43, ,161 37,168,697 26, ,555 1,047, ,684, ,504, ,224, ,772, ,673, ,259, ,703 1,693,733 26, ,258 28,861,284 16,975 57,903 8,307,413-4,765 2,019, (11,136,572) - 4,765 (9,117,555) 16,975 62,668 (810,142) 42, ,356 56,506,457 $ 59,384 $ 826,024 $ 55,696,

113 BUDGETARY COMPARISON SCHEDULE FINES AND FORFEITURES FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 7,065,851 $ 7,138,778 $ 72,927 Intergovernmental Revenues 50,798 - (50,798) Charges for Services 173, ,788 (4,062) Judgments and Fines 405, ,303 52,653 Court-Related Revenues 114, ,681 11,681 Investment Income 16,720 7,771 (8,949) Miscellaneous Revenues 3,174 3, Total Revenues 7,830,043 7,903,889 73,846 EXPENDITURES Current: Public Safety Fine & Forfeiture Crime Prevention 793, ,611 Court-Related Fines & Forfeitures 2,249, ,098 1,715,691 Total Expenditures 3,043, ,098 2,509,302 Excess (Deficiency) of Revenues Over (Under) Expenditures 4,786,643 7,369,791 2,583,148 OTHER FINANCING SOURCES (USES) Transfers In 357, ,414 - Transfers (Out) (10,188,262) (9,767,375) 420,887 Total Other Financing Sources and (Uses) (9,830,848) (9,409,961) 420,887 Net Change in Fund Balance (5,044,205) (2,040,170) 3,004,035 Fund Balance - Beginning 5,044,205 5,040,804 (3,401) Fund Balance - Ending $ - $ 3,000,634 $ 3,000,

114 BUDGETARY COMPARISON SCHEDULE 80% GAS TAX CONSTRUCTION FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 3,205,382 $ 3,439,811 $ 234,429 Investment Income 2,850 4,234 1,384 Miscellaneous Revenues Total Revenues 3,208,232 3,444, ,294 EXPENDITURES Current: Transportation 7,842,009 3,821,733 4,020,276 Total Expenditures 7,842,009 3,821,733 4,020,276 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,633,777) (377,207) 4,256,570 Net Change in Fund Balance (4,633,777) (377,207) 4,256,570 Fund Balance - Beginning 4,633,777 4,307,421 (326,356) Fund Balance - Ending $ - $ 3,930,214 $ 3,930,

115 BUDGETARY COMPARISON SCHEDULE 20% GAS TAX CONSTRUCTION FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 801,346 $ 859,953 $ 58,607 Investment Income 1,710 1, Total Revenues 803, ,885 58,829 EXPENDITURES Current: Transportation 1,155, , ,660 Total Expenditures 1,155, , ,660 Excess (Deficiency) of Revenues Over (Under) Expenditures (352,407) 40, ,489 Net Change in Fund Balance (352,407) 40, ,489 Fund Balance - Beginning 352,407 2,505,893 2,153,486 Fund Balance - Ending $ - $ 2,545,975 $ 2,545,

116 BUDGETARY COMPARISON SCHEDULE SIDEWALK CONSTRUCTION FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Permits and Fees $ - $ 6,885 $ 6,885 Total Revenues - 6,885 6,885 EXPENDITURES Current: Transportation Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures - 6,885 6,885 Net Change in Fund Balance - 6,885 6,885 Fund Balance - Beginning Fund Balance - Ending $ - $ 6,885 $ 6,

117 BUDGETARY COMPARISON SCHEDULE DUNNELLON AIRPORT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 835,337 $ 167,999 $ (667,338) Charges for Services 901, ,166 (266,169) Investment Income (365) Miscellaneous Revenues - 5,193 5,193 Total Revenues 1,737, ,943 (928,679) EXPENDITURES Current: Transportation 2,276, ,398 1,445,850 Total Expenditures 2,276, ,398 1,445,850 Excess (Deficiency) of Revenues Over (Under) Expenditures (538,626) (21,455) 517,171 Net Change in Fund Balance (538,626) (21,455) 517,171 Fund Balance - Beginning 538, ,174 1,548 Fund Balance - Ending $ - $ 518,719 $ 518,

118 BUDGETARY COMPARISON SCHEDULE ALCOHOL AND DRUG ABUSE TRUST FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Court-Related Revenues $ 23,750 $ 65,897 $ 42,147 Investment Income Total Revenues 23,750 66,088 42,338 EXPENDITURES Current: Court-Related 159,984 58, ,174 Total Expenditures 159,984 58, ,174 Excess (Deficiency) of Revenues Over (Under) Expenditures (136,234) 7, ,512 Net Change in Fund Balance (136,234) 7, ,512 Fund Balance - Beginning 136, ,391 (18,843) Fund Balance - Ending $ - $ 124,669 $ 124,

119 BUDGETARY COMPARISON SCHEDULE 2nd LOCAL OPTION FUEL TAX FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 1,177,051 $ 1,604,395 $ 427,344 Investment Income 966 2,425 1,459 Total Revenues 1,178,017 1,606, ,803 EXPENDITURES Current: Transportation 3,172, ,275 2,606,337 Total Expenditures 3,172, ,275 2,606,337 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,994,595) 1,040,545 3,035,140 Net Change in Fund Balance (1,994,595) 1,040,545 3,035,140 Fund Balance - Beginning 1,994,595 1,828,346 (166,249) Fund Balance - Ending $ - $ 2,868,891 $ 2,868,

120 BUDGETARY COMPARISON SCHEDULE MARION COUNTY HEALTH DEPARTMENT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 1,599,815 $ 1,616,056 $ 16,241 Investment Income (301) Total Revenues 1,600,395 1,616,335 15,940 EXPENDITURES Current: Human Services 1,626,387 1,586,287 40,100 Total Expenditures 1,626,387 1,586,287 40,100 Excess (Deficiency) of Revenues Over (Under) Expenditures (25,992) 30,048 56,040 Net Change in Fund Balance (25,992) 30,048 56,040 Fund Balance - Beginning 25,992 27,117 1,125 Fund Balance - Ending $ - $ 57,165 $ 57,

121 BUDGETARY COMPARISON SCHEDULE CRIMINAL JUSTICE COURT COSTS FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Court-Related Revenues $ 330,022 $ 349,015 $ 18,993 Investment Income (227) Total Revenues 330, ,102 18,766 EXPENDITURES Current: General Government 5,513-5,513 Human Services 82,506 87,276 (4,770) Court-Related 323, ,122 5,745 Total Expenditures 411, ,398 6,488 Excess (Deficiency) of Revenues Over (Under) Expenditures (81,550) (56,296) 25,254 Net Change in Fund Balance (81,550) (56,296) 25,254 Fund Balance - Beginning 81,550 95,024 13,474 Fund Balance - Ending $ - $ 38,728 $ 38,

122 BUDGETARY COMPARISON SCHEDULE LAW ENFORCEMENT TRUST FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Judgments and Fines $ 389,567 $ 393,863 $ 4,296 Investment Income (42) Total Revenues 390, ,582 4,254 EXPENDITURES Current: General Government 217, ,558 Total Expenditures 217, ,558 Excess (Deficiency) of Revenues Over (Under) Expenditures 172, , ,812 OTHER FINANCING SOURCES (USES) Transfers (Out) (473,007) (459,107) 13,900 Total Other Financing Sources and (Uses) (473,007) (459,107) 13,900 Net Change in Fund Balance (300,237) (64,525) 235,712 Fund Balance - Beginning 300, ,237 - Fund Balance - Ending $ - $ 235,712 $ 235,

123 BUDGETARY COMPARISON SCHEDULE SHERIFF'S EDUCATIONAL FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Court-Related Revenues $ 83,600 $ 83,859 $ 259 Investment Income Total Revenues 83,885 84, EXPENDITURES Current: Public Safety 130,216 2, ,653 Total Expenditures 130,216 2, ,653 Excess (Deficiency) of Revenues Over (Under) Expenditures (46,331) 81, ,924 Net Change in Fund Balance (46,331) 81, ,924 Fund Balance - Beginning 46, , ,797 Fund Balance - Ending $ - $ 261,721 $ 261,

124 BUDGETARY COMPARISON SCHEDULE 911 MANAGEMENT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Charges for Services $ 1,520,000 $ 1,473,912 $ (46,088) Investment Income 2,850 4,124 1,274 Miscellaneous Revenues Total Revenues 1,522,850 1,478,864 (43,986) EXPENDITURES Current: Public Safety 4,500,188 1,495,693 3,004,495 Total Expenditures 4,500,188 1,495,693 3,004,495 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,977,338) (16,829) 2,960,509 OTHER FINANCING SOURCES (USES) Transfers (In) 80,589 80,589 - Transfers (Out) (194,169) (194,169) - Total Other Financing Sources and (Uses) (113,580) (113,580) - Net Change in Fund Balance (3,090,918) (130,409) 2,960,509 Fund Balance - Beginning 3,090,918 3,139,350 48,432 Fund Balance - Ending $ - $ 3,008,941 $ 3,008,

125 BUDGETARY COMPARISON SCHEDULE BUILDING DEPARTMENT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 91,200 $ 137,487 $ 46,287 Permits and Fees 1,812,600 2,555, ,356 Investment Income 5,035 3,414 (1,621) Miscellaneous Revenues 2,660 7,092 4,432 Total Revenues 1,911,495 2,703, ,454 EXPENDITURES Current: Public Safety 4,040,941 2,053,701 1,987,240 Total Expenditures 4,040,941 2,053,701 1,987,240 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,129,446) 650,248 2,779,694 Net Change in Fund Balance (2,129,446) 650,248 2,779,694 Fund Balance - Beginning 2,129,446 2,293, ,011 Fund Balance - Ending $ - $ 2,943,705 $ 2,943,

126 BUDGETARY COMPARISON SCHEDULE TOURIST DEVELOPMENT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 945,045 $ 1,047,212 $ 102,167 Investment Income 2,850 1,336 (1,514) Miscellaneous Revenues - 41,600 41,600 Total Revenues 947,895 1,090, ,253 EXPENDITURES Current: Economic Environment 1,827,424 1,395, ,374 Total Expenditures 1,827,424 1,395, ,374 Excess (Deficiency) of Revenues Over (Under) Expenditures (879,529) (304,902) 574,627 Net Change in Fund Balance (879,529) (304,902) 574,627 Fund Balance - Beginning 879, ,073 90,544 Fund Balance - Ending $ - $ 665,171 $ 665,

127 BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION FEES FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Charges for Service $ 931,000 $ 1,110,645 $ 179,645 Court-Related Revenues Investment Income 3,800 3,434 (366) Miscellaneous Revenues Total Revenues 934,800 1,114, ,415 EXPENDITURES Current: Culture and Recreation 1,722, ,989 1,020,782 Total Expenditures 1,722, ,989 1,020,782 Excess (Deficiency) of Revenues Over (Under) Expenditures (787,971) 412,226 1,200,197 Net Change in Fund Balance (787,971) 412,226 1,200,197 Fund Balance - Beginning 787,971 2,561,479 1,773,508 Fund Balance - Ending $ - $ 2,973,705 $ 2,973,

128 BUDGETARY COMPARISON SCHEDULE LOCAL HOUSING ASSISTANCE TRUST FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 550,171 $ 469,371 $ (80,800) Investment Income - 1,455 1,455 Miscellaneous Revenues 87, ,096 55,696 Total Revenues 637, ,922 (23,649) EXPENDITURES Current: Economic Environment 637, , ,104 Total Expenditures 637, , ,104 Excess (Deficiency) of Revenues Over (Under) Expenditures - 236, ,455 Net Change in Fund Balance - 236, ,455 Fund Balance - Beginning - 1,028,077 1,028,077 Fund Balance - Ending $ - $ 1,264,532 $ 1,264,

129 BUDGETARY COMPARISON SCHEDULE MEDICAL EXAMINER For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 1,844,056 $ 1,847,586 $ 3,530 Charges for Services 273, ,519 36,037 Investment Income Total Revenues 2,117,538 2,157,434 39,896 EXPENDITURES Current: Public Safety 3,121,351 2,939, ,343 Total Expenditures 3,121,351 2,939, ,343 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,003,813) (781,574) 222,239 OTHER FINANCING SOURCES (USES) Transfers In 860, ,328 - Total Other Financing Sources and (Uses) 860, ,328 - Net Change in Fund Balance (143,485) 78, ,239 Fund Balance - Beginning 143, ,323 90,838 Fund Balance - Ending $ - $ 313,077 $ 313,

130 BUDGETARY COMPARISON SCHEDULE IMPACT FEE ORDINANCE TRUST DISTRICT 1 For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Impact Fees $ 12,350 $ 2,212 $ (10,138) Investment Income (345) Total Revenues 12,825 2,342 (10,483) EXPENDITURES Current: Transportation Impact Fee Trust, District 1 119, ,530 Total Expenditures 119, ,530 Excess (Deficiency) of Revenues Over (Under) Expenditures (106,705) 2, ,047 Net Change in Fund Balance (106,705) 2, ,047 Fund Balance - Beginning 106,705 91,349 (15,356) Fund Balance - Ending $ - $ 93,691 $ 93,

131 BUDGETARY COMPARISON SCHEDULE IMPACT FEE ORDINANCE TRUST DISTRICT 2 For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Impact Fees $ 9,500 $ 1,696 $ (7,804) Investment Income 1,900 8,093 6,193 Total Revenues 11,400 9,789 (1,611) EXPENDITURES Current: Transportation Impact Fee Trust, District 2 1,626, ,415 1,247,320 Total Expenditures 1,626, ,415 1,247,320 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,615,335) (369,626) 1,245,709 Net Change in Fund Balance (1,615,335) (369,626) 1,245,709 Fund Balance - Beginning 1,615,335 2,016, ,059 Fund Balance - Ending $ - $ 1,646,768 $ 1,646,

132 BUDGETARY COMPARISON SCHEDULE IMPACT FEE ORDINANCE TRUST DISTRICT 3 For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Impact Fees $ 3,800 $ 13,764 $ 9,964 Investment Income (358) Total Revenues 4,750 14,356 9,606 EXPENDITURES Current: Transportation Impact Fee Trust, District 3 969, , ,175 Total Expenditures 969, , ,175 Excess (Deficiency) of Revenues Over (Under) Expenditures (965,031) (734,250) 230,781 Net Change in Fund Balance (965,031) (734,250) 230,781 Fund Balance - Beginning 965,031 1,191, ,907 Fund Balance - Ending $ - $ 457,688 $ 457,

133 BUDGETARY COMPARISON SCHEDULE IMPACT FEE ORDINANCE TRUST DISTRICT 4 For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Impact Fees $ 18,050 $ 8,765 $ (9,285) Investment Income 7,600 23,097 15,497 Miscellaneous Revenues Total Revenues 25,650 32,090 6,440 EXPENDITURES Current: Transportation Impact Fee Trust, District 4 5,105, ,283 4,795,650 Total Expenditures 5,105, ,283 4,795,650 Excess (Deficiency) of Revenues Over (Under) Expenditures (5,080,283) (278,193) 4,802,090 Net Change in Fund Balance (5,080,283) (278,193) 4,802,090 Fund Balance - Beginning 5,080,283 4,538,631 (541,652) Fund Balance - Ending $ - $ 4,260,438 $ 4,260,

134 BUDGETARY COMPARISON SCHEDULE RAINBOW LAKES ESTATES MSD FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 197,627 $ 200,615 $ 2,988 Permits and Fees 128, ,956 15,896 Charges for Services 48 4 (44) Investment Income 3,041 3,010 (31) Miscellaneous Revenues 5,320 5,264 (56) Total Revenues 334, ,849 18,753 EXPENDITURES Current: General Government 1,243, , ,270 Transportation 347, , ,951 Total Expenditures 1,591, ,155 1,097,221 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,257,280) (141,306) 1,115,974 OTHER FINANCING (USES) Transfers (Out) (715,921) (715,921) - Total Other Financing (Uses) (715,921) (715,921) - Net Change in Fund Balance (1,973,201) (857,227) 1,115,974 Fund Balance - Beginning 1,973,201 2,061,391 88,190 Fund Balance - Ending $ - $ 1,204,164 $ 1,204,

135 BUDGETARY COMPARISON SCHEDULE RAINBOW LAKES ESTATES FIRE PROTECTION FUND For the Year Ended September 30, 2014 Budget Actual Amounts Variance with Budget - Over (Under) REVENUES Special Assessments $ 179,921 $ 175,523 $ (4,398) Investment Income (45) Miscellaneous Revenues - 1,840 1,840 Total Revenues 180, ,030 (2,603) EXPENDITURES Current: Public Safety 547, , ,108 Total Expenditures 547, , ,108 Excess (Deficiency) of Revenues Over (Under) Expenditures (366,467) 76, ,505 Net Change in Fund Balance (366,467) 76, ,505 Fund Balance - Beginning 366, ,642 9,175 Fund Balance - Ending $ - $ 451,680 $ 451,

136 BUDGETARY COMPARISON SCHEDULE MARION OAKS MSTU FUND For the Year Ended September 30, 2014 Variance with Budget - Over Budget Actual Amounts (Under) REVENUES Taxes $ 362,891 $ 369,810 $ 6,919 Charges for Services Investment Income 3,239 2,979 (260) Miscellaneous Revenues 37,050 50,740 13,690 Total Revenues 403, ,537 20,357 EXPENDITURES Current: General Government 2,450, ,032 1,810,357 Total Expenditures 2,450, ,032 1,810,357 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,047,209) (216,495) 1,830,714 Net Change in Fund Balance (2,047,209) (216,495) 1,830,714 Fund Balance - Beginning 2,047,209 2,035,522 (11,687) Fund Balance - Ending $ - $ 1,819,027 $ 1,819,

137 BUDGETARY COMPARISON SCHEDULE MSTU/MSBU FOR ROAD IMPROVEMENTS SPECIAL ASSESSMENT FUNDS For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Special Assessments $ 3,573,236 $ 3,510,533 $ (62,703) Investment Income 6,071 10,023 3,952 Total Revenues 3,579,307 3,520,556 (58,751) EXPENDITURES Current: Transportation Rainbow Lakes Estates MSTU 1,086,012 12,959 1,073,053 Silver Springs Shores MSTU 2,198,509 1,202, ,909 Lake Tropicana MSTU 260, , Golden Hills MSTU 131,707 17, ,006 Kingsland -Waterway MSBU 260,923 6, ,791 Kingsland -Forrest Glenn MSBU 365,236 5, ,104 Silver Spring Acres MSBU 77,384 48,172 29,212 Ocala Water Way Estates MSBU 105,137 14,322 90,815 NW 17-Northwoods MSBU 9,652 1,436 8,216 Rainbow Park 1, 2 MSBU 508,995 43, ,103 Pine Run Estates MSTU 96,492 24,644 71,848 Woods and Lakes MSTU 436, , ,837 Marion Oaks Road Improvement 2,941, ,326 2,117,370 Total Expenditures 8,478,646 2,707,906 5,770,740 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,899,339) 812,650 5,711,989 OTHER FINANCING SOURCES (USES) Transfers In 715, ,921 - Total Other Financing Sources and (Uses) 715, ,921 - Net Change in Fund Balances (4,183,418) 1,528,571 5,711,989 Fund Balances - Beginning 4,183,418 4,295, ,695 Fund Balances - Ending $ - $ 5,823,684 $ 5,823,

138 BUDGETARY COMPARISON SCHEDULE SILVER SPRINGS SHORES MSTU For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 477,978 $ 487,554 $ 9,576 Charges for Services Investment Income (105) Miscellaneous Revenues 9,785 14,180 4,395 Total Revenues 488, ,590 13,877 EXPENDITURES Current: Transportation 52,000 38,816 13,184 Culture and Recreation 854, , ,603 Total Expenditures 906, , ,787 Excess (Deficiency) of Revenues Over (Under) Expenditures (418,262) (10,598) 407,664 Net Change in Fund Balance (418,262) (10,598) 407,664 Fund Balance - Beginning 418, ,660 86,398 Fund Balance - Ending $ - $ 494,062 $ 494,

139 BUDGETARY COMPARISON SCHEDULE MSTU/MSBU FOR RECREATION SPECIAL ASSESSMENT FUNDS For the Year Ended September 30, 2014 Variance with Budget - Over Budget Actual Amounts (Under) REVENUES Taxes $ 56,019 $ 57,049 $ 1,030 Charges for Services Investment Income (58) Miscellaneous Revenues 2,850 3, Total Revenues 59,202 60,501 1,299 EXPENDITURES Current: Culture and Recreation Rainbow Lakes Recreation Facility 147,433 43, ,357 Hills of Ocala for Recreation 80,277 40,520 39,757 Total Expenditures 227,710 83, ,114 Excess (Deficiency) of Revenues Over (Under) Expenditures (168,508) (23,095) 145,413 Net Change in Fund Balances (168,508) (23,095) 145,413 Fund Balances - Beginning 168, ,072 19,564 Fund Balances - Ending $ - $ 164,977 $ 164,

140 BUDGETARY COMPARISON SCHEDULE MSTU FOR STREET LIGHTING SPECIAL ASSESSMENT FUNDS For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Special Assessments $ 970,217 $ 946,956 $ (23,261) Investment Income 2,537 2, Total Revenues 972, ,678 (23,076) EXPENDITURES Current: Transportation Indian Meadow MSTU 4,542 1,991 2,551 Ocala Heights MSTU 31,169 3,299 27,870 Bahia Oaks MSTU 24,495 12,120 12,375 Boardman MSTU 11,039 4,337 6,702 Doublegate MSTU 2,873 2, Hickory Hills MSTU 4,330 2,159 2,171 Raven Hill MSTU 10,176 2,165 8,011 Churchill Subdivision MSTU 5,981 2,092 3,889 Little Lake Weir MSTU 28,623 16,881 11,742 Rainbow's End MSTU 153,075 1, ,320 Marion Oaks MSTU 1,521, , ,289 Citrus Park MSTU 11,604 4,265 7,339 Boulder Hill MSTU 5,837 1,107 4,730 Total Expenditures 1,815, ,922 1,056,600 Excess (Deficiency) of Revenues Over (Under) Expenditures (842,768) 190,756 1,033,524 Net Change in Fund Balances (842,768) 190,756 1,033,524 Fund Balances - Beginning 842, ,772 57,004 Fund Balances - Ending $ - $ 1,090,528 $ 1,090,

141 BUDGETARY COMPARISON SCHEDULE FIRE RESCUE IMPACT FEES FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Impact Fees $ 8,550 $ 10,928 $ 2,378 Investment Income Total Revenues 8,550 11,443 2,893 EXPENDITURES Current: Public Safety 379,110 16, ,258 Total Expenditures 379,110 16, ,258 Excess (Deficiency) of Revenues Over (Under) Expenditures (370,560) (5,409) 365,151 Net Change in Fund Balance (370,560) (5,409) 365,151 Fund Balance - Beginning 370, ,909 (1,651) Fund Balance - Ending $ - $ 363,500 $ 363,

142 BUDGETARY COMPARISON SCHEDULE EMERGENCY MEDICAL SERVICES FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Investment Income $ - $ 258 $ 258 Miscellaneous Revenues - 10,028 10,028 Total Revenues - 10,286 10,286 EXPENDITURES Current: Public Safety 112,780 74,938 37,842 Total Expenditures 112,780 74,938 37,842 Excess (Deficiency) of Revenues Over (Under) Expenditures (112,780) (64,652) 48,128 Net Change in Fund Balance (112,780) (64,652) 48,128 Fund Balance - Beginning 112, ,888 3,108 Fund Balance - Ending $ - $ 51,236 $ 51,

143 BUDGETARY COMPARISON SCHEDULE STORMWATER PROGRAM For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Special Assessments $ 3,511,645 $ 3,543,657 $ 32,012 Intergovernmental Revenues 330, ,107 (162,893) Charges for Services - 16,325 16,325 Investment Income 57,284 52,776 (4,508) Miscellaneous Revenues - 7,697 7,697 Total Revenues 3,898,929 3,787,562 (111,367) EXPENDITURES Current: Physical Environment 13,518,784 3,504,659 10,014,125 Total Expenditures 13,518,784 3,504,659 10,014,125 Excess (Deficiency) of Revenues Over (Under) Expenditures (9,619,855) 282,903 9,902,758 Net Change in Fund Balance (9,619,855) 282,903 9,902,758 Fund Balance - Beginning 9,619,855 11,848,117 2,228,262 Fund Balance - Ending $ - $ 12,131,020 $ 12,131,

144 BUDGETARY COMPARISON SCHEDULE MSTU FOR GENERAL SERVICES SPECIAL ASSESSMENT FUNDS For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Special Assessments $ 43,629 $ 43,102 $ (527) Investment Income (4) Total Revenues 43,715 43,184 (531) EXPENDITURES Current: General Government Tompkins and Georges Addition 13,439 9,625 3,814 Country Estates Buffington Addition 6,707 1,710 4,997 Wineberry MSTU 6,018 2,841 3,177 Golden Hills MSTU 37,507 8,977 28,530 Delcrest MSTU 10,480 1,259 9,221 Bellaire MSTU 7,135 1,797 5,338 Total Expenditures 81,286 26,209 55,077 Excess (Deficiency) of Revenues Over (Under) Expenditures (37,571) 16,975 54,546 Net Change in Fund Balances (37,571) 16,975 54,546 Fund Balances - Beginning 37,571 42,409 4,838 Fund Balances - Ending $ - $ 59,384 $ 59,

145 BUDGETARY COMPARISON SCHEDULE CLERK OF THE CIRCUIT COURT TRUST FUND For the Year Ended September 30, 2014 Variance with Budget - Over Budget Actual Amounts (Under) REVENUES Charges for Services $ 641,830 $ 619,416 $ (22,414) Judgments and Fines 348, ,826 (174) Investment Income 1, (481) Total Revenues 991, ,161 (23,069) EXPENDITURES Current: General Government 357, , ,761 Court-Related 1,322, , ,205 Total Expenditures 1,680, , ,966 Excess (Deficiency) of Revenues Over (Under) Expenditures (688,994) 57, ,897 OTHER FINANCING SOURCES (USES) Transfers In 4,765 4,765 - Total Other Financing Sources and (Uses) 4,765 4,765 - Net Change in Fund Balance (684,229) 62, ,897 Fund Balance - Beginning 684, ,356 79,127 Fund Balance - Ending $ - $ 826,024 $ 826,

146 145