ESCAMBIA COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT

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2 COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended September 30, 2014 Prepared by: Pam Childers, CPA and the Finance Staff Office of the Clerk of the Circuit Court and Comptroller

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4 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Escambia County Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2013 Executive Director/CEO i

5 COUNTY OFFICIALS BOARD OF COUNTY COMMISSIONERS Lumon J. May... Chairman District 3 Steven L. Barry... Vice Chair District 5 Wilson B. Robertson... Commissioner District 1 Gene M. Valentino... Commissioner District 2 Grover C. Robinson... Commissioner District 4 ELECTED COUNTY OFFICERS Pam Childers... Clerk of the Circuit Court and Comptroller Chris Jones... Property Appraiser David Morgan... Sheriff David Stafford... Supervisor of Elections Janet Holley... Tax Collector OTHER OFFICIALS Jack Brown... County Administrator Alison Rogers... County Attorney ii

6 COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2014 TABLE OF CONTENTS INTRODUCTORY SECTION Certificate of Achievement for Excellence in Financial Reporting... i County Officials... ii Table of Contents... iii Letter of Transmittal... vii Organization Chart... xiv FINANCIAL SECTION Independent Auditors Report... 1 Management s Discussion and Analysis... 4 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual - General Fund County Wide Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Disaster Recovery Fund Statement of Net Position Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds Statement of Cash Flows Proprietary Funds Statement of Fiduciary Net Position Agency Funds Statement of Net Position Component Units Statement of Activities Component Units Notes to the Financial Statements iii

7 Required Supplementary Information: Schedule of Funding Progress for Other Postempolyment Benefits Other Supplementary Information: Major Governmental Funds: Budgetary Comparison Schedule - Local Option Sales Tax Fund General Fund: Combining Balance Sheet General Fund by Category Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance General Fund by Category Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - General Fund Nonmajor Governmental Funds: Combining Balance Sheet All Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances All Nonmajor Governmental Funds Combining Balance Sheet Nonmajor Governmental Funds Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds - Special Revenue Funds Budgetary Comparison Schedules - Special Revenue Funds: Escambia County Restricted Fund Economic Development Fund Code Enforcement Fund Mass Transit Fund M & A State Revenue Fund Tourist Promotion Fund Other Grant Projects Fund Detention/Jail Commissary Fund Library Fund Misdemeanor Probation Fund Article V Fund Development Review Fund Perdido Key Beach Mouse Fund State Housing Initiative Partnership Fund (SHIP) Law Enforcement Trust Fund Escambia Affordable Housing Fund CDBG HUD Entitlement Fund Handicapped Parking Fines Fund Family Mediation Fund Fire Protection Fund Emergency 911 Operations Fund HUD-CDBG Housing Rehabilitation Fund HUD Home Fund Community Redevelopment Agency Fund Southwest Sector Road Project Fund Bob Sikes Toll Facilities Fund Transportation Trust Fund MSBU Assessment Program Fund Master Drainage Basin Fund iv

8 Clerk Programs Sheriff Programs Supervisor of Election Programs Budgetary Comparison Schedules Debt Service Fund Combining Balance Sheet Nonmajor Governmental Funds - Capital Projects Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Capital Projects Funds Budgetary Comparison Schedules Capital Projects Funds: Federal Transit Administration Fund New Road Construction Fund Nonmajor Proprietary and Internal Service Funds: Combining Statement of Net Position Nonmajor Proprietary Funds Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Proprietary Funds Combining Statement of Cash Flows Nonmajor Proprietary Funds Combining Statement of Net Position Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds Combining Statement of Cash Flows Internal Service Funds Fiduciary Funds Agency Funds: Combining Statement of Fiduciary Net Position Agency Funds Statements of Changes in Assets and Liabilities Agency Funds STATISTICAL SECTION Schedule 1 Net Position by Component Last Ten Fiscal Years Schedule 2 Changes in Net Position Last Ten Fiscal Years Schedule 3 Fund Balances of Governmental Funds Last Ten Fiscal Years Schedule 4 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years Schedule 5 Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Schedule 6 Direct and Overlapping Property Tax Rates Last Ten Fiscal Years Schedule 7 Principal Property Tax Payers Current and Nine Years Ago Schedule 8 Property Tax Levies and Collections Last Ten Fiscal Years Schedule 9 Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Schedule 10 Direct and Overlapping Governmental Activities Debt and Computation of Legal Debt Margin Schedule 11 Pledged Revenue Coverage Last Ten Fiscal Years Schedule 12 Demographic and Economic Statistics Last Ten Fiscal Years Schedule 13 Principal Employers Current and Nine Years Ago v

9 Schedule 14 Escambia County Government Employees by Function/Program Last Ten Fiscal Years Schedule 15 Operating Indicators by Function/Program Last Ten Fiscal Years Schedule 16 Capital Asset Statistics by Function/Program Last Ten Fiscal Years COMPLIANCE SECTION Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Auditor General Compliance: Independent Accountants Report on Examination of Compliance Requirements in Accordance with Chapter , Rules of the Auditor General Deepwater Horizon Oil Spill: Independent Auditors Report on the Schedule of Receipts and Expenditures of Funds Related to the Deepwater Horizon Oil Spill Schedule of Receipts and Expenditures of Funds Related to the Deepwater Horizon Oil Spill Auditor General Management Letter: Management Letter Management s Response to Management Letter Single Audit Compliance: Independent Auditors Report on Compliance for Each Major Federal Program and State Project and on Internal Control Over Compliance Required by OMB Circular A-133; and Chapter , Rules of the Auditor General Schedule of Expenditures of Federal Awards and State Financial Assistance Notes to the Schedule of Expenditures of Federal Awards and State Financial Assistance Schedule of Findings and Questioned Costs SUPPORTING FINANCIAL STATEMENTS Special-Purpose Fund Financial Statements and Required Supplementary Information... Escambia County Clerk of the Circuit Court and Comptroller Escambia County Property Appraiser Escambia County Sheriff Escambia County Supervisor of Elections Escambia County Tax Collector vi

10 Pam Childers Clerk of the Circuit Court and Comptroller, Escambia Clerk of Courts County Comptroller Clerk of the Board of County Commissioners Recorder Auditor February 18, 2015 To the Honorable Members of the Board of County Commissioners and Citizens of Escambia County, Florida Florida Statutes require that all general-purpose local governments publish a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP), and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby submit the Comprehensive Annual Financial Report (CAFR) of the County of Escambia (County), Florida for the fiscal year ended September 30, 2014 which fulfills this requirement. This report consists of management s representations concerning the finances of the County. Consequently, management assumes full responsibility for the completeness and reliability of the information contained in this report. To provide a reasonable basis for making these representations, the County has established a comprehensive framework of internal control designed both to protect the government s assets from unauthorized use or disposition, loss or theft, and to compile sufficient reliable information for the preparation of the County s financial statements in conformity with GAAP. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The County s financial statements have been audited by an independent firm of certified public accountants, Warren Averett CPAs and Advisors. The goal of the independent audit was to provide reasonable assurance that the financial statements of the County for the fiscal year ended September 30, 2014, are free of material misstatements. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. Finance 221 Palafox Place Suite 130 Pensacola, FL Telephone vii

11 The independent audit firm of Warren Averett CPAs and Advisors have issued an unmodified ( clean ) opinion on the Escambia County, Florida financial statements for the year ended September 30, The independent auditor s report is located at the front of the financial section of this report. The independent audit of the financial statements of the County was also designed to meet the requirements of the Federal Single Audit Act and the Office of Management and Budget (OMB) Circular A-133. The standards governing single audit engagements require the independent auditor to report on the government s internal controls and compliance with legal requirements with special emphasis on the administration of federal awards and state financial assistance. These reports are in the compliance section of this report. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of the Management s Discussion and Analysis (MD&A). The MD&A complements this Letter of Transmittal and the two should be read in conjunction with each other. Escambia County s MD&A can be found immediately following the Independent Auditors Report. Profile of the County of Escambia, Florida Escambia County, located in the northwestern part of the state, was established July 21, 1821 as a non-charter government when the Provisional Governor Andrew Jackson signed an ordinance making the County one of the first two counties in Florida, the other being St. Johns County. Escambia County encompasses approximately 661 square miles with 64,000 acres of water area and serves a population of approximately 305,817. There are two municipalities within the County, the City of Pensacola, the County seat, and the Town of Century which is located 38 miles from the County seat. Escambia County is a political subdivision of the State of Florida. As such, it is governed by and derives its operating authority from the constitution and laws of the State of Florida. The County operates under a commission/administrator form of government, with a governing board consisting of five elected County Commissioners who are elected by district to staggered four-year terms. The Chairman presides over the Board and the chair is rotated annually in sequential order by district. In addition to the Board of County Commissioners, there are five elected constitutional officers performing specifically designated governmental functions: The Clerk of the Circuit Court and Comptroller (Clerk), Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector. The Clerk serves the function of Clerk to the Board for County Commissioners. The Clerk also performs the duties of auditor, accountant, recorder and custodian of County funds. Such duties are set fourth in the Florida Constitution. The financial reporting entity (the County) includes all the funds of the primary government (Escambia County Board of County Commissioners) as well as its viii

12 component units. Component units are legally separate entities for which the primary government is financially accountable. The County provides a full range of services including fire protection, emergency medical services, county jail and detention facilities, planning and zoning, solid waste disposal, construction and maintenance of highways, streets, and other infrastructure, mass transportation services, conservation and resource management, cultural and recreational programs, library, tourism and economic development. Although legally separate entities, the general funds of the Clerk, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector are included as a General Fund component of the County. The Santa Rosa Island Authority (SRIA) and the Law Library are reported separately as discrete component units within Escambia County s financial statements. SRIA operations include management services and leasing activities for County owned property on Santa Rosa Island. For additional information on Escambia County s Component Units, please refer to the Notes Section of this report. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the County operates. Local Economy Escambia County is located in Florida s Panhandle, along the emerald shores of the Gulf Coast wherein the tourism sector employs approximately 22,300 in the leisure and hospitality industry with accommodations and food services representing 12.7% of the area workforce. The largest major industry sector is the health care and social assistance with 16.5% of the area workforce. There are four major hospitals located in Escambia County, all of which have surgical centers; Baptist Hospital, West Florida Regional Medical Center, Navy Hospital and Sacred Heart Hospital. There are approximately 20,500 employed in the health and other health related services. The military is another large factor in the area s economy. Navy and Air Force expenditures, including construction have historically accounted for nearly half the total payroll in the Pensacola metro area. Navy installations include Pensacola Naval Air Station, Saufley Field and Corry Station. Whiting Field is located in Milton Florida, about 30 miles northeast of Pensacola. In neighboring Okaloosa County, Eglin Air Force Base and Hurlburt Field have an impact on the local economy as well as serving as magnets for high tech businesses. Escambia County has several commercial/industrial parks. The County s commerce parks consist of Central and Heritage Oaks as well as the downtown Technology Park. The properties in the Central Commerce Park and the downtown Technology Park are ix

13 being marketed in partnership with the Greater Pensacola Chamber of Commerce. This will allow the County to reach a wider audience for promoting economic development and attracting new businesses to the area. The Heritage Oaks Commerce Park, home to Navy Federal Credit Union, continues to stimulate growth in the local economy by increasing job creation and expanding operations in the area. Navy Federal Credit Union has added 530 jobs in 2014, bringing its regional employment to over 5,800 jobs. Continued expansion will include facilities and parking for an additional 5,000 employees bringing the total number of jobs to 10,000 by Escambia County s unemployment rate has fallen for the fourth straight year. The unemployment rate of 6% locally reflects a decrease of.5% from the previous year s rate of 6.5%. Long-term Financial Planning and Major Initiatives Unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) in the general fund at year end exceeded 2 months of operating expenditures and transfers out. This amount is favorable based on the policy guidelines set by the County for budgetary and planning purposes. The adopted budget was developed around the framework set by the County s strategic planning initiative. The primary themes of the strategic initiative are to improve customer service, restore public trust and confidence, economic development, maintenance of infrastructure, and fiscal responsibility. Process improvement is key to improving customer service. The County is continuing its implementation of the Public Works work order system and utilization of the Citizen Support Portal. The Citizens Portal powered by GovQA allows questions on a variety of subjects to get a response by the County. The goal is to generate as many records as possible in electronic format and make them available for Citizens. The County s website continues to be updated for greater utility, transparency and accessibility by citizens. The County will implement a new vehicle tracking system and fraud abuse hotline; these initiatives will allow continuous tracking and reporting, allowing employees and citizens to have more involvement in their government. Other initiatives include the Clerk s migration to the County s server. Other efficiency gains include electronic payroll, electronic payables, and electronic change order submissions to the Clerk s Office. A long term goal of the County is to foster economic growth and development. The County uses Tax Increment Financing (TIF) Districts to fund a variety of Community Redevelopment Areas (CRA) in the County. For the upcoming fiscal year the TIF rate x

14 was increased from 34.3% to 50% and increased to a total of 15 budgeted districts. These funds are used to pay for infrastructure improvements in these districts. With tourism as a major part of the economy, newer and more up-to-date hotel/motel facilities have led to increasing revenue streams approaching $8 million annually in bed tax collections. Additional funding expected from grant revenues, and savings from defeased bonds, will provide an increased future revenue source for funding tourism related activities, marketing and advertising. Adding to the economic development initiative, the County continues to move forward with the Technology Park located in the downtown Pensacola area. The park was partially funded with Local Option Sales Tax revenue. Based on the economic development incentive ordinance adopted by the County, targeted companies that create a minimum of 10 new jobs with an average salary requirement may receive rebates/grants of local taxes. In the downtown Pensacola area, construction has begun on a new 30,000 square foot research and development facility, including a robotics lab and parking improvements for the Florida Institute for Human and Machine Cognition (IHMC). This project serves a public purpose by advancing technical research, improving employment, and economic conditions in the geographical boundaries of the County. Between 2008 and 2018 the County will have invested more than $378 million in infrastructure with current allocations of the One Cent Local Option Sales Tax (LOST). Proceeds of this tax are scheduled to fund road reconstruction, dirt road paving, drainage improvements and vehicle replacements for Emergency Medical Service, the Fire Department and Sheriff s Office, as well as new construction of library structures. LOST funding was scheduled to expire December In November 2014, a 10 year extension was approved by public referendum; this vote extends the tax to December A four cent fuel tax was levied during the current fiscal year, for the direct benefit of the County s mass transit system. This fuel tax will eliminate approximately $3.7 million in future General Fund subsidies, while contributing annually approximately $4.5 million for the operations of the County s mass transit system. The RESTORE Act established the Gulf Coast Restoration Trust Fund in the U.S. Treasury Department to account for civil penalties paid under the Federal Water Pollution Control Act in connection with the Deepwater Horizon oil spill. Grants will be available for programs, projects, and activities that restore and protect the environment and economy of the Gulf Coast region. Escambia County is eligible to apply for their calculated proportion of Florida s Direct Component share of the trust fund, which is estimated at $10.6 million. A multi-year implementation plan is being developed and potential projects will be presented for selection and approval by the Board of County Commissioners. Examples of projects could include shoreline restoration, storm water retrofits and workforce development. xi

15 The fiscal year 2015 adopted budget increased by $20.4 million over the prior year to $385 million. While the total direct millage rate for property tax remained unchanged at mills, property values increased an average of 4.5% over the prior year for both the County-wide and unincorporated areas of Escambia County. Discussions are on-going with regard to gaining efficiencies through consolidation efforts and promoting cost effectiveness on a range of issues including employee benefits, financial systems, and geographic information systems. Relevant Financial Policies The County has established a fund balance policy in accordance with GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. The adopted policy outlining the County s goal to maintain an unrestricted general fund balance of at least 2 months of regular operating expenditures and transfers out to mitigate risks of either natural or man-made disasters and to provide for revenue shortfalls. GASB Statement No. 65 Items Previously Reported as Assets and Liabilities was early implemented for fiscal year ended September 30, 2013 in conjunction with GASB Statement No. 63 Financial Reporting of Deferred Outflows of Resources, Deferred inflows of Resources and Net Position. The County provides pension benefits for all employees through a statewide plan managed by the Florida Department of Management Services, Division of Retirement. The statewide plan is a contributory plan. The County currently has no obligation in connection with employee pension benefits offered through this plan beyond its monthly payments to the Division of Retirement. However, effective for fiscal years beginning after June 2014, the County will be required by GASB Statement No 68 Accounting and Financial Reporting for Pensions to recognize its unfunded portion of the statewide plan as a liability. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Escambia County for its comprehensive annual financial report for the fiscal year ended September 30, This is the 18 th consecutive year that Escambia County has achieved this prestigious award. In order to be awarded a Certificate of Achievement, Escambia County must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We believe that our current comprehensive annual financial report xii

16 continues to meet the Certificate of Achievement for Excellence in Financial Reporting Program s requirements, and we are submitting it to the GFOA to determine its eligibility for another Certificate. Escambia County also received the GFOA s Distinguished Budget Presentation Award for its Annual Budget Document for fiscal year beginning October 1, This is the 18 th, consecutive year that Escambia County has received this award. In order to qualify for the Distinguished Budget Presentation Award, the government s budget document had to be judged proficient as a policy document, a financial plan, an operations guide, and a communication device. The preparation of this comprehensive annual financial report (CAFR) would not have been possible without the skill, effort, and dedication of the entire financial staff of the Clerk of the Circuit Court and Comptroller. I would like to express my appreciation to Financial Reporting and Grants Department: Sharon Harrell, Manager; Elizabeth Parker, Harold Coats, Belinda Justin, and Kara Cowan. I also wish to thank all government departments for their assistance in providing the data necessary to prepare this report. Credit is due to the Board of County Commissioners for their unfailing support for maintaining the highest standards of professionalism in the management of Escambia County. Respectfully submitted, Pam Childers Pam Childers Honorable Pam Childers Clerk of the Circuit Court & Comptroller xiii

17 CITIZENS OF ESCAMBIA COUNTY CLERK OF COURT TAX COLLECTOR BOARD OF COUNTY COMMISSIONERS SUPERVISOR OF ELECTIONS PROPERTY APPRAISER SHERIFF Board Finance COUNTY ATTORNEY COUNTY ADMINISTRATOR ASSISTANT COUNTY ADMINISTRATOR ADMINISTRATION PUBLIC WORKS DEVELOPMENT SERVICES Government Relations Economic Development HUMAN RESOURCES Transportation & Traffic ECAT Infrastructure Development Review Planning and Zoning GIS OMB Budget Risk Management Purchasing Contracts Property Sales PUBLIC INFORMATION OFFICE SOLID WASTE Waste Services Engineering/Environmental Quality Division INFORMATION TECHNOLOGY Telecommunications PUBLIC SAFETY Emergency Management Communications EMS Business Operations Fire Support Operations West Florida Public Library Engineering Fleet Roads & Bridges COMMUNITY & ENVIRONMENT Marine Resources Natural Resources Conservation Water Quality and Land Management Community Redevelopment Agency Neighborhood Enterprise Mosquito Control Extension Services COMMUNITY AFFAIRS Animal Services Community Services Human Assistance BUILDING INSPECTIONS CORRECTIONS Community Corrections Misdemeanor Probation Community Confinement Check Diversion Pre Trial Diversion Pre Trial Release Work Release Community Service Work Code Enforcement/Animal Control Road Prison Detention/County Jail FACILITIES MANAGEMENT Maintenance DCAT PARKS & RECREATION xiv

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19 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com REPORT OF INDEPENDENT AUDITORS The Honorable Board of County Commissioners Escambia County, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Escambia County, Florida, (hereinafter referred to as County ) as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the County s basic financial statements as listed in the table of contents. We did not audit the financial statements of the Santa Rosa Island Authority, a business type activities-discrete component unit, as of and for the year ended September 30, 2014, which statements reflect total assets of $21,564,586 and total revenues of $8,459,622. 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 did not audit the financial statements of the Santa Rosa Island Authority, which are included in the basic financial statements as a discretely presented component unit. Those statements were audited by another auditor whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Santa Rosa Island Authority, is based solely on the report of the other auditor. 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 auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. 1

20 In making those risk assessments, the auditor considers internal control relevant to the County 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 County s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the report of the other auditor, 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 the 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 the disaster recovery fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis and schedule of funding progress on pages 4-22 and 80, respectively, 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 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County s basic financial statements. The introductory section, combining financial statements, individual fund budgetary comparison schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining financial statements and individual fund budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information 2

21 has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 18, 2015 on our consideration of the County s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County s internal control over financial reporting and compliance. February 18, 2015 Pensacola, Florida 3

22 MANAGEMENT S DISCUSSION AND ANALYSIS September 30, 2014 This Management s Discussion and Analysis ( MD&A ) presents the readers of the financial statements a narrative overview of the financial activities of Escambia County, Florida (the County ) for the fiscal year ended September 30, We encourage readers to consider the information presented here in conjunction with additional information that has been furnished in the Letter of Transmittal, which can be found in the introductory section of this report. Financial Highlights The assets and deferred outflows of resources of the County exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by $656,729,359 (net position). Of this amount, $42,319,174 represents unrestricted net position, which may be used to meet the government s ongoing obligations to citizens and creditors. The County s total net position increased by $17,431,437; governmental activities increased by $12,577,674 and business-type activities increased by $4,853,763. At the close of the current fiscal year, the County s governmental funds reported combined ending fund balances of $177,476,220, an increase of $32,960,499 in comparison with the prior year. At the end of the current fiscal year, unassigned fund balance available for spending at the government s discretion for the General Fund was $23,647,226 or 15.2% of total general fund expenditures and transfers out. At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) for the General Fund was $33,720,609, or approximately 21.7% of total general fund expenditures and transfers out. Governmental funds revenues increased $26,508,321 or 10.1% from the prior fiscal year primarily due to increases in property tax revenue, sales tax revenues, fuel tax revenues, along with funding from grants and capital contributions. The prior year included approval and collection of a longawaited reimbursement from FEMA of approximately $4 million for disaster related expenditures of several years ago, and grant funding for transportation infrastructure projects and the public transit system. Fuel tax revenues increased due to the adoption of a local option fuel tax ($.04) to fund public transportation which was effective on January 1, 2014 and is effective for an indefinite duration unless rescinded by law. The increase in culture and recreation is attributable to the County becoming the fiscal agent for the Library system. 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 consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves. 4

23 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 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. 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 financial information on all of the County s assets, liabilities and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the 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 the most recent 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 government-wide 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, public safety, physical environment, transportation, economic environment, human services, culture/recreation, and court related activities. The business-type activities of the County include solid waste disposal/landfill operations, emergency medical/ambulance services, building inspections, and the Pensacola Bay Center (Bay Center). 5

24 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 The government-wide financial statements include not only the County itself (known as the primary government) but also legally separate entities (the Santa Rosa Island Authority (SRIA) and the Escambia County Law Library) for which the County is financially accountable. These entities are known as component units. Financial information for these component units is reported separately from the financial information presented for the primary government itself. 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 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 fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains dozens of individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Disaster Recovery Fund, and Local Option Sales Tax (LOST) Capital Projects Fund, which are considered to be major funds. Data from the other governmental funds are combined into a single aggregated presentation. Individual fund data for each of these non-major 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, debt service, and capital projects funds. Budgetary comparison statements have been provided for the General Fund to demonstrate budgetary compliance. Due to the nature of the Disaster Recovery Fund, the original budget is generally adopted with an appropriation of zero. 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/landfill operations, emergency medical/ambulance services, building inspections, and the Bay Center. 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 fleet and fuel activities, insurance activities and for certain costs related to the Clerk of Circuit Court and Comptroller s compensated absences policy. 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 Emergency Medical Service (EMS) funds, which are considered to be major funds of the County. Non-major funds include the Inspection and Bay Center funds, which are combined into a single, aggregated 6

25 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 presentation in the proprietary fund financial statements. Individual fund data for each of these non-major enterprise funds are provided in the form of combining statements in the other supplementary information section of this report. Internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for internal service funds are also provided in the form of combining statements in the other supplementary information section of this report. 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 statements 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 presented concerning the County s progress in funding its obligation to provide other post employment benefits (OPEB) to its employees. The other supplementary information section contains the combining statements referred to earlier in connection with nonmajor governmental funds, proprietary and internal service funds, and fiduciary funds, along with budgetary comparison schedules for the County s major capital project fund (LOST) and for all nonmajor governmental funds. Government-wide Financial Analysis Net position over time may serve as a useful indicator of a government s financial position. For the County, assets and deferred outflows of resources exceeded liabilities and deferred inflows by $656,729,359 at the close of the most recent fiscal year. At the end of fiscal year 2014, the County is able to report positive balances in all reported categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. The County s restricted net position represents 18.36% of resources that are subject to external restrictions on how they may be used. The County s restricted net position is primarily for capital projects and other special revenue purposes. The largest portion of the County s net position (75.2%) reflects its investment in capital assets (e.g., land, buildings, and equipment); less any related outstanding debt used to acquire those 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 remaining balance of $42,319,174 is unrestricted and may be used to meet the government s ongoing obligations to its citizens and creditors. 7

26 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Escambia County, Florida Net Position Governmental Activities Business-type Activities Total Current and other assets $ 233,172,802 $ 193,531,606 $ 41,401,145 $ 33,804,063 $ 274,573,947 $ 227,335,669 Capital Assets (Net) 549,028, ,141,674 50,952,170 52,501, ,980, ,643,185 Total Assets 782,201, ,673,280 92,353,315 86,305, ,554, ,978,854 Total deferred outflow of resources 2,630,299 2,780, ,630,299 2,780,810 Current and other liabilities 37,445,105 29,087,441 2,563,389 1,958,833 40,008,494 31,046,274 Long-term Liabilities 162,453, ,888,663 16,442,312 15,852, ,895, ,741,553 Total Liabilities 199,898, ,976,104 19,005,701 17,811, ,904, ,787,827 Total deferred inflow of resources 1,551,502 1,673, ,551,502 1,673,915 Net Position: Net Investment in Capital Assets 442,850, ,717,484 50,952,170 52,501, ,803, ,218,995 Restricted 120,607, ,727, ,607, ,727,877 Unrestricted 19,923,730 15,358,710 22,395,444 15,992,340 42,319,174 31,351,050 Total Net Position $ 583,381,745 $ 570,804,071 $ 73,347,614 $ 68,493,851 $ 656,729,359 $ 639,297,922 Overall, the County s net position increased $17,431,437 from the prior year. Key reasons for the overall increase are presented in the following pages for governmental and business-type activities. 8

27 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Escambia County, Florida Changes in Net Position Governmental Activities Business-type Activities Total REVENUES Program Revenues: Charges for Services $ 54,558,356 $ 49,216,402 $ 32,633,296 $ 29,448,294 $ 87,191,652 $ 78,664,696 Operating Grants and Contributions 18,946,291 19,238, ,789 2,119 19,049,080 19,240,918 Capital Grants and Contributions 10,655,018 4,813, ,373 1,555,709 10,786,391 6,368,734 General Revenues: Property Taxes 101,075,597 93,789, ,075,597 93,789,284 Other Taxes 89,981,322 84,802, ,981,322 84,802,053 Other 16,887,237 11,663, , ,033 17,464,547 11,820,116 EXPENSES Total Revenues 292,103, ,522,646 33,444,768 31,163, ,548, ,685,801 General Government 63,252,383 74,163, ,252,383 74,163,409 Public Safety 127,212, ,598, ,212, ,598,294 Physical Environment 1,618,286 2,057, ,618,286 2,057,260 Transportation 48,542,586 52,130, ,542,586 52,130,129 Economic Environment 12,138,809 11,274, ,138,809 11,274,372 Human Services 2,462,040 2,493, ,462,040 2,493,071 Culture/Recreation 8,930,426 4,463, ,930,426 4,463,775 Court-Related 11,214,597 10,151, ,214,597 10,151,928 Interest on Long-term Debt 3,391,708 3,058, ,391,708 3,058,222 Solid Waste - - 9,918,821 9,987,571 9,918,821 9,987,571 Ambulance ,795,626 9,912,218 10,795,626 9,912,218 Inspection Fund - - 2,079,114 1,876,077 2,079,114 1,876,077 Bay Center - - 6,560,116 6,582,557 6,560,116 6,582,557 Total Expenses 278,763, ,390,460 29,353,677 28,358, ,117, ,748,883 Excess (Deficiency) Before Transfers 13,340,346 (3,867,814) 4,091,091 2,804,732 17,431,437 (1,063,082) Transfers (762,672) (906,986) 762, , Change in Net Position 12,577,674 (4,774,800) 4,853,763 3,711,718 17,431,437 (1,063,082) Beginning Net Position 570,804, ,578,871 68,493,851 64,782, ,297, ,361,004 Ending Net Position $ 583,381,745 $ 570,804,071 $ 73,347,614 $ 68,493,851 $ 656,729,359 $ 639,297,922 Governmental Activities Governmental activities increased the County s net position by $12,577,674 from the prior fiscal year for an ending balance of $583,381,745. Although millage rates remained the same, property tax revenue increased due to rising taxable assessed values. Charges for services increased primarily due to the legislative reclassification of court related operating fees previously recorded as intergovernmental revenue. Capital grant revenue was primarily for LOST infrastructure projects and public transportation capital. The increase in 9

28 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 public safety expenditures was partially offset by reductions of expenses in other functional categories. Public safety increases and general government decreases were primarily due to the transition of the county detention facility from the Sheriff to the Board of County Commissioners, and additional costs incurred for relocation and repairs after the April flood event. Culture and recreation increased primarily due to the operations of the library system becoming the responsibility of the County, while transportation expenses decreased due to various LOST funded transportation and drainage projects. Expenses and Program Revenues Governmental Functions/Programs Expenses % of Total Program Revenues % of Total Net (Expense) Revenue General Government $ 63,252, % $ 5,246, % $ (58,005,420) Public Safety 127,212, % 23,760, % (103,452,502) Physical Environment 1,618, % 15,502, % 13,884,340 Transportation 48,542, % 16,841, % (31,701,557) Economic Environment 12,138, % 3,912, % (8,226,339) Human Services 2,462, % 292, % (2,169,189) Culture/Recreation 8,930, % 5,511, % (3,419,413) Court-Related 11,214, % 13,092, % 1,877,978 Interest on Long-term Debt 3,391, % - - (3,391,708) $ 278,763, % $ 84,159, % $ (194,603,810) 130,000, ,000,000 Expenses and Program Revenues - Governmental Activities 90,000,000 70,000,000 Expenses trogram Revenues 50,000,000 30,000,000 10,000,000 (10,000,000) 10

29 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Revenue by Source Governmental Activities Description Revenues % of Total Charges for Services $ 54,558, % Operating Grants & Contributions 18,946, % Captial Grants & Contributions 10,655, % Property Tax 101,075, % Sales Tax 59,450, % Public Service Tax 1,322, % Communication Service Tax 2,661, % Gas Tax 16,106, % State Revenue Sharing 7,357, % Tourist Development Tax 8,395, % Other Taxes 2,044, % Intergovernmental Revenues 50, % Investment Income 1,347, % Miscellaneous 8,131, % $ 292,103, % Revenues by Source - GovernmenPMl AcPiviPies Property Tax, 34.6% Operating Grants and Contributions, 6.5% Sales Tax, 20.4% Other, 14.4% Charges for Services, 18.7% Gas Tax, 5.5% Capital Grants and Contributions, 3.6% Public Service Tax, 0.5% Communication Service Tax,0.9% State Revenue Sharing, 2.5% Tourism Tax, 2.9% Other Taxes, 0.7% Intergovernmental, 0.02% Investment Income, 0.46% Miscellaneous, 2.8% 11

30 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Business-type Activities Business-type activities increased the County s net position by $4,853,763 a 6.6% growth from the prior fiscal year, for an ending balance of $73,347,614. Charges for services contributed 99% of the total program revenues for the County s business-type activities. The Solid Waste and EMS funds were primarily responsible for the overall increase in net position. The net position increase for the Solid Waste Fund was primarily due to increased rates charged for franchise and commercial dumping, in addition to the increased volume of waste due to the April 2014 flood event. Revenue increases in the Inspection Fund were due to the increased permit activity following the flood event. The increase in the EMS Fund s net position was primarily due to increase in charges for services, along with reduced third party contractual adjustments. The Bay Center continues to struggle financially with expenses exceeding revenues by $1.9 million and operations were subsidized by a transfer from the General Fund of $1.3 million. While the Bay Center s operating revenues increased during the current fiscal year, the increase was not sufficient to cover high operating costs and required maintenance. 12

31 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Expenses and Program Revenues Business-type Activities Functions/Programs Expenses % of Total Program Revenues % of Total Net (Expense) Revenue Solid Waste 9,918, % 13,720, % $ 3,801,801 Emergency Medical Service 10,795, % 12,252, % 1,457,168 Inspection Fund 2,079, % 2,306, % 227,018 Bay Center 6,560, % 4,587, % (1,972,206) $ 29,353, % $ 32,867, % $ 3,513,781 % Revenue over Expenses Solid Waste 38.3% Emergency Medical Service 13.5% Inspection Fund 10.9% Bay Center -30.1% 16,000,000 14,000,000 12,000,000 10,000,000 Expenses Mnd Revenues - Business-Type Activities Expenses trogram Revenues 8,000,000 6,000,000 4,000,000 2,000,000 - Solid Waste Emergency Medical Service Inspection Fund Bay Center 13

32 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Revenues by Source Business-type Activities Description Revenues % of Total Charges for Services $ 32,633, % Operating Grants and Contributions 102, % Capital Grants and Contributions 131, % Investment Income 177, % Miscellaneous 399, % $ 33,444, % 97.6% Revenues by Source - Business-Type Activities Charges for Services Operating Grants and Contributions Capital Grants and Contributions Investment Income 0.3% 0.4% 0.5% 1.2% Miscellaneous 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 discretionary use as they represent the portion of fund balance which has not been limited to use for a particular purpose by either an external party, the County itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the County s Board of County Commissioners. At the end of fiscal year 2014, the County s governmental funds reported combined fund balances of $177,476,220, an increase of $32,960,499 in comparison with the prior year. Approximately 11% of this amount ($19,810,686) constitutes unassigned fund balance, which is available for spending at the County s discretion. The remainder of the fund balance is either nonspendable, restricted, committed or assigned. 14

33 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Restricted fund balances of $123,348,894 represent amounts that can only be spent for specific purposes as stipulated by external resource providers either constitutionally or through enabling legislation such as Florida Statutes, laws and regulations or grantors. Committed fund balances of $14,266,718 represent amounts committed by County ordinance, whereas assigned fund balances of $10,073,383 consists of funds budgeted in the subsequent year to balance the 2015 budget. Nonspendable fund balances are not available for spending because they are not in spendable form, or are legally required to be maintained intact. The ending nonspendable fund balances consists of $894,383 for inventories and $9,082,156 for long term other assets. The General Fund is the chief operating fund of the County. At the end of the current fiscal year unassigned fund balance of the General Fund was $23,647,226, while total fund balance increased to $38,087,975. 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 16.6% of the total general fund expenditures, while total fund balance represents 26.7% of that same amount. 15

34 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 The following graphs represent the components of fund balance in the General Fund, and the components of fund balance in the other governmental funds: 25,000,000 20,000,000 General Fund Components of Fund Balance ,000,000 10,000,000 5,000,000 - Unasssigned Assigned Committed Restricted Nonspendable Other Governmental Funds Components of Fund Balance 120,000, ,000,000 80,000,000 60,000, ,000,000 20,000,000 - (20,000,000) Unasssigned Assigned Committed Restricted Nonspendable 16

35 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 The increase in fund balance of the County s General Fund was $5,467,860 during the current fiscal year, however, the change from prior year decreased by $317,431. Key factors in this are as follows: An increase in revenues and decrease in transfers over fiscal year 2013, are primarily from increases in property taxes, franchise fees and intergovernmental revenue. Property taxes increased due to higher certified property values, franchise fees for natural gas and electric increased due to higher energy use attributable to lower winter temperatures. Local half cent sales tax and state revenue sharing increased intergovernmental revenue, while payments in lieu of taxes and transfers in decreased during the current fiscal year. Transfers in decreased primarily due to the prior year closure of the Sheriff and Clerk internal services funds. A decrease in expenditures and increase in transfers out over fiscal year 2013, are primarily attributable to the public library system and expenditures being reported in a special revenue fund. Public safety expenditures increased due to the jail detention facility responsibilities being assumed by the Board of County Commissioners; increases are primarily due to security, administration and detention operating expense. Transfers were increased for the public safety road prison and debt service. The following graph displays the General Fund s current expenditures by function for FY14 and FY13 (it does not include debt service or other financing uses). General Fund Furrent Expenditures by Function 100% 80% Court-Related Culture/Recreation Human Services 60% 40% Economic Environment Transportation thysical Environment 20% tublic Safety 0% FY14 FY13 General Government The Disaster Recovery Fund was established to account for the costs and related funding assistance from state and federal sources for hurricane or other major disaster events. The negative fund balance of $3,836,540 represents expenditures for the April 2014 flood event that the County believes will ultimately be reimbursed by federal or state sources. An advance from the LOST Fund provided the initial resources to pay for these costs and the advance will be paid off as these outstanding reimbursement claims are resolved. Should the County be denied reimbursement for these claims, the County will have to use resources from other funds to pay off the LOST advance. In 2014, the County collected approximately $4 million from federal sources on a reimbursement from prior major disaster events. Because of the protracted nature of the claims resolution process, and uncertainty in ultimate resolution of such matters, the County has written off related claims receivable several years ago in order to conservatively state the financial position of this fund. 17

36 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 The Local Option Sales Tax Fund s primary revenue is a 1% local option sales tax imposed by Escambia County, which was restricted by voter referendum primarily for capital projects and public safety expenditures. At the end of the current fiscal year, restricted fund balance was $87,122,035 or 229% of the fund s total expenditures and transfers out. Nonspendable fund balance was $5,103,140 for long term other assets. Fund balance increased $24,892,854, primarily as a result of $20 million in debt proceeds that were not matched with offsetting expenditures in the current fiscal year. The capital improvement revenue note, series 2014 issued on September 30, 2014 for $8.5 million was fully unspent at year end. Other factors include a 5.2% increase in the sales tax revenue, driven by improvements in the local economy, and capital expenditure increases of 12.7%. Even though the revenue source is stable and predictable, the planning, budgeting, and execution of large projects results in variances from year to year in the amount of actual expenditure for 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. The Solid Waste and the Emergency Medical Service Fund s are reported as major enterprise funds. The Inspection and Bay Center Fund s are reported as non-major enterprise 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 $ 3,129,819 $ (1,865,975) Emergency Medical Service 16,737,192 15,592,170 Inspection 2,213,235 1,984,876 Bay Center 315, ,269 Total $ 22,395,444 $ 15,992,340 Unrestricted net position for proprietary funds increased $6,403,104, which is a 29% increase from the prior fiscal year. The total change in net position for proprietary funds for the Solid Waste, Emergency Medical Services, Inspection and Bay Center funds was $3,905,457, $1,362,691, $250,026 and ($664,411) respectively. The increases are due to rate increases for franchise and commercial dumping, and increased volume of waste due to the April 2014 flood event. General Fund Budgetary Highlights The General Fund s original budget was increased by $556,668, to arrive at the final amended budget for expenditures and transfers out. During the year, there was no need for any significant amendment to increase the original budget appropriations. However, there was a need to make an amendment to reallocate appropriations among departments when the prior year fund balances were finalized and purchase commitments were approved for re-budgeting. Generally the movement between departments was not significant. The largest change was to public safety, followed by transfers out for community redevelopment and debt service. The changes within functions are summarized in the following table. 18

37 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Original Budget Final Budget Change General Government $ 70,939,540 $ 71,635,232 $ 695,692 Public Safety 83,560,475 86,194,500 2,634,025 Physical Environment 1,164,346 1,210,184 45,838 Transportation Economic Environment Human Services 2,144,635 2,225,600 80,965 Culture/Recreation 1,299,947 1,328,495 28,548 Court-Related 6,849,739 6,699,739 (150,000) Transfers Out 14,084,164 11,305,764 (2,778,400) $ 180,042,846 $ 180,599,514 $ 556,668 The General Fund under spent the final budget by $24,966,158 or 13.8% for expenditures and transfers out. The variance within functions is summarized in the table below: Actual Expenditures Final Budget Variance General Government $ 47,044,692 $ 71,635,232 $ 24,590, % Public Safety 84,622,487 86,194,500 1,572, % Physical Environment 1,160,896 1,210,184 49, % Transportation Economic Environment Human Services 2,084,239 2,225, , % Culture/Recreation 1,256,367 1,328,495 72, % Court-Related 6,476,578 6,699, , % Transfers Out 12,988,097 11,305,764 (1,682,333) -14.9% $ 155,633,356 $ 180,599,514 $ 24,966, % General fund actual expenditures were less than anticipated expenditures by $24,966,158; of this amount $10 million for purchase commitments was re-budgeted and assigned to the subsequent year budget. A review of actual expenditures compared to appropriations in the final budget yields no significant variances with the exception of an overall reduction of $1.8 million in salary, operating, and library grant in aid. Transfers out are offset by the elimination of budgeted General Fund transfers in, so they are not an actual budgeted expenditure. Cost and fuel allocation in the amount of $2.1 million in general government are budgeted, but eliminated expenditures. The remainder of unspent budget is primarily due to unspent budgeted contingency and reserves. 19

38 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 $100,000,000 $80,000,000 $60,000,000 General Fund Actual vs Budgets Actual Expenditures Final Budget Original Budget $40,000,000 $20,000,000 $- 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 $599,980,800 (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 decrease in the County s investment in capital assets for the current fiscal year was 0.6% Major capital asset events during the current fiscal year included the following: Completion of the building renovation on the Sheriff s video visitation project. Ongoing projects include the upgrade of the public safety emergency microwave radio network and P25 radio system and the improvements to the Brownsville Community Center. Net increase of $13,347,029 mainly due to improvements to transportation infrastructure consisting of more than seventy large projects for roads, paving, drainage, sidewalks and bridge renovations. Net increase of $7,709,843 largely due to the purchase of 600 acres in Santa Rosa County which will be used as part of an economic development project led by Escambia County, and 4.13 acres on Perdido Key to improve public assess and for conservation. Equipment purchases include public transportation buses, public safety vehicles, library equipment and books; equipment disposals were primarily related to the flood event. Additional information regarding the flood event can be found in the notes to the financial statement. 20

39 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Escambia County, Florida Capital Assets (Net) Governmental Activities Business-type Activities Total Land $ 46,189,621 $ 38,479,778 $ 5,793,269 $ 5,793,269 $ 51,982,890 $ 44,273,047 Construction in Progress 26,420,117 24,054, ,420,117 24,054,678 Equipment 128,971, ,664,060 21,878,367 21,023, ,849, ,687,896 Buildings and Improvements 239,701, ,723,023 37,544,747 37,539, ,246, ,262,506 Software 5,297,996 5,101, , ,255 5,489,251 5,292,518 Infrastructure 738,848, ,501,188 44,684,731 44,101, ,532, ,603,110 1,185,428,210 1,149,523, ,092, ,649,765 1,295,520,579 1,258,173,755 Less: Accumulated Depreciation (636,399,580) (598,382,316) (59,140,199) (56,148,254) (695,539,779) (654,530,570) Capital Assets, net $ 549,028,630 $ 551,141,674 $ 50,952,170 $ 52,501,511 $ 599,980,800 $ 603,643,185 Additional information on the County s capital assets, including major construction commitments, can be found in Note 3 of this report. Long-term debt At the end of the current fiscal year, the County had total notes and bonded debt outstanding of $117,308,000. Of this amount, $37,065,000 consists of debt backed by Non-Ad valorem tax revenue. The remainder of the debt, $80,243,000 represents bonds and notes secured solely by specified revenue sources (i.e., sales tax and tourist development taxes). Escambia County, Florida Outstanding Notes and Bonded Debt Governmental Activities Revenue Bonds $ 46,780,000 $ 47,545,000 Revenue Notes 70,528,000 53,660,000 $ 117,308,000 $ 101,205,000 The County s outstanding debt had a net increase of $16,103,000 or 15.91% during fiscal year Decreases were attributable to normal debt service principal reductions for revenue notes and revenue bonds. In addition, two capital improvement revenue notes were issued during the year. Additional information on the County s debt, including any major changes to the County s credit ratings, can be found in Note 6 of this report. There is no outstanding debt for Business-type activities. 21

40 MANAGEMENT S DISCUSSION AND ANALYSIS, Continued September 30, 2014 Economic Factors and Next Year s Budgets and Rates The following economic factors currently affect Escambia County and were considered in developing the fiscal year budget. The annual average unemployment rate for the County for 2014 was 6%. The average adjusted rate for 2013 was 6.5%. This represents a decrease of 0.5% from the prior year unemployment rate. The taxable assessed value increased 5.7% in the 2014 fiscal year. Population remained constant from the prior fiscal year to 305,817 at September 30, During the current fiscal year, unassigned fund balance in the General Fund increased to $23,647,226. The County has budgeted $179,096,937 for spending in the 2015 fiscal year budget, and assigned $10,073,383 of the ending 2014 fund balance to the subsequent year s budget. The total ad valorem tax rate remained the same at 7.661% for the 2015 fiscal year budget. In an effort to help stimulate job creation and the economy the County continues to work with the Greater Pensacola Chamber of Commerce and the City of Pensacola to recruit new industry to the area and stimulate job growth. 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 Escambia County Clerk of the Circuit Court and Comptroller, Finance Department, 221 Palafox Place Suite 130 Pensacola Florida 32502; This report is also available at the following web address: 22

41 STATEMENT OF NET POSITION September 30, 2014 Governmental Activities Business-type Activities Total Component ASSETS Cash and Cash Equivalents $ 96,470,823 $ 17,248,275 $ 113,719,098 $ 8,312,029 Investments 105,641,135 19,748, ,389,608 1,515,064 Accounts Receivable, Net 3,100,488 5,662,596 8,763, ,647 Accrued Interest Receivable 262, ,414 - Due from Other Governments 15,424,839 1,100 15,425,939 74,100 Internal Balances 1,562,857 (1,562,857) - - Inventories 1,264, ,629 1,548,534 - Prepaid Items 266,812 19, ,741 77,790 Other Assets 9,178,529-9,178,529 - Capital Assets Not Being Depreciated 72,609,738 5,793,269 78,403,007 - Capital Assets Net of Accumulated Depreciation 476,418,892 45,158, ,577,793 11,162,245 Total Assets 782,201,432 92,353, ,554,747 21,651,875 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 2,630,299-2,630,299 - Total deferred outflow of resources 2,630,299-2,630,299 - LIABILITIES Accounts Payable 15,811, ,715 16,539, ,770 Contracts Payable 1,068,686-1,068,686 - Accrued Liabilities 6,396, ,802 6,856, ,716 Compensated Absences Payable - 131, ,780 - Due to Other Governments 5,079,719 50,935 5,130, ,649 Deposits 359,683 25, ,384 - Unearned Revenue 1,074,400-1,074,400 1,698,825 Other Current Liabilities 7,654,879 1,167,456 8,822,335 - Noncurrent Liabilities: Due Within One Year 11,831, ,385 12,411,455 72,984 Due in More Than One Year 150,622,309 15,861, ,484, ,194 Total Liabilities 199,898,484 19,005, ,904,185 2,797,138 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue 1,551,502-1,551, ,959 Total deferred inflow of resources 1,551,502-1,551, ,959 NET POSITION Net Investment in Capital Assets 442,850,929 50,952, ,803,099 11,054,708 Restricted for: Debt Service 2,060,290-2,060,290 - Capital 84,042,110-84,042,110 2,562,756 Law Enforcement 4,282,966-4,282,966 - Fire and Rescue 4,829,063-4,829,063 - Economic & Community 8,049,009-8,049,009 - Transportation 2,959,139-2,959,139 - Other Purposes 14,384,509-14,384,509 - Unrestricted 19,923,730 22,395,444 42,319,174 4,495,314 Total Net Position $ 583,381,745 $ 73,347,614 $ 656,729,359 $ 18,112,778 Units The notes to the financial statements are an integral part of the financial statements. 23

42 FUNCTIONS/PROGRAMS Primary Government: ESCAMBIA 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 $ 63,252,383 $ 4,273,363 $ 249,197 $ 724,403 Public Safety 127,212,640 17,947,186 5,812,952 - Physical Environment 1,618,286 14,934, , ,160 Transportation 48,542,586 6,509,316 5,958,006 4,373,707 Economic Environment 12,138, ,174 2,443,834 1,088,462 Human Services 2,462, ,851 - Culture/Recreation 8,930, , ,036 4,073,286 Court-Related 11,214,597 10,020,998 3,071,577 - Interest on Long-Term Debt 3,391, Total Governmental Activities 278,763,475 54,558,356 18,946,291 10,655,018 Business-type Activities: Solid Waste 9,918,821 13,617, ,789 - Emergency Medical Services 10,795,626 12,158,315-94,479 Inspection Fund 2,079,114 2,298,918-7,214 Bay Center 6,560,116 4,558,230-29,680 Total Business-type Activities 29,353,677 32,633, , ,373 Total Primary Government $ 308,117,152 $ 87,191,652 $ 19,049,080 $ 10,786,391 Component Units: Escambia County Law Library $ 80,284 $ 85,622 $ - $ - Santa Rosa Island Authority 8,583,596 8,190, ,383 Total Component Units $ 8,663,880 $ 8,276,252 $ - $ 196,383 General Revenues: Property Tax Sales Tax Public Service Tax Communication Service Tax Gas Tax Unrestricted State Revenue Sharing Tourist Development Tax Other Taxes Unrestricted Intergovernmental Revenues Investment Income Miscellaneous Transfers In (Out) 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. 24

43 Net (Expense) Revenue and Changes in Net Position Governmental Activities Business-type Activities Total Component Units $ (58,005,420) $ - $ (58,005,420) (103,452,502) - (103,452,502) 13,884,340-13,884,340 (31,701,557) - (31,701,557) (8,226,339) - (8,226,339) (2,169,189) - (2,169,189) (3,419,413) - (3,419,413) 1,877,978-1,877,978 (3,391,708) - (3,391,708) (194,603,810) - (194,603,810) - 3,801,801 3,801,801-1,457,168 1,457, , ,018 - (1,972,206) (1,972,206) - 3,513,781 3,513,781 (194,603,810) 3,513,781 (191,090,029) $ 5,338 (196,583) (191,245) 101,075, ,075,597-59,450,389-59,450,389-1,322,266-1,322,266-2,661,569-2,661,569-16,106,947-16,106,947-7,357,972-7,357,972-8,395,715-8,395,715-2,044,436-2,044,436-50,379-50,379-1,347, ,402 1,525,193 30,730 8,131, ,908 8,531,003 42,391 (762,672) 762, ,181,484 1,339, ,521,466 73,121 12,577,674 4,853,763 17,431,437 (118,124) 570,804,071 68,493, ,297,922 18,230,902 $ 583,381,745 $ 73,347,614 $ 656,729,359 $ 18,112,778 25

44 BALANCE SHEET - GOVERNMENTAL FUNDS For the Year Ended September 30, 2014 General Fund - County Wide Disaster Recovery Fund Local Option Sales Tax Fund ASSETS Cash and Cash Equivalents $ 25,364,312 $ 4,097,113 $ 33,902,197 Investments 23,182,372 5,101,312 42,211,595 Accounts Receivable 1,131, Accrued Interest Receivable 262, Due from Other Funds 1,124,328-1,202 Advances Receivable from Other Funds ,668,557 Due from Other Governments 5,285, ,425 5,132,177 Inventories 388, Other Assets 4,000,155 75,234 5,103,140 Total Assets $ 60,739,433 $ 9,680,084 $ 98,018,868 LIABILITIES Accounts Payable $ 2,100,566 $ 2,389,448 $ 2,604,349 Contracts Payable 46,972 93, ,201 Accrued Liabilities 5,095,792 39,297 39,059 Due to Other Funds 491,559 1,202 - Advances Payable to Other Funds - 10,993,433 1,736,984 Due to Other Governments 3,002, Deposits 173,773-1,610 Unearned Revenue 118, ,490 Other Current Liabilities 7,654, Total Liabilities 18,684,430 13,516,624 5,793,693 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Capital Lease 3,967, Total deferred inflow of resources 3,967, FUND BALANCES (deficits): Nonspendable: Inventories 388, Long Term Other Assets 3,979,016-5,103,140 Restricted for: Court Related Functions Community Service Debt Service Economic & Community Development ,833,776 Fire & Rescue Health Services Inmate Welfare Law Enforcement Library Mass Transit System Public Safety Records Modernization Tech Resource Conservation Road Acqusition & Construction Housing Assistance Tourism Transportation & Drainage Improvements ,288,259 Transportation Maintenance Committed to: Community Service Infrastructure Maintenance Public Safety Transportation Maintenance Assigned to: Subsequent Year's Budget 10,073, Unassigned 23,647,226 (3,836,540) - Total Fund Balances 38,087,975 (3,836,540) 92,225,175 Total Liabilities, deferred inflows of resources, and Fund Balance (deficit) The notes to the financial statements are an integral part of the financial statements. $ 60,739,433 $ 9,680,084 $ 98,018,868 26

45 Nonmajor Governmental Funds Total Governmental Funds $ 26,166,763 $ 89,530,385 27,605,519 98,100, ,029 1,993, , ,726 1,343,256-11,668,557 4,303,976 15,128, , ,383-9,178,529 $ 59,662,046 $ 228,100,431 $ 4,193,680 $ 11,288, ,269 1,068,686 1,190,443 6,364,591 1,000,009 1,492, ,124 13,405,541 1,008,849 4,011, , , ,697 1,074,400-7,654,879 8,662,436 46,657,183-3,967,028-3,967, , ,383-9,082,156 4,240,911 4,240, , ,180 2,060,290 2,060,290 4,748,895 18,582,671 4,829,063 4,829,063 16,327 16,327 1,005,494 1,005, , ,244 1,338,621 1,338, , ,503 2,644,209 2,644,209 2,755,849 2,755, , , ,011,282 3,011,282 5,864,172 5,864,172 1,877,828 75,166, , ,825 1,424,269 1,424,269 8,387,441 8,387,441 1,957,801 1,957,801 2,497,207 2,497,207-10,073,383-19,810,686 50,999, ,476,220 $ 59,662,046 $ 228,100,431 27

46 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 $ 177,476,220 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 governmental funds. The cost of the assets is $1,183,810,188 and the accumulated depreciation and amortization is $635,658,413. The difference does not include the net capital assets of the internal service funds $876,855 which are included below. 548,151,775 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 are included in governmental activities in the Statement of Net Position. 7,941,242 At the governmental fund level, certain other long term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the funds 2,415,526 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 $7,220,062 which is included above. Long-term liabilities at year-end consist of: Bonds payable 46,780,000 Notes payable 70,528,000 Pollution Remediation 375,000 Compensated absences 28,595,707 Other post employment benefits 8,954,610 (155,233,317) Deferred Outflow of resources: Deferred charge on refunding (to be amortized as interest expense) 2,630,299 Total net position of governmental activities $ 583,381,745 The notes to the financial statements are an integral part of the financial statements. 28

47 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS September 30, 2014 General Fund - County Wide Disaster Recovery Fund Local Option Sales Tax Fund REVENUES Taxes $ 98,907,750 $ - $ 37,714,910 Permits and Fees Franchise Fees 12,863, Special Assessments 963, Intergovernmental Revenues 30,994,790 4,472,643 4,144,175 Charges for Services 9,762, ,842 Judgments and Fines 1,289, Investment Income 538,228 11, ,129 Miscellaneous Revenues 4,003,009 4,053,035 1,010,289 Total Revenues 159,322,905 8,537,432 43,563,345 EXPENDITURES Current: General Government 47,044,692-5,719,399 Public Safety 84,622,487 8,393,813 - Physical Environment 1,160, Transportation ,587 Economic Environment Human Services 2,084,239-75,268 Culture/Recreation 1,256,367-1,216,171 Court-Related 6,476, Debt Service: Principal Retirement Interest and Fiscal Charges - - 3,534 Capital Outlay ,299,451 Total Expenditures 142,645,259 8,393,813 38,074,410 Excess (Deficiency) of Revenues Over (Under) Expenditures 16,677, ,619 5,488,935 OTHER FINANCING SOURCES (USES) Transfers In 1,778, Transfers (Out) (12,988,097) - (1,096,081) Issuance of Notes Payable ,500,000 Total Other Financing Sources and (Uses) (11,209,786) - 19,403,919 Net Change in Fund Balances 5,467, ,619 24,892,854 Fund Balances - Beginning 32,620,115 (3,980,159) 67,332,321 Fund Balances - Ending $ 38,087,975 $ (3,836,540) $ 92,225,175 The notes to the financial statements are an integral part of the financial statements. 29

48 Nonmajor Governmental Funds Total Governmental Funds $ 25,333,142 $ 161,955, , ,927 1,744,560 14,608,399 12,717,015 13,680,261 22,725,540 62,337,148 11,710,203 21,677,255 1,117,068 2,406, ,583 1,343,694 2,868,606 11,934,939 78,756, ,180,326 3,314,668 56,078,759 26,682, ,698, ,378 1,731,274 26,823,083 27,583,670 12,796,024 12,796, ,231 2,336,738 4,394,178 6,866,716 3,594,637 10,071,215 4,397,000 4,397,000 3,237,663 3,241,197 1,856,675 32,156,126 87,843, ,957,155 (9,087,029) 13,223,171 16,552,682 18,330,993 (5,009,487) (19,093,665) - 20,500,000 11,543,195 19,737,328 2,456,166 32,960,499 48,543, ,515,721 $ 50,999,610 $ 177,476,220 30

49 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 $ 32,960,499 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 ($41,399,471) does not exceed depreciation ($43,313,526) in the current period. Total capital additions consist of capital expenditures of $39,119,324 and non-cash contributions of $2,280,147. (1,914,055) Collections of principal on long-term sales type lease receivable provides current financial (59,979) resources to governmental funds. 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, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The amounts of the items that make up these differences in the treatment of long-term debt and related items are: Debt issued or incurred: Issuance of Notes (20,500,000) Principal repayments 4,397,000 Amortization of deferred discount and deferred charge on refunding (150,511) (16,253,511) Continued 31

50 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, however, 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 (754,202) Changes in other post employment benefits (824,628) Changes in pollution remediation 725,000 (853,830) 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. (177,877) The internal service fund is used by management to charge the costs of risk management and other services to other funds. The net income of the internal service fund is reported with governmental activities. (1,123,573) Change in net position of governmental activities $ 12,577,674 The notes to the financial statements are an integral part of the financial statements. 32

51 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 Actual Variance with Final Budget - Original Final Amounts Over (Under) REVENUES Taxes $ 94,943,409 $ 94,943,409 $ 98,907,750 $ 3,964,341 Franchise Fees 11,124,975 11,124,975 12,863,839 1,738,864 Special Assessments 947, , ,246 15,420 Intergovernmental Revenues 34,010,709 33,860,709 30,994,790 (2,865,919) Charges for Services 6,119,431 6,119,640 9,762,210 3,642,570 Judgments and Fines 12,825 12,825 1,289,833 1,277,008 Investment Income , ,228 Miscellaneous Revenues 1,676,141 2,261,350 4,003,009 1,741,659 Total Revenues 148,835, ,270, ,322,905 10,052,171 EXPENDITURES Current: General Government 70,939,540 71,635,232 47,044,692 24,590,540 Public Safety 83,560,475 86,194,500 84,622,487 1,572,013 Physical Environment 1,164,346 1,210,184 1,160,896 49,288 Human Services 2,144,635 2,225,600 2,084, ,361 Culture/Recreation 1,299,947 1,328,495 1,256,367 72,128 Court-Related 6,849,739 6,699,739 6,476, ,161 Total Expenditures 165,958, ,293, ,645,259 26,648,491 Excess (Deficiency) of Revenues Over (Under) Expenditures (17,123,366) (20,023,016) 16,677,646 36,700,662 OTHER FINANCING SOURCES (USES) Transfers In 1,775,978 (1,080,709) 1,778,311 2,859,020 Transfers (Out) (14,084,164) (11,305,764) (12,988,097) (1,682,333) Total Other Financing Sources and (Uses) (12,308,186) (12,386,473) (11,209,786) 1,176,687 Net Change in Fund Balance (29,431,552) (32,409,489) 5,467,860 37,877,349 Fund Balance - Beginning 29,431,552 32,409,489 32,620, ,626 Fund Balance - Ending $ - $ - $ 38,087,975 $ 38,087,975 The notes to the financial statements are an integral part of the financial statements. 33

52 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL DISASTER RECOVERY FUND For the Year Ended September 30, 2014 Budgeted Amounts Actual Variance with Final Budget - Original Final Amounts Over (Under) REVENUES Intergovernmental Revenues $ - $ - $ 4,472,643 $ 4,472,643 Investment Income ,754 11,754 Miscellaneous Revenues - - 4,053,035 4,053,035 Total Revenues - - 8,537,432 8,537,432 EXPENDITURES Current: Public Safety - 10,000,000 8,393,813 1,606,187 Total Expenditures - 10,000,000 8,393,813 1,606,187 Excess (Deficiency) of Revenues Over (Under) Expenditures - (10,000,000) 143,619 10,143,619 SOURCES (USES) Issuance of Loan Payable - 10,000, Total Other Financing Sources and (Uses) - 10,000, Net Change in Fund Balance ,619 10,143,619 Fund Balance - Beginning - - (3,980,159) (3,980,159) Fund Balance - Ending $ - $ - $ (3,836,540) $ 6,163,460 The notes to the financial statements are an integral part of the financial statements. 34

53 STATEMENT OF NET POSITION PROPRIETARY FUNDS September 30, 2014 Solid Waste Fund Business-type Activities - Enterprise Funds Emergency Medical Services Fund Nonmajor Enterprise Funds Totals Governmental Activities - Internal Service Funds ASSETS Current Assets: Cash and Cash Equivalents $ 820,443 $ 6,064,539 $ 2,646,507 $ 9,531,489 $ 6,940,438 Restricted Assets Available for Current Liabilities 340, , ,385 - Investments 10,327,771 7,550,579 1,870,123 19,748,473 7,540,337 Accounts Receivable,Net of Allowance - for Uncollectable Accounts 1,552,490 4,008, ,515 5,662,596 1,106,596 Due from Other Funds ,992 Due from Other Governments - - 1,100 1, ,622 Inventories - 221,072 62, , ,522 Prepaid Items ,929 19, ,812 Total Current Assets 13,041,223 17,844,781 4,941,597 35,827,601 16,676,319 Noncurrent Assets: Restricted Assets: Escrow Deposits - restricted 101, , ,565 - Saufley C&D - restricted 533, ,166 - Landfill Escrow 6,842, ,842,055 - Less: Portion Classified as Current (340,519) - (239,866) (580,385) - Total restricted assets 7,136, ,136,401 - Advances Due from Other Funds ,299,841 Capital Assets: Land 5,786,826 6,443-5,793,269 - Buildings 10,701,163 1,100,349 25,743,235 37,544, ,564 Improvements Other than Buildings 41,637,460 12,777 3,034,494 44,684, ,373 Machinery, Equipment and Vehicles 12,323,022 6,943,275 2,612,070 21,878, ,085 Intangibles 15, , ,255 - Less: Accumulated Depreciation (29,673,069) (5,065,930) (24,401,200) (59,140,199) (741,167) Total Capital Assets (Net) 40,790,402 3,173,169 6,988,599 50,952, ,855 Total Noncurrent Assets 47,926,803 3,173,169 6,988,599 58,088,571 4,176,696 Total Assets 60,968,026 21,017,950 11,930,196 93,916,172 20,853,015 Continued 35

54 STATEMENT OF NET POSITION - Continued Solid Waste Fund PROPRIETARY FUNDS September 30, 2014 Business-type Activities - Enterprise Funds Emergency Medical Services Fund Nonmajor Enterprise Funds Totals Governmental Activities - Internal Service Funds LIABILITIES Current Liabilities: Accounts Payable 228,522 28, , ,715 $ 4,523,461 Accrued Liabilities 95, ,866 66, ,802 31,643 Compensated Absences Payable 52,117 47,426 32, , ,399 Estimated Claims Payable ,728,100 Due to Other Funds ,478 Due to Other Governments 124 2,523 48,288 50,935 1,068,194 Deposits 2,022-23,679 25,701 62,935 Other Current Liabilities - - 1,167,456 1,167,456 - Current Liabilities Payable from Restricted Assets: Landfill Closure Costs Payable 238, ,820 - Escrow Deposits - restricted 101, , ,565 - Total Current Liabilities 719, ,197 2,048,510 3,143,774 7,626,210 Noncurrent Liabilities: Compensated Absences Payable 469, , ,130 1,186, ,162 Other Post Employment Benefits 109, ,561 74, ,210 36,420 Estimated Claims Payable ,375,981 Advances To Other Funds 1,562, ,562,857 - Landfill Closure Costs Payable 14,187, ,187,701 - Total Noncurrent Liabilities 16,328, , ,654 17,424,784 5,285,563 Total Liabilities 17,047,805 1,107,589 2,413,164 20,568,558 12,911,773 NET POSITION Net Investment in Capital Assets 40,790,402 3,173,169 6,988,599 50,952, ,855 Unrestricted (deficit) 3,129,819 16,737,192 2,528,433 22,395,444 7,064,387 Total Net Position $ 43,920,221 $ 19,910,361 $ 9,517,032 $ 73,347,614 $ 7,941,242 The notes to the financial statements are an integral part of the financial statements. 36

55 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended September 30, 2014 Business-type Activities - Enterprise Funds Solid Waste Fund Emergency Medical Services Fund Nonmajor Enterprise Funds Total Governmental Activities - Internal Service Funds Operating Revenues: Charges for Services $ 13,617,833 $ 12,158,315 $ 6,857,148 $ 32,633,296 $ 44,133,296 Miscellaneous Revenues 330,677 54,909 14, ,908 - Total Operating Revenues 13,948,510 12,213,224 6,871,470 33,033,204 44,133,296 Operating Expenses: Personal Services 2,656,447 7,701,123 1,705,234 12,062,804 1,357,479 Contracted Services 593, ,584 5,378,328 6,147,473 - Claims Incurred and change in estimate ,110,732 Supplies and Materials 858,945 1,019,670 69,645 1,948,260 - Repairs and Maintenance 612, , ,768 1,428,599 7,407,769 Other Services and Charges 1,410, , ,630 2,006,832 6,009,507 Depreciation 2,823, , ,650 4,571,241 81,080 Provision for Closure and Long Term Care 708, ,892 - Premiums/Claims Expense 250, ,499 99, ,363 24,356,081 Total Operating Expenses 9,915,511 10,795,626 8,629,327 29,340,464 45,322,648 Operating Income (Loss) 4,032,999 1,417,598 (1,757,857) 3,692,740 (1,189,352) Nonoperating Revenues (Expenses): Grants 102, ,789 - Investment Income 86,093 74,828 16, ,402 64,076 Interest and Fiscal Charges Expense (3,310) - - (3,310) - Gain (Loss) on Disposal of Capital Assets - - (9,903) (9,903) - Total Nonoperating Revenues (Expenses) 185,572 74,828 6, ,978 64,076 Income (Loss) Before Transfers and Contributions 4,218,571 1,492,426 (1,751,279) 3,959,718 (1,125,276) Transfer In - - 1,300,000 1,300,000 - Transfer (Out) (313,114) (224,214) - (537,328) - Capital Contributions - 94,479 36, ,373 1,703 Change in Net Position 3,905,457 1,362,691 (414,385) 4,853,763 (1,123,573) Net Position - Beginning 40,014,764 18,547,670 9,931,417 68,493,851 9,064,815 Net Position - Ending $ 43,920,221 $ 19,910,361 $ 9,517,032 $ 73,347,614 $ 7,941,242 37

56 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended September 30, 2014 Business-type Activities - Enterprise Funds Solid Waste Fund Emergency Medical Services Fund Nonmajor Enterprise Funds Total Governmental Activities - Internal Service Funds Cash Flows from Operating Activities Receipts from customers and users $ 13,774,750 $ 11,787,348 $ 7,602,793 $ 33,164,891 $ 43,860,667 Payments to suppliers (3,751,276) (2,237,284) (6,218,309) (12,206,869) (40,889,628) Payments to employees (2,618,897) (7,677,453) (1,697,680) (11,994,030) (789,192) Net Cash Provided (Used) by Operating Activities 7,404,577 1,872,611 (313,196) 8,963,992 2,181,847 Cash Flows from Noncapital Financing Activities Transfers to other funds (313,114) (224,214) - (537,328) - Transfers from other funds - - 1,300,000 1,300,000 - Advances due to/from other funds (784,739) - - (784,739) 1,577,542 Subsidy from federal/state grants 102, ,789 - Net Cash Provided (Used) by Noncapital Financing Activities (995,064) (224,214) 1,300,000 80,722 1,577,542 Cash Flows from Capital and Related Financing Activities Acquisition/construction of capital assets (1,673,062) (1,166,997) (142,986) (2,983,045) (58,265) Proceeds from disposal of capital assets (60,590) 143,205-82,615 - Landfill closure costs paid (116,358) - - (116,358) - Net Cash (Used) by Capital and Related Financing Activities (1,850,010) (1,023,792) (142,986) (3,016,788) (58,265) Cash Flows from Investing Activities Sale (purchase) of investments (3,148,943) 2,082, ,626 (691,116) (1,305,097) Interest received 86,093 74,828 16, ,402 64,076 Net Cash Provided (Used) by Investing Activities (3,062,850) 2,157, ,107 (513,714) (1,241,021) Net Increase (Decrease) in Cash and Cash Equivalents 1,496,653 2,781,634 1,235,925 5,514,212 2,460,103 Cash and cash equivalents at beginning of year 6,800,710 3,282,905 1,650,448 11,734,063 4,480,335 Cash and cash equivalents at end of year $ 8,297,363 $ 6,064,539 $ 2,886,373 $ 17,248,275 $ 6,940,438 Cash and Cash Equivalents Classified As: Current assets $ 820,443 $ 6,064,539 $ 2,646,507 $ 9,531,489 $ 6,940,438 Current restricted assets 340, , ,385 - Noncurrent restricted assets 7,136, ,136,401 - Total Cash and Cash Equivalents $ 8,297,363 $ 6,064,539 $ 2,886,373 $ 17,248,275 $ 6,940,438 Continued 38

57 STATEMENT OF CASH FLOWS - Continued PROPRIETARY FUNDS For the Year Ended September 30, 2014 Business-type Activities - Enterprise Funds Solid Waste Fund Emergency Medical Services Fund Nonmajor Enterprise Funds Total Governmental Activities - Internal Service Funds Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating Income (Loss) $ 4,032,999 $ 1,417,598 $ (1,757,857) $ 3,692,740 $ (1,189,352) Depreciation 2,823, , ,650 4,571,241 81,080 Provision for closure and postclosure 708, ,892 - Change in Assets and Liabilities: Accounts receivable (178,363) (425,876) 50,382 (553,857) 240,138 Inventories - (25,836) (15,205) (41,041) 25,583 Prepaids - - (15,427) (15,427) (23,577) Accounts payable 3,770 (19,833) (116,887) (132,950) 2,376,435 Contracts payable (28,771) - (18,703) (47,474) (9,362) Accrued liabilities 19,438 50,587 6,782 76, Due to other governments (92) 2,286 25,356 27,550 1,068,194 Customer deposits 4,603-7,827 12,430 3,830 Other current liabilities , ,114 - Compensated absences 27,588 25,303 13,423 66, ,685 Post employment benefits (9,476) (52,220) (12,651) (74,347) (49,987) Claims payable (442,812) Total Adjustments 3,371, ,013 1,444,661 5,271,252 3,371,199 Net Cash Provided (Used) by Operating Activities $ 7,404,577 $ 1,872,611 $ (313,196) $ 8,963,992 $ 2,181,847 Schedule of non-cash capital activities: Contributions of Capital Assets $ - $ 94,479 $ 36,894 $ 131,373 $ 1,703 39

58 STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS September 30, 2014 ASSETS Cash and Cash Equivalents $ 12,778,457 Accounts Receivable 281,577 Total Assets $ 13,060,034 LIABILITIES Due to Other Governments $ 8,214,682 Due to Individuals 2,210,051 Other Current Liabilities 2,635,301 Total Liabilities $ 13,060,034 The notes to the financial statements are an integral part of the financial statements 40

59 STATEMENT OF NET POSITION COMPONENT UNITS September 30, 2014 Governmental Activities Escambia County Law Library Board Business-Type Activities Santa Rosa Island Authority Total Component Units ASSETS Cash and Cash Equivalents $ 55,412 $ 3,994,380 $ 4,049,792 Investments - 1,513,575 1,513,575 Accounts Receivable , ,647 Due from Other Governments 22,800 51,300 74,100 Prepaid Items - 77,790 77,790 Total Current Assets 78,574 6,147,330 6,225,904 Noncurrent Assets: Restricted Assets: Cash and Cash Equivalents - 4,262,237 4,262,237 Investments - 1,489 1,489 Capital Assets, Net of Depreciation 8,715 11,153,530 11,162,245 Total Noncurrent Assets 8,715 15,417,256 15,425,971 Total Assets 87,289 21,564,586 21,651,875 LIABILITIES Accounts Payable - 348, ,770 Accrued Liabilities 6, , ,716 Due to Other Governments - 121, ,649 Unearned Revenue - 1,698,825 1,698,825 Obligations Under Capital Leases - 72,984 72,984 Total Current Liabilities 6,281 2,359,663 2,365,944 Noncurrent Liabilities: Compensated Absences - 258, ,582 Other Post Employment Benefits - 172, ,612 Total Noncurrent Liabilities - 431, ,194 Total Liabilities 6,281 2,790,857 2,797,138 DEFERRED INFLOW OF RESOURCES Unearned Revenues - 121, ,007 Unearned Consideration fees - 620, ,952 Total Deferred Inflow of Resources - 741, ,959 NET POSITION Invested in Capital Assets 8,715 11,045,993 11,054,708 Restricted for Capital Improvements - 2,562,756 2,562,756 Unrestricted 72,293 4,423,021 4,495,314 Total Net Position $ 81,008 $ 18,031,770 $ 18,112,778 The notes to the financial statements are an integral part of the financial statements. 41

60 STATEMENT OF ACTIVITIES - COMPONENT UNITS For the Year Ended September 30, 2014 Governmental Activities Escambia County Law Library Board Business-Type Activities Santa Rosa Island Authority Total Component Units EXPENSES Governmental Activites: Court Related $ 80,284 $ - $ 80,284 Business Type Activities: Operating Expenses - 8,583,596 8,583,596 Total Program Expenses 80,284 8,583,596 8,663,880 PROGRAM REVENUES Charges for Services 85,622 8,190,630 8,276,252 Operating Grants and Contributions Capital Grants and Contributions - 196, ,383 Net Program (Revenue) Expenses (5,338) 196, ,245 GENERAL REVENUES Investment Income - 30,730 30,730 Sale of Assets - 11,777 11,777 Miscellaneous ,102 30,614 Total General Revenues ,609 73,121 Change in Net Position 5,850 (123,974) (118,124) Net Position - Beginning 75,158 18,155,744 18,230,902 Net Position - Ending $ 81,008 $ 18,031,770 $ 18,112,778 The notes to the financial statements are an integral part of the financial statements. 42

61 NOTES TO FINANCIAL STATEMENTS September 30, 2014 INDEX TO NOTES PAGE NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Government-Wide Financial Statements Financial Reporting Entity Basis of Presentation Government-Wide and Fund Financial Statements Measurement Focus and Basis of Accounting Budgetary Information Property Taxes Cash and Cash Equivalents Investments Inventories and Prepaid Items Restricted Assets Accounts Receivable Interfund Transactions Interfund Payables and Receivables Capital Assets Unearned Revenues Deferred Outflows/Inflows of Resources Self-Insurance Claims Landfill Closure and Postclosure Care Payable Long Term Obligations Compensated Absences Other Post-Employment Benefits (OPEB) 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 CAPITAL ASSETS Changes in Capital Assets Summaries of Capital Assets Construction and Other Contractual Commitments Discretely Presented Component Units NOTE 4 INTERFUND RECEIVABLES, PAYABLES, ADVANCES AND TRANSFERS NOTE 5 OTHER ASSETS PEDC Receivable IHMC Note Receivable PDC Capital Lease Receivable Leasing Arrangements NOTE 6 LONG-TERM LIABILITIES Schedule of Changes in Long-Term Liabilities Bonds and Notes Payable Pledged Revenues Compensated Absences Other Post Employment Benefits (OPEB) Debt Service Requirements Long-Term Debt Bonds and Notes Conduit Debt Obligations Landfill Closure and Postclosure Care Liability Pollution Remediation Obligation

62 NOTES TO FINANCIAL STATEMENTS September 30, 2014 INDEX TO NOTES (CONTINUED) PAGE NOTE 7 RISK MANAGEMENT PROGRAM NOTE 8 RETIREMENT SYSTEM NOTE 9 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS NOTE 10 NET POSITION RESTRICTED FOR OTHER PURPOSES NOTE 11 COMMITMENTS AND CONTINGENCIES Litigation Flood Event Grants Deficit Fund Equity NOTE 12 SUBSEQUENT EVENTS

63 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of Government-wide Financial Statements The financial statements of Escambia 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. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all nonfiduciary activities of the primary government and its component units. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. Significant County accounting policies are described below. B. Financial Reporting Entity Escambia County, Florida (the County) is a political subdivision of the State of Florida created pursuant to Chapter 7 of the Florida Statutes. The County is governed by a five member Board of County Commissioners (the Board), elected from single-member districts. The Board has no powers other than those expressly vested in it by State Statute. In addition to the Board, there are five elected Constitutional Officers: pursuant to Article 8, Section 1(d), of the Constitution of the State of Florida; the Clerk of the Circuit Court 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 combining financial statements include the operations of the Board of County Commissioners, Clerk of the Circuit Court and Comptroller, Sheriff, Tax Collector, Property Appraiser, Supervisor of Elections and those separately administered organizations for which the government is considered to be financially accountable. Blended component units are, in substance, part of the primary government s operations, even though they are legally separate entities. Thus, blended component units are appropriately presented as funds of the primary government. Discretely presented component units are reported in a separate column in the government-wide financial statements to emphasize that they are legally separate from the government. Blended Component Unit Community Redevelopment Agency (CRA) Pursuant to Florida Statutes section 163 Part III, the Community Redevelopment Act of 1969 authorized governments to use tax increment financing as a means for community redevelopment. The primary purpose of this act is to provide local governments with a source of funds to revitalize the deteriorated portions of their communities. In 1995, the Board of County Commissioners adopted Ordinance No which established the Community Redevelopment Agency (CRA) of Escambia County. Five redevelopment areas are included under the CRA jurisdiction. The Board serves as the CRA Board and has all rights, powers, duties, privileges and immunities authorized by the Act. The CRA, has been independently audited, and is reported as a nonmajor special revenue fund in the fund financial statements of the County. A copy of the CRA Independent Audit report may be found at the Community Redevelopment Agency Office, 221 Palafox Place; Suite 305, Pensacola Florida or online at 45

64 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Discretely Presented Component Units Governmental Fund Type: Escambia County Law Library Board The Escambia County Law Library Board (Law Library), created under Special Act, Chapter , Laws of Florida, provides for the maintenance of a central law library for the use of citizens, county officials, judges and officers of the courts of Escambia County. The County establishes the fees charged and collected on court actions in support of the Law Library, therefore the County is financially accountable. The Law Library is located in the M.C. Blanchard Judicial Building. The Law Library is composed of two (2) circuit judges, two (2) county judges and one (1) lawyer appointed by the local Bar Association. The operations of the Law Library are reported in the Escambia County Law Library Board, a special revenue fund, as a discretely presented component unit. Financial statements for the Escambia County Law Library Board can be obtained from the Library staff at 190 West Government Street, Pensacola, Florida Proprietary Fund Type: Santa Rosa Island Authority (SRIA) The Santa Rosa Island Authority (SRIA) was established by the provisions of Chapter , Laws of Florida, Special Acts of 1947, as amended. The County appoints five (5) members of the Authority s six (6) member Board, and one (1) member is elected by the eligible voters who are full time residents of the Island. The County approves the SRIA s budget and issuance of debt. The County has veto power over decisions of the SRIA. The SRIA serves as the County s leasing agent for property on Santa Rosa Island owned by the County. The operations of SRIA are reported in the SRIA Fund, a discrete component unit in this report. Financial statements for the SRIA can be obtained at 1 Via Deluna, Pensacola Beach, Florida Joint Ventures: As defined in Governmental Accounting Standards Board (GASB) Statement No. 14, a joint venture is a separate legal entity or other organization that results from a contractual arrangement (or interlocal agreement) and that is owned, operated or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain (a) an on-going financial interest or (b) an on-going financial responsibility. The County participates and provides financial support to the following non-equity joint ventures: Human Relations Commission (HRC) The Commission was created by an Interlocal Agreement between Escambia County and the City of Pensacola in 1978, pursuant to Florida Statutes, Chapter , for the purpose of being responsible for the promotion of fair treatment and equal opportunity to all citizens of the local community. The Commission is composed of nine (9) members; four (4) selected by the County and four (4) selected by the City of Pensacola, with one (1) additional member jointly selected by the preceding eight. The County does not control budgeting or financing for the Commission. Separate financial statements are available from the Commission at 2257 Baylen Street, Pensacola, Florida Pensacola Escambia County Promotion and Development Commission (PEDC) This Commission was created in 1967 by Chapter , Laws of Florida, amended in 1980 by Chapter , to promote and develop tourism and industry in Escambia County and in the City of Pensacola. The nine (9) member Commission consists of the President of the Chamber of Commerce, two (2) members of the Pensacola City Council, two (2) members of the Escambia County Commission, one (1) member of the Century City Council, one (1) representative of the Committee of 100 or the Tourist Advisory Council, one (1) at-large member appointed by the Pensacola City Council and one (1) atlarge member appointed by the Escambia County Commission. The County and the City of Pensacola each contribute funds annually for the operation of the Commission, but neither has control of the budget or finances of the Commission. Separate financial statements are available from the Pensacola Escambia County Promotion and Development Commission at 117 West Garden Street, Pensacola, Florida

65 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Summary financial statements as of September 30, 2014, for the joint ventures are as follows: STATEMENTS OF NET POSITION SEPTEMBER 30, 2014 HRC PEDC Assets $ 12,790 $ 6,507,275 Liabilities 2,498 2,156,559 Net Position Net investment in capital assets 43 - Restricted: - 61,198 Unrestricted: Committed - 52,309 Unassigned 10,249 4,237,209 Total net position $ 10,292 $ 4,350,716 STATEMENTS OF ACTIVITIES FISCAL YEAR ENDED SEPTEMBER 30, 2014 HRC PEDC Revenues $ 168,084 $ 291,193 Expenses (171,832) (288,681) Change in net position (3,748) 2,512 Net position - beginning 14,040 4,348,204 Net position - ending $ 10,292 $ 4,350,716 C. Basis of Presentation Government-wide and Fund Financial Statements The basic financial statements consist of the government-wide (based on the County as a whole, including its component units) and fund financial statements. Both sets of statements categorize primary activities as either governmental or business-type activities. The government-wide financial statements include a statement of net position and a statement of activities which report on the government as a whole and provide a consolidated financial picture of the government. As a general rule, the effect of interfund activity has been eliminated from the governmentwide financial statements. Interfund activities are eliminated to avoid distorted financial results. The amounts reported as internal balances represent the residual amounts due between governmental and business-type activities. Fiduciary Funds of the government are also eliminated from this presentation since these resources are not available for general government funding purposes. The statement of activities reports functional categories of programs provided by the County, and demonstrate how and to what degree those programs are supported by specific revenue. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on external fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. 47

66 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The statement of activities demonstrates the degree to which the direct expenses of a given program are supported by specific revenues. Direct expenses are those that are clearly identifiable with a specific program. 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. General revenues consist of all taxes and other items collected that help support all functions of Escambia County government. Individual fund financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The County reports the following major governmental funds: The General Fund is the government s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The general fund includes the Board of County Commissioners, Clerk of Circuit Court and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector. The Disaster Recovery Fund accounts for financing provided from various grants, or reimbursements to aid the County s recovery from either natural or man-made disasters. Due to the nature of this major fund, the County generally adopts an appropriated budget of zero. The Local Option Sales Tax Fund (LOST) accounts for monies collected pursuant to Florida Statutes , which authorizes the County to impose a one percent (1%) local option infrastructure sales surtax upon taxable transactions occurring within Escambia County, to provide for road and drainage projects and improvements, recreation projects, public safety, expansion of jail and court facilities, and community redevelopment projects. This tax was approved by referendum on March 10, 1992, and would expire December 31, 2017, unless extended by referendum. On November 4, 2014, this tax was extended by referendum through December 31, 2028, as permitted by law. The County reports the following major proprietary funds: The Solid Waste Fund accounts for solid waste disposal (landfill) operations, primarily financed through franchise fees and user charges. The Emergency Medical Service Fund accounts for the cost of emergency medical services provided in Escambia County. All activities necessary to provide such services are accounted for in this fund. Additionally, the government reports the following fund types: The Internal Service Fund accounts for risk management activities, activities for garage and fuel services provided to County departments, and for administration of employee benefits. Additionally, the internal service fund is used to account for balances and activity related to compensated absences policies of the Clerk of the Circuit Court and Comptroller, for court related activities. Agency Funds are custodial in nature, and are therefore excluded from the governmental-wide financial statements. These funds are used to account for assets held by the County as an agent for individuals, private organizations and governments. Agency funds are utilized by the Clerk of the Circuit Court and Comptroller, the Tax Collector and the Sheriff. 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, property taxes and fees for licenses. 48

67 NOTES TO FINANCIAL STATEMENTS September 30, 2014 D. Measurement Focus and Basis of Accounting The government-wide financial statements and the proprietary fund and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the 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 County considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. State shared revenues, sales taxes, franchise taxes, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Expenditures generally are recorded when a liability is incurred, except debt service expenditures and expenditures related to compensated absences and claims and judgments, which are recorded only when payment is due. Capital asset acquisitions are recorded as expenditures in governmental funds. Monies received from issuing long-term debt and acquisitions under capital leases are reported as other financing sources. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year end). Escambia County allocates indirect costs comprised of administrative overhead costs to functional activities using various allocation charge methods. Therefore, expenses reported for functional activities include these allocated indirect costs. Elimination of these charges would distort the direct costs of the functions concerned. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements, with the exception of administrative overhead components as discussed above. Amounts reported as program revenue include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions, including special assessments. All taxes, including those dedicated for specific purposes, and others internally dedicated resources are reported as general revenues rather than as program revenue. Internally dedicated resources are reported as general revenues rather than program revenues. Proprietary fund financial statements are reported using economic resource measurement focus and the accrual basis of accounting, distinguishing operating revenues and expenses from non-operating 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 are charges to customers for sales and services. Operating expenses for enterprise funds and the internal service fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. 49

68 NOTES TO FINANCIAL STATEMENTS September 30, 2014 E. Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles as required by Florida Statute 129 for all governmental funds. The Disaster Recovery Fund which was not expected to have activity in fiscal year 2014 was adopted with an original budget appropriation of zero. On or before May 1 of each year, the Clerk of the Circuit Court and Comptroller, Property Appraiser, Supervisor of Elections, Sheriff and Tax Collector each submit to the Board of County Commissioners a tentative budget for the ensuing fiscal year. Within fifteen days after certification of the ad valorem tax roll by the Property Appraiser, the County s Office of Management and Budget submits to the Board of County Commissioners a proposed budget for the fiscal year commencing the following October 1 st. Pursuant to the provisions of Section , Florida Statutes, the proposed budgets as submitted contain balanced statements of estimated revenue and proposed appropriations for each fund required to be presented by law or sound financial practice, including the general, special revenue, debt service, and capital projects funds. The Board holds public hearings and a final budget must be prepared and adopted no later than September 30. The County s budget is legally enacted through passage of a resolution. The appropriated budget is prepared by fund, function and department. The Office of Management and Budget is authorized to transfer budgeted amounts within departments of a fund and between departments of a fund; however, the Board of County Commissioners must approve any revisions that alter the total expenditures of any fund. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level. The Board of County Commissioners approved supplemental budget amendments during the year that increased the original budget. 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. F. Property Taxes Under Florida law, the assessments of all properties and the collections of all county, municipal, and school board property taxes are consolidated in the offices of the County Property Appraiser and the County Tax Collector. The laws of the state regulating tax assessments are also designed to assure a consistent property valuation method statewide. Pursuant to the State Constitution, Florida Statutes permit counties to levy ad valorem taxes on real and tangible personal property taxes at a rate not to exceed 10 mills for countywide purposes, exclusive of taxes levied for the payments of bonds and taxes levied for periods of not longer than 2 years and approved by a vote of the electors. All property is assessed at 100% of just value. For fiscal year 2014, the County-wide operating millage rate was mills. The County-wide operating millage rate for the Library was.359 mills for a total of mills. The Law Enforcement MSTU rate is.685 for a total direct rate of mills. The tax levy of the County is established by the Board of County Commissioners prior to October 1 of each year and the Tax Collector incorporates the millage into the total tax levy, which includes the municipalities, special districts, and the County School Board tax requirements and produces the tax bill. All property is reassessed by the Property Appraiser, according to its fair market value on January 1 of each year. The certified assessment roll is delivered by the Property Appraiser to the Tax Collector. All property taxes are billed in arrears and become due and payable on November 1 of each year. All unpaid taxes become delinquent on April 1 following the year which they are assessed. The legal lien date is January 1 of each year. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January, and 1% in the month of February. 50

69 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Taxes paid in March are without discount. Tax certificates are sold for all delinquent taxes on real property. Virtually all unpaid taxes are collected via the sale of tax certificates prior to year end. 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. G. Cash and Cash Equivalents The County defines cash and cash equivalents as cash held at a depository and cash on hand for operating purposes and those investments which are short term and highly liquid. Generally, those investments have original maturities of three (3) months or less from the date of acquisition. The County maintains an equity in pooled cash fund. All monies which are not legally restricted to separate administration are pooled together for investment and are maintained on a daily transaction basis. Investment earnings are distributed in accordance with the participating funds relative equity. The County s cash deposits are held by banks that qualify as public depositories 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. H. Investments Investments for the County are reported at fair value (generally based on quoted market prices) except for the Florida Prime Investment Pool which is reported at amortized cost. Investments are pooled together for investment purposes while each individual funds and/or accounts are maintained on a daily transaction basis. Investment earnings are distributed in accordance with the participating funds relative equity. Such investments consist of Certificates of deposit, U.S. Treasury Securities, Federal Instruments, Commercial Paper, Corporate Notes and State and/or Local Government Debt. I. Inventories and Prepaid Items Inventories are valued at cost, using the first-in/first-out method. Annual inventory expenditures reflect supplies consumed. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. These payments are recorded as expenditures/expenses when consumed rather than when purchased. J. Restricted Assets The use of certain assets of both governmental and business-type activities are restricted by resolution or ordinance. Assets are designated as restricted since their use is limited. Restricted assets reported on the face of the statements represent escrow deposits for customers, Saufley Construction and Demolition (C&D) for the project associated with the Saufley Landfill closure, and the Landfill Escrow for the restricted portion of the landfill closure and post closure liability. K. Accounts Receivable Accounts Receivable are shown net of an allowance for uncollectible accounts. The Solid Waste Fund records an allowance for receivables older than 90 days, while the Internal Service Fund provides an allowance for receivables without collections during the past year. All other County funds record an allowance on accounts older than 120 days. Accounts in the General Fund consist primarily of franchise fees receivable. The receivables at the end of the fiscal year include an estimated total allowance for uncollectable accounts in the amount of $3.484 million. This allowance is comprised of $2.527 million for ambulance 51

70 NOTES TO FINANCIAL STATEMENTS September 30, 2014 receivables in the Emergency Medical Services Fund; $800,000 for the Internal Service Funds related to the self insurance third party receivables; $86,000 for the Local Option Sales Tax Fund; $39,900 for HUD- CDBG Housing Rehabilitation Fund and $28,500 for the Pensacola Bay Center Fund (Bay Center). L. Interfund Transactions 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 reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions are reported as transfers. M. 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 funds are restricted or committed. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances. N. Capital Assets Capital Assets, which include property, plant, equipment, intangibles, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or businesstype activities columns in the government-wide financial statements. Purchased or constructed assets are recorded at historical costs or estimated costs. Donated capital assets are recorded at estimated fair market value at the date of donation. The County capitalizes items costing $1,000 and having an estimated useful life in excess of one year. Buildings, public domain, and system infrastructure assets which represent major expenditures for such items as roads, water and sewer lines, landfill improvements, parks, and drainage systems are capitalized at historical cost. Major outlays for capital assets and improvements are capitalized as projects are constructed. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. 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. Depreciation has been provided using the straight-line method. The estimated useful lives of the various classes of depreciable capital assets are as follows: Buildings Improvements Infrastructure Equipment Intangibles years years years 3 10 years 3 5 years O. Unearned Revenues Unearned revenues include amounts collected before revenue recognition criteria are met. Expendituredriven grants and excess revenue for exchange type transactions are reported as unearned at the end of the fiscal year. 52

71 NOTES TO FINANCIAL STATEMENTS September 30, 2014 P. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statements element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. The County has only one item that qualifies for reporting in this category. It is the deferred charge on refunding reported in the government-wide statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The County has only one item that qualifies for reporting in this category. The Unavailable revenue for capital lease is deferred and recognized as in inflow of resources in the period that the amounts become available. The SRIA also has deferred inflows for fees collected prior to time requirements being met. Q. Self-Insurance Claims Liabilities for reported claims and incurred but not reported claims (IBNR) are estimated based on an actuarial review of claims pending and historical experience. R. Landfill Closure and Postclosure Care Payable The County recognizes municipal solid waste landfill closure and post closure care costs under the State of Florida s Solid Waste Management Act of 1988, regulations of the Federal Environmental Protection agency and the GASB Statement No. 18, Accounting for Municipal Solid Waste Landfill Closure and Post closure Care Costs. The County is required to place a final cover on closed landfills and to provide longterm care for up to thirty years after final cover. These obligations for closure and postclosure are recognized in the Solid Waste Fund over the active life of the landfill, based on landfill capacity used to date. S. Long Term Obligations Long term liabilities which are expected to be financed from governmental funds are accounted for as debt service expenditures. For proprietary fund types, long term debt and other obligations are reported as liabilities in the fund financing the obligation. In the government-wide and the proprietary fund financial statements are reported as liabilities in the statement of net position. Debt issuance cost, except for prepaid insurance, are expensed in the period incurred. Prepaid insurance cost are reported as an asset and amortized in a systematic and rational manner over the duration of the related debt. Legal debt margin for bond payments are governed by Florida Statutes None of the provisions of this chapter limit or restrict the rate or amount of ad valorem taxes levied for the payment of the principal and the interest on any debt service secured by revenue certificates or by bonds for which the full faith and credit of any taxing district may be pledged. The County reports pollution remediation obligations, in accordance with GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations. The circumstances under which the County will have to estimate, record, and disclose its expected outlays for pollution remediation include: the pollution is an imminent danger to public health or welfare; the government is in violation of a 53

72 NOTES TO FINANCIAL STATEMENTS September 30, 2014 pollution prevention-related permit or license; the government has been named as a responsible party under Superfund or similar state laws; the government is named in a lawsuit that would require participation in remediation activities; or the government legally commits itself to conduct remediation activities. T. Compensated Absences The County s reporting of accumulated compensated absences complies with GASB Statement No. 16. The County s policy permits eligible employees to accumulate a limited amount of earned but unused leave based on years of employment. While employees are encouraged to use their annual leave in the year that it is earned, unused leave time is paid upon separation of service. Compensated absences are recorded as a liability when the benefits are earned in the government-wide and proprietary fund financial statements. The governmental funds recognize an expenditure at the time payments are made to employees. U. Other Post Employment Benefits (OPEB) Under the provisions of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits (OPEB) the government-wide and proprietary fund financial statements report the annual OPEB expense and related OPEB liabilities (assets) of postemployment benefits other than pensions. The government-wide financial statements include the liability of all plan participants for the Board of County Commissioners, the Constitutional Officers as well as the Santa Rosa Island Authority V. Fund Balance Reporting and Governmental Fund-Type Definitions GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions clarify governmental fund balance classifications and fund-type definitions. 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 (restricted, committed, assigned, or unassigned) are further classified below in a hierarchy based on the extent to which there are external and internal constraints on spending of these fund balances. These classifications are described as follows: Nonspendable fund balances - include amounts that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact. Nonspendable types consist of inventories, prepaid amounts, long-term amounts of other assets, loans, notes, and advances receivable, and may include property acquired for resale. Restricted fund balance include amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Committed fund balance Amounts that can be used only for the specific purposes determined by a formal action of an ordinance of the Board of County Commissioners, the highest level of decision making authority. Commitments may be changed or lifted only by the Board of County Commissioners taking the same formal action of an ordinance that imposed the constraint originally. Assigned fund balance comprises amounts intended to be used by the government for specific purposes. The Board of County Commissioners or management designee (via action by the Board of County commissioners) has the authority as the official authorized to assign fund balance to a specific purpose as provided by the fund balance policy. 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. 54

73 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Unassigned fund balance is the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. Unassigned amounts are technically available for any purpose. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. The County has adopted a formal fund balance policy. It is the County s goal to maintain a targeted minimum unrestricted fund balance (the sum of the Committed, Assigned and Unassigned fund balance) equal to 2 months of the current fiscal year s operating expenditures and transfers out budgeted for the fund. This unrestricted fund balance is needed to cover short-term cash flow variations, economic downturns or unanticipated events that would adversely affect the financial condition of the County and jeopardize the continuation of necessary public services. Compliance with the provisions of the fund balance policy is reviewed as part of the annual budget adoption process and revisions to the levels of fund balance can be determined during this process. Budgeting of amounts of unassigned fund balance for the purpose of balancing the budget requires the Board of County Commissioners approval. When multiple categories of fund balance are available for expenditures, the County will start with the most restricted category, unless there are legal documents/contracts that prohibit this order, such as grant agreements requiring dollar for dollar spending. Unassigned fund balance is used when expenditures are incurred for purposes which amounts in any classification could be used. W. Net Position The net positions of proprietary funds, governmental activities and business-type activities are made up of three components. Net Investment in Capital Assets which represents net capital assets less related longterm liabilities; unspent debt proceeds will increase this amount. The Restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. The restricted component represents assets that are legally restricted. They include reserve funds, special revenues restricted by statute or ordinance, bond proceeds and other sources restricted for capital or improvements. The unrestricted component of net position is the balance not included in the determination of net investment in capital assets or the restricted component of 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 $126,497,555, which is presented as $113,719,098 in the statement of net position and $12,778,457 in the statement of fiduciary net position. Additionally, funds are placed with the State Board of Administration for participation in the 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 Security and Exchange Commission (SEC) Rule 2a7-like external investment pool is reported at amortized cost, there are no material differences from fair value. 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 Florida Prime Investment Pool has 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. The Florida Prime Investment Pool is rated by Standard and Poors. The current rating is AAAm. 55

74 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The County s cash deposits are held by banks that qualify as a public depository under the Florida Security for Public Deposits Act as required by Chapter 280, Florida Statutes. At September 30, 2014 the carrying amount of the County s Cash deposits totaled $55,334,033, cash in money market funds totaled $60,957,692, and the County s investment in the Florida Prime Investment Pool totaled $10,205,830. B. Investment Portfolio The Escambia County Board of County Commissioners and Escambia County Clerk of the Circuit Court and Comptroller (Clerk) formally adopted the comprehensive investment policy on January 21, The policy was 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 County maintains a common cash and investment pool for the use of all funds. Section , Florida Statutes, limits the types of investments that a government can invest in unless specifically authorized in the County s investment policy. The Board adopted a list of permitted investments by ordinance, and updated their investment policy on June 10, The policy allows for the following investments: US Government Securities, US Government Agencies, Federal Instruments, Interest Bearing Time Deposit or Savings Accounts, Repurchase Agreements, Commercial Paper, Corporate Notes, Bankers Acceptances, State and/or Local Government Taxable and/or Tax Exempt Debt, Registered Investment Companies (Money Market Mutual Funds), and Intergovernmental Investment Pools that contain no derivatives. Derivatives and reverse repurchase agreements are not permitted by the County s investment policy. The County s investment policy provides asset allocation, issuer, and maturity limits to protect the County s cash and investments. The policy allows for a short-term strategy (maturities of 12 months or less) to provide for operating funds and a longer-term strategy (maturities not exceeding 5 years) for the core portion of the portfolio. As defined by GASB Statement 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, money market investments are reported at amortized costs rather than fair value. 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 Trust Fund, or any authorized intergovernmental investment pool, SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency, Interest-bearing time deposits or savings accounts in qualified public depositories, and direct obligations of the U.S. Treasury. The County s investment portfolio consists of $125,389,608 in direct obligations of the United States Treasury Securities, Federal Instruments, Commercial Paper, Corporate Notes and State and/or Local Government debt 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. As of September 30, 2014, interest receivable on the County s investment portfolio amounted to $262,

75 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The County had the following investment types by issuer and effective duration presented in terms of years: Weighted Average Credit Percentage Security Type Fair Value Duration (Years) Rating of Portfolio Short Term Investments: Commercial Paper 4,992, A % Total short term investments 4,992, % Long Term Investments: United States Treasury Securities 62,236, AA % Federal Instruments 35,917, AA % Corporate Notes 19,694, A % State and/or Local Government Debt 2,549, AA+ 2.03% Total long term investments 120,396, % Total Fair Value $ 125,389, % Portfolio Weighted Average Duration 2.26 C. Interest Rate Risk The County s investment policy sets limits for investment maturities to match known cash needs and anticipated cash flow requirements. Investments of current operating funds have maturities no longer than twelve (12) months. For core funds, investments of reserves, project funds, debt proceeds, and other non-operating funds have a term appropriate for the needs of the funds in accordance with debt covenants, with a maximum term of five (5) years, and the average duration of the funds as a whole may not exceed three (3) years. The County utilizes weighted average duration as a measurement of interest rate risk; as of September 30, 2014, the investments had a weighted average duration of 2.26 years. The County had $3,417,963 of securities with embedded options consisting of the option at the discretion of the issuer to call their obligation or pay a stated increase in the interest rate as follows: Maurity Market Call Call CUSIP Description Date Value Schedule Date 3130A1CR7 Federal Home Loan Banks (Callable) Notes 3/27/2017 $ 2,667,668 One Time 3/27/ HCG2 Bank of New York Mellon (Callable) Notes 3/4/ ,295 Continuous 2/3/2016 $ 3,417,963 The County has no Federal Instrumentalities Mortgage pass-through securities. 57

76 NOTES TO FINANCIAL STATEMENTS September 30, 2014 D. Credit Risk The County s investment policy permits the following investments, which are limited to credit quality ratings from nationally recognized rating agencies as described below: U.S. Government Treasury Securities, U.S. Government Agency, and Federal Instruments. Commercial paper of any United States company that is rated, at the time or purchase, Prime-1 by Moody s and A-1 by Standard & Poor s (prime commercial paper). Corporate notes issued by corporations organized and operating within the United States or by depository institutions licensed by the United States that have a long-term debt rating, at the time or purchase, at a minimum A by Moody s and a minimum long-term debt rating of A by Standard & Poor s. Bankers acceptances issued by a domestic bank or a federally chartered domestic office of a foreign bank, which are eligible for purchase by the Federal Reserve System, if at the time or purchase, the short-term paper is rated, at a minimum P-1 by Moody s Investors Services and A-1 by Standard & Poor s. State and/or local government taxable and/or tax-exempt debt, general obligation and/or revenue bonds, rated at least Aa by Moody s and AA by Standard & Poor s for long-term debt, or rated at least MIG-2 by Moody s and SP-2 by Standard & Poor s for short-term debt. Registered Investment Companies (Money Market Mutual Funds) rated AAAm by Standard & Poor s or the equivalent by another rating agency. The Intergovernmental Investment Pool are rated AAAm by Standard & Poor s or the equivalent by another rating agency. As of September 30, 2014, the majority of the County s investment securities in the amount of $125,389,608 were all individually rated AA+, A+ or A-1 by Standard & Poors Rating Services. The County s $10,205,830 investment in the Florida State Board of Administration s Local Government Surplus Funds Trust Fund (Florida Prime Investment Pool) was rated by Standard and Poors. The current rating as of September 30, 2014 was AAAm. Additional information for the Florida Prime Investment Pool can be found at The County s cash deposit balances of $116,291,725 were deposited in qualified public depositories, as required by Chapter 280, Florida Statutes. E. Custodial Credit Risk The County s investment policy requires securities, with the exception of certificates of deposits, to be held with a third party custodian; and all securities purchased by, and all collateral obtained by the County to 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. Certificates of deposits are placed in the provider s safekeeping department for the term of the deposit. As of September 30, 2014, the County s securities portfolio was held with a third-party custodian as required by the County s investment policy. 58

77 NOTES TO FINANCIAL STATEMENTS September 30, 2014 F. Concentration of Credit Risk The County s investment policy establishes asset allocation and issuer limits on the following investments to reduce concentration of credit risk of the County s investment portfolio: Asset Allocation Maximum Individual Issuer Limit United States Government Securities (1) 100% N/A United States Government Agencies 50% 10% Federal Instruments 100% 25% Interest Bearing Time Deposit or Saving Account 20% 10% Repurchase Agreements 20% 10% Commercial Paper 25% 5% Corporate Notes 20% 5% Bankers' Acceptances 25% 5% State and/or Local Government Taxable and/or Tax-Exempt Debt 25% 10% Registered Investment Companies (Money Market Mutual Funds) 50% 25% Intergovernmental Investment Pool (2) 25% N/A (1) Treasury Strips are limited to 10% of available funds (2) Fund may not contain derivatives 59

78 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 3 CAPITAL ASSETS A. Changes in Capital Assets The following show the changes in capital assets of governmental activities: Primary Government Beginning Ending Balance Balance Governmental Activities 10/1/2013 Increases Decreases 9/30/2014 Capital Assets, Not Being Depreciated: Land $ 38,479,778 $ 7,709,843 $ - $ 46,189,621 Construction In Progress 24,054,678 9,199,320 (6,833,881) 26,420,117 Total Capital Assets, Not Being Depreciated 62,534,456 16,909,163 (6,833,881) 72,609,738 Capital Assets, Being Depreciated and Amortized: Buildings and Improvements 233,723,023 6,016,634 (38,400) 239,701,257 Equipment 122,664,060 11,578,309 (5,271,367) 128,971,002 Intangible Computer Software 5,101, ,943 (244,210) 5,297,996 Infrastructure 725,501,188 13,347, ,848,217 Total Capital Assets Being Depreciated 1,086,989,534 31,382,915 (5,553,977) 1,112,818,472 Less Accumulated Depreciation For: Buildings and Improvements (92,759,455) (7,084,861) 38,400 (99,805,916) Equipment (96,384,643) (9,944,578) 5,095,193 (101,234,028) Intangible Computer Software (3,643,667) (951,535) 244,210 (4,350,992) Infrastructure (405,594,551) (25,414,093) - (431,008,644) Total Accumulated Depreciation (598,382,316) (43,395,067) 5,377,803 (636,399,580) Total Capital Assets, Being Depreciated, Net 488,607,218 (12,012,152) (176,174) 476,418,892 Governmental Activities Capital Assets, Net $ 551,141,674 $ 4,897,011 $ (7,010,055) $ 549,028,630 The following is a summary of governmental activities depreciation and amortization expense by function. As used in this section, the term depreciation includes amortization of intangible assets: Depreciation Governmental Activities: General Government $ 5,107,093 Public Safety 9,498,723 Physical Environment 634,247 Transportation 22,869,292 Economic Environment 1,000,331 Human Services 154,550 Culture/Recreation 2,621,361 Court Related Capital Assets held by the government's Internal Service Fund and 1,427,929 charged to individual functions based on usage 81,541 Total Depreciation Expense - Governmental Activities $ 43,395,067 60

79 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The Following shows the changes in capital assets of business type activities: Beginning Balance Primary Government Ending Balance Business-type Activities 10/1/2013 Increases Decreases 9/30/2014 Capital Assets, Not Being Depreciated: Land $ 5,793,269 $ - $ - $ 5,793,269 Total Capital Assets, Not Being Depreciated 5,793, ,793,269 Capital Assets, Being Depreciated: Buildings and Improvement 37,539,483 5,264-37,544,747 Equipment 21,023,836 2,579,721 (1,725,190) 21,878,367 Intangible Computer Software 191, ,255 Infrastructure 44,101, ,809-44,684,731 Total Capital Assets Being Depreciated 102,856,496 3,167,794 (1,725,190) 104,299,100 Less Accumulated Depreciation For: Buildings and Improvements (24,430,211) (1,046,141) - (25,476,352) Equipment (13,853,269) (1,780,522) 1,579,296 (14,054,495) Intangible Computer Software (67,602) (38,595) - (106,197) Infrastructure (17,797,172) (1,705,983) - (19,503,155) Total Accumulated Depreciation (56,148,254) (4,571,241) 1,579,296 (59,140,199) Total Capital Assets, Being Depreciated, Net 46,708,242 (1,403,447) (145,894) 45,158,901 Total Business-Type Activities Capital Assets, Net $ 52,501,511 $ (1,403,447) $ (145,894) $ 50,952,170 The following is a summary of business-type activities depreciation expense by program: Depreciation Business-type activities: Solid Waste Fund $ 2,823,989 Inspections Fund 12,045 Emergency Medical Service Fund 900,602 Bay Center Fund 834,605 Total Depreciation Expense - Business-type Activities $ 4,571,241 B. Summaries of Capital Assets The following summarizes capital assets found on the statement of net position for governmental activities and business-type activities: 61

80 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Governmental Primary Government Business-Type Activities Activities Total Capital Assets, Not Being Depreciated: Land $ 46,189,621 $ 5,793,269 $ 51,982,890 Construction In Progress 26,420,117-26,420,117 Total Capital Assets, Not Being Depreciated: 72,609,738 5,793,269 78,403,007 Capital Assets, Being Depreciated and Amortized, Net: Buildings 239,701,257 37,544, ,246,004 Equipment 128,971,002 21,878, ,849,369 Intangible Computer Software 5,297, ,255 5,489,251 Infrastructure 738,848,217 44,684, ,532,948 Capital Assets, Being Depreciated: 1,112,818, ,299,100 1,217,117,572 Less: Accumulated Depreciation (636,399,580) (59,140,199) (695,539,779) Total Capital Assets, Being Depreciated, Net: 476,418,892 45,158, ,577,793 Total Capital Assets, Net $ 549,028,630 $ 50,952,170 $ 599,980,800 C. Construction and Other Contractual Commitments The following is a summary of major construction and other contractual commitments outstanding as of September 30, 2014: Remaining Projects Spent-to-Date Commitment Governmental Activities: Building Projects $ 1,246,211 $ 2,566,029 Road & Bridge Projects 23,943,776 18,251,363 Environmental Projects 142, ,795 Economic Development Projects 721, ,315 Parks Projects 1,548, ,873 Tower Site - 30,346 Public Safety Radio Upgrade 1,079,699 2,519,298 Command Center/Ambulances - 1,390,857 Transit 1,776,632 2,239,854 Disaster Recovery-Flood Projects 10,659,212 7,927,108 Total $ 41,118,429 $ 36,496,838 Business Type Activities Solid Waste Landfill Projects $ 248,739 $ 156,060 Solid Waste Landfill Equipment - 763,110 Total $ 248,739 $ 919,170 62

81 NOTES TO FINANCIAL STATEMENTS September 30, 2014 D. Discretely Presented Component Units Capital assets activity for the Santa Rosa Island Authority, a discretely presented component unit, for the year ended September 30, 2014, was as follows: Beginning Balance Component Unit Ending Balance Santa Rosa Island Authority 10/1/2013 Increases Decreases 9/30/2014 Capital Assets, Not Being Depreciated: Construction in Progress $ - $ 188,226 $ - $ 188,226 Total Capital Assets Not Being Depreciated - 188, ,226 Capital Assets, Being Depreciated: Buildings 3,679, ,679,499 Improvements other than Buildings 16,069, ,715-16,286,164 Equipment 1,804,024 79,322 (105,649) 1,777,697 Total Capital Assets Being Depreciated 21,552, ,037 (105,649) 21,743,360 Less Accumulated Depreciation For: Capital Assets (9,804,608) (1,079,097) 105,649 (10,778,056) Capital Assets, Net $ 11,748,364 $ (594,834) $ - $ 11,153,530 The following is a summary of the component unit business-type activities depreciation expense by program: Depreciation component unit: Santa Rosa Island Authority $ 1,079,097 Total Depreciation Expense - Component Unit $ 1,079,097 63

82 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 4 INTERFUND RECEIVABLES, PAYABLES, ADVANCES, AND TRANSFERS The composition of interfund balances as of September 30, 2014 is as follows: Receivable From Other Funds Payable to Other Funds Major Funds: General Fund $ 1,124,328 $ 491,559 Major Special Revenue Funds: Disaster Recovery - 1,202 Major Capital Project Fund: Local Option Sales Tax Fund (LOST) 1,202 - Non-major Funds: Special Revenue Funds 217,726 1,000,009 Internal Service Fund 154,992 5,478 $ 1,498,248 $ 1,498,248 Advances Receivable from Other Funds Advances Payable to Other Funds Major Funds: Major Special Revenue Funds: Disaster Recovery Fund $ - $ 10,993,433 Major Capital Project Fund: Local Option Sales Tax Fund (LOST) 11,668,557 1,736,984 Major Enterprise Funds: Solid Waste Fund - 1,562,857 Non-major Funds: Special Revenue Funds - 675,124 Internal Service Fund 3,299,841 - $ 14,968,398 $ 14,968,398 Interfund receivables and payables resulted primarily from revenues accrued in certain funds that are transferred to other funds. Advances consist primarily of transactions between funds to finance operations, provide services, construction of assets and to service debt. 64

83 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Transfers In Transfers Out Major Funds: General Fund $ 1,778,311 $ 12,988,097 Major Capital Project Fund: Local Option Sales Tax (LOST) - 1,096,081 Major Enterprise Fund: Solid Waste Fund - 313,114 Emergency Medical Service Fund - 224,214 Non-major Funds: Special Revenue Funds 9,195,814 5,009,487 Debt Service Funds 7,356,868 - Enterprise Funds 1,300,000 - $ 19,630,993 $ 19,630,993 Transfers to or from other funds are based on budgetary requirements. Transfers are also used to move pledged revenue for debt service from the funds collecting the revenue to the debt service fund as required for bond coverage. NOTE 5 OTHER ASSETS General Fund LOST Fund Disaster Recovery Fund Total PEDC Receivable $ 11,990 $ 2,140,425 $ - $ 2,152,415 IHMC loan receivable - 2,962,715-2,962,715 PDC lease receivable 3,967, ,967,028 Other 21,137-75,234 96,371 $ 4,000,155 $ 5,103,140 $ 75,234 $ 9,178,529 A. PEDC Receivable The County entered into an interlocal agreement, as amended, with the Pensacola Economic Development Commission (PEDC) to fund the development of the Downtown Technology Park Infrastructure. The majority of the funding source is from Local Option Sales Tax. There is no time limitation on the repayment; however, net proceeds from the sale of each Downtown Technology Park lot will be applied to the outstanding balance. B. IHMC Note Receivable On November 14, 2013, the County and the Florida Institute for Human and Machine Cognition, Inc., (IHMC) entered into an agreement whereby the County s LOST Fund committed to loan up to $12 million to IHMC for paying off existing indebtedness and expansion of facilities in downtown Pensacola. During 2014 IHMC borrowed a gross amount of $3,964,608 under the loan agreement at an interest rate of 65

84 NOTES TO FINANCIAL STATEMENTS September 30, %. The remaining available amount to borrow of $8,035,392 is expected to be drawn in 2015 as construction and renovation begins. The loan is payable to the County over a 15 year period under a payment plan whereby fixed payments are required based upon the assumption that all $12 million was drawn by IHMC at inception of the agreement. The principal balance owed at September 30, 2014 was $2,962,715. IHMC is committed to making the following payments to the County under the payment plan: Year 2015 $ 1,011, ,011, ,011, ,011, ,012, $ 9,105,268 14,163,900 C. PDC Capital Lease Receivable The County has a capital lease agreement with Pensacola Developmental Center (PDC) for 7.08 acres of property and buildings used as an intermediate care facility for the developmentally disabled. The lease provides for transfer of ownership of the buildings and property at the conclusion of the lease. Terms of the lease include monthly payments of principal and interest at 5% per annum. The lease expires June 30, The remaining lease payments are a deferred inflow of resources of the General Fund. As of September 30, 2014 future lease payments totaling $3,967,028 consists of principal of $2,415,526, and interest of $1,551,502. In the government-wide financial statements, only the interest is reported as a deferred inflow. The future capital lease receivable and the net present value of the minimum lease payments as of September 30, 2014, were as follows: Capital Lease Receivable Balance 10/01/2013 $ 2,475,505 Additions - Principal reductions (59,979) Balance 09/30/2014 $ 2,415,526 Future Lease Payments 2015 $ 182, , , , , ,055,068 Total minimum lease payment 3,967,028 less: amount representing interest (1,551,502) Present value of minimum lease payments $ 2,415,526 66

85 NOTES TO FINANCIAL STATEMENTS September 30, 2014 D. Leasing Arrangements Substantially all the Santa Rosa Island Authority s revenue is derived from leasing activities. The Authority leases the land on County-owned Santa Rosa Island to residents and businesses under residential and commercial leases that typically run for a period of 99 years. Many of the 99-year leases have options to renew for another 99-year term. Many leases, particularly those for restaurants and concessions, are generally for a shorter period. Lease revenues in future years are estimated to average approximately $3.7 million per year. NOTE 6 - LONG TERM LIABILITIES A. Schedule of Changes in Long Term Liabilities The County s outstanding long-term debt includes bonds payable, revenue 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: Revenue bonds payable $ 47,545,000 $ - $ (765,000) $ 46,780,000 $ 1,960,000 Revenue notes payable 53,660,000 20,500,000 (3,632,000) 70,528,000 4,852,000 Total bonds/notes payable 101,205,000 20,500,000 (4,397,000) 117,308,000 6,812,000 Claims payable 6,546,893 6,110,732 (6,553,544) 6,104,081 1,728,100 Compensated absences 28,820,381 22,155,492 (21,300,605) 29,675,268 3,065,970 Net other post employment benefits 8,216,389 1,110,105 (335,464) 8,991,030 - Pollution remediation obligation 1,100,000 - (725,000) 375, ,000 Governmental activities long-term liabilities $ 145,888,663 $ 49,876,329 $ (33,311,613) $ 162,453,379 $ 11,831,070 Business-type Activities: Compensated absences $ 1,251,482 $ 865,676 $ (799,362) $ 1,317,796 $ 131,780 Net other post employment benefits 562,557 - (74,347) 488,210 - Landfill closure costs 13,833, ,534 14,426, ,820 Business-type activities Long-term liabilities $ 15,648,026 $ 1,458,210 $ (873,709) $ 16,232,527 $ 370,600 Compensated absences and other post employment benefits will be liquidated in future periods primarily by the General Fund. 67

86 NOTES TO FINANCIAL STATEMENTS September 30, 2014 B. Bonds and Notes Payable The County has revenue bonds and revenue notes payable outstanding at year end. As of September 30, 2014, there are no business type-activity notes or bonds payable. The following is a schedule of bonds and notes outstanding at September 30, 2014: Governmental Activities: Revenue Bonds: Capital Improvement Refunding Revenue Bond Purpose Amount Amount Interest Final of Issue Issued Outstanding Rates Maturity Series 2011 Refunding $ 19,345,000 $ 17,245, % 10/1/2031 Sales Tax Refunding Revenue Bond Series 2011 Refunding 29,535,000 29,535, % 10/1/2031 Total Revenue Bonds 46,780,000 Revenue Notes: Sales Tax Refunding Revenue Note Series 2012 Refunding $ 48,040,000 $ 44,540, % 10/1/2032 Tourist Development Refunding Revenue Note Series 2012 Refunding 8,406,000 6,168, % 10/1/2019 Capital Improvement Revenue Note Series 2013 Capital Project 12,000,000 11,320, % 10/1/2028 Capital Improvement Revenue Note Series 2014 Capital Project 8,500,000 8,500, % 10/1/2021 Total Revenue Notes 70,528,000 Total Bonds & Notes Payable - Governmental Activities $ 117,308,000 68

87 NOTES TO FINANCIAL STATEMENTS September 30, 2014 C. Pledged Revenues Escambia County has pledged certain revenues to repay certain bonds and notes outstanding at September 30, The following table reports the revenues, sometimes net of related operating expenses, pledged for each debt issue, the amount 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 Maturity Revenue Total Principal Percentage & Interest Calandar Governmental Activities Pledged Revenue & Interest Pledged Paid Year Revenue Bonds and Notes: Capital Improvement Refunding Revenue Bond Non-Ad valorem $ 1,325,411 $ 22,464, % $ 1,325, Sales Tax Refunding Revenue Bond Half Cent Sales Tax 21,735,479 38,370, % 903, Sales Tax Refunding Revenue Note Half Cent Sales Tax 21,735,479 58,109, % 3,099, Tourist Development Refunding Revenue Note Tourist Development Tax 7,095,717 6,466, % 1,294, Capital Improvement Revenue Note Non-Ad valorem 1,011,794 14,163, % 1,011, Capital Improvement Revenue Note Non-Ad valorem - 8,979, % Total Revenue Bonds and Notes - Governmental Activities $ 148,555,187 $ 7,634,345 69

88 NOTES TO FINANCIAL STATEMENTS September 30, 2014 D. Compensated Absences 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 governmental activities statement of net position. The following is a summary schedule of compensated absences as of September 30, 2014: Balance Balance 10/1/13 Additions (Reductions) 9/30/14 Governmental Activities: Board of County Commissioners $ 7,486,554 $ 13,047,493 $ (5,979,793) $ 14,554,254 Clerk 486, ,014 (407,829) 476,991 Property Appraiser 443, ,225 (318,644) 452,054 Supervisor of Elections 139, ,220 (68,541) 193,047 Sheriff 18,616,302 7,110,179 (13,435,110) 12,291,371 Tax Collector 669, ,475 (427,487) 627,990 Internal Service Fund - BCC 297, ,923 (146,604) 326,814 Internal Service Fund - Clerk 681, ,963 (516,597) 752,747 $ 28,820,381 $ 22,155,492 $ (21,300,605) $ 29,675,268 Business-type Activities: Solid Waste Fund $ 493,587 $ 326,031 $ (298,446) $ 521,172 Ambulance Fund 448, ,498 (371,195) 474,257 Inspection Fund 308, ,147 (129,721) 322,367 $ 1,251,482 $ 865,676 $ (799,362) $ 1,317,796 E. Other Post Employment Benefits (OPEB) Other Post Employment Benefits (OPEB) are accrued in proprietary funds at year end. The County does not accrue OPEB in governmental funds; however, these benefits in governmental funds are charged to the fund and function in which the employee was related and are reported as a liability on the governmental activities statement of net position. The following is a summary schedule of OPEB as of September 30, 2014: Balance Balance 10/1/13 Additions (Reductions) 9/30/14 Governmental Activities: Governmental Activities $ 8,216,389 $ 1,110,105 $ (335,464) $ 8,991,030 $ 8,216,389 $ 1,110,105 $ (335,464) $ 8,991,030 Business-type Activities: Solid Waste Fund $ 118,601 $ - $ (9,476) $ 109,125 Inspections Fund 87,175 - (12,651) 74,524 Emergency Medical Fund 356,781 - (52,220) 304,561 $ 562,557 $ - $ (74,347) $ 488,210 70

89 NOTES TO FINANCIAL STATEMENTS September 30, 2014 F. Debt Service Requirements The following schedule shows debt service requirements to maturity for the County s bonds payable and notes payable: Governmental Activities: Fiscal Year Revenue Bonds Payable Revenue Notes Payable Total Principal Interest Principal Interest 2015 $ 1,960,000 $ 1,440,091 $ 4,852,000 $ 1,846,025 $ 10,098, ,210,000 1,379,722 4,950,000 1,740,725 10,280, ,275,000 1,311,691 5,068,000 1,626,571 10,281, ,350,000 1,241,659 5,174,000 1,512,828 10,278, ,415,000 1,169,319 5,293,000 1,396,463 10,273, ,265,000 4,682,975 17,738,000 5,400,469 41,086, ,440,000 2,511,348 16,568,000 2,587,519 37,106, ,865, ,611 10,885,000 1,081,171 19,149,782 Total $ 46,780,000 $ 14,055,416 $ 70,528,000 $ 17,191,771 $ 148,555,187 The following schedule shows the minimum and maximum future principal installments. The initial principal installment for the Sales Tax Revenue Refunding Bond, Series 2011 is due 10/1/2015. Governmental Activities: Annual Principal Installment Amounts Revenue Bonds: Capital Improvement Refunding Revenue Bond, Series 2011 $ 785,000 to $ 1,280,000 Sales Tax Refunding Revenue Bond, Series 2011 $ 1,175,000 to $ 2,205,000 Revenue Notes: Sales Tax Refunding Revenue Note, Series 2012 $ 1,830,000 to $ 5,225,000 Tourist Development Refunding Revenue Note, Series 2012 $ 1,201,000 to $ 1,270,000 Capital Improvement Revenue Note, Series 2013 $ 656,000 to $ 981,000 Capital Improvement Revenue Note, Series 2014 $ 1,165,000 to $ 1,265,000 G. Long-Term Debt Bonds and Notes The Sales Tax Refunding Revenue Bond, Series 2011 in the aggregate amount of $29,535,000 was issued on October 21, The bonds have a fixed interest rate of 3.060% and a maturity date of October 1, The proceeds of this bond were used to advance refund a portion of the Sales Tax Revenue Refunding Bonds Series The Bond is secured by certain pledged revenues consisting primarily of amounts received by the County as proceeds of the Local Government Half-Cent Sales Tax. The Capital Improvement Refunding Revenue Bond, Series 2011 in the aggregate amount of $19,345,000 was issued on December 9, The Bonds have a fixed interest rate of 3.110% and a maturity date of October 1, The proceeds of the 2011 Bond were used to advance refund all of the outstanding Capital Improvement Revenue Bonds Series The Bond is secured by a covenant to budget and appropriate from available Non-Ad Valorem revenues. 71

90 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The Sales Tax Refunding Revenue Note, Series 2012 in the aggregate amount of $48,040,000 was issued on August 1, The Note has a fixed interest rate of 2.820% and a maturity date of October 1, The proceeds of the 2012 Note refunded on a current basis the balance of the Sales Tax Revenue Refunding Bonds Series The Bond is secured by certain pledged revenues consisting primarily of amounts received by the County as proceeds of the local Government Half-Cent Sales Tax. The Tourist Development Refunding Revenue Note, Series 2012 in the aggregate amount of $8,406,000 was issued on November 19, The note has a fixed interest rate of 1.599% and a maturity date of October 1, The proceeds of this note advance refunded the Tourist Development Revenue Refunding Bond, Series The Bond is secured by a covenant to budget and appropriate from available Non-Ad Valorem revenues, and certain pledged revenues consisting of amounts received by the County as proceeds of the local Tourist Development Tax. The Capital Improvement Revenue Note, Series 2013 in the amount of $12,000,000 was issued on November 14, The Note has a fixed interest rate of 3.140% and a maturity date of October 1, The proceeds were used to reimburse the LOST fund for acquisition and construction of certain transportation and drainage related capital improvements of the County. The Note is secured by a covenant to budget and appropriate from legally available Non-Ad Valorem revenues. The Capital Improvement Revenue Note, Series 2014 in the amount of $8,500,000 was issued on September 30, The Note has a fixed interest rate of 1.390% and a maturity date of October 1, The proceeds of this note, in addition to matching funds approved by the State of Florida, will be used to re-nourish 8.2 miles of Pensacola Beach located on Santa Rosa Island. The Note is secured by a covenant to budget and appropriate from legally available Non-Ad Valorem revenues. As of September 30, 2014 Proceeds were unspent. H. Conduit Debt Obligations Conduit Debt Obligations have been established in the County s name by private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans and leases. Neither the County, nor the State, nor any political subdivision thereof, is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2014, the outstanding conduit debt of Escambia County is $3,281,655,493. I. Landfill Closure and Postclosure Care Liability 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 closure and postclosure care is allocated based on landfill capacity used to date and the type of waste being collected. The Beulah, Klondike, Mobile Highway, and Camp Five landfills are closed. Perdido Landfill is the only currently open landfill. As of September 30, 2014, Perdido Landfill s Class I capacity is at 83%, and the Class III capacity is at 80%, leaving an estimated life of five (5) years remaining. The accrued cost for closure care and postclosure care as of September 30, 2014, is $14,426,521. The remaining closure and postclosure costs to be recognized, based upon the current engineering estimates are $2,391,519, and will be recognized as the remaining estimated capacity is used. 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 the account is reported as a restricted asset on the statement of net position of the Solid Waste Enterprise Fund. The restricted escrow balance as of September 30, 2014 is $6,842,

91 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Closure and Postclosure Care Liability: Current $ 238,820 $ 317,301 Long-term 14,187,701 13,516,686 Total Liability $ 14,426,521 $ 13,833,987 J. Pollution Remediation Obligation The County has identified potential pollution sites within the County which may require remediation. The county tracks, but does not report a liability for sites which are part of the State of Florida Department of Environmental Protection (FDEP) cleanup program funded by the State. Information on these locations and on scoring of projects is located on the FDEP website at The former Escambia County Mosquito Control Facility pollution remediation expenditures were approximately $70,000 during fiscal year Revised estimates for projected costs through 2015 are $300,000. The County assumed ownership of the Saufley Construction and Demolition (C&D) Debris Facility, and converted the facility to a beneficial use. In 2010 the County entered into an agreement with the FDEP to develop and construct a closure system for the site as well as address the postclosure care requirements. During fiscal year 2014 this process was concluded ending the pollution remediation obligation Pollution remediation obligations are an estimate and subject to changes resulting from price increases or reductions, technology or changes in applicable laws or regulations. The government does not expect to recover any amounts for remediation cost from any other party. The total pollution remediation obligation reported at September 30, 2014 in the governmental activities statement of net position is estimated to be approximately $375,000. NOTE 7 - RISK MANAGEMENT PROGRAM The County maintains a risk management program whereby the County is responsible for specific workers compensation, general property and casualty, and auto liability claims. The Santa Rosa Island Authority and Escambia County Law Library Board are also covered through the County s risk management program. The following are the types of risks and coverage: Workers Compensation The County is covered for workers compensation claims through a policy with the Florida Municipal Insurance Trust. Coverage limits under the policy include statutory limits, as well as $1,000,000 bodily injury for each accident and $1,000,000 bodily injury by disease for each employee with an aggregate $1,000,000 policy limit. Casualty and Property Casualty limits are self-insured for $200,000 per claim with a $300,000 aggregate limit. Property limits are $50,000 - $250,000 self insured retentions per occurrence with excess limits of $45 million including wind. The County currently reports all of its risk management activities, including claims liabilities, in the Internal Service Fund. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities on claims prior to June 9, 2008 include an amount for claims that have been incurred but not reported (IBNR). The claims liabilities totaling $6,104,081 reported in the Internal Service Fund at September 30, 2014 are actuarially determined based on historical and current information regarding the Fund. There were no settlements in excess of the insurance coverage in any of the three prior fiscal years. 73

92 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Changes in the estimated liability for self-insured losses for the past two years are as follows: Unpaid claims, beginning $ 6,546,893 $ 7,085,360 Claims incurred and changes in estimates 6,110,732 4,010,909 Less: claims paid (6,553,544) (4,549,376) Unpaid claims, ending $ 6,104,081 $ 6,546,893 Estimated claims due within one year (1,728,100) (1,922,800) Estimated claims due longer than one year $ 4,375,981 $ 4,624,093 NOTE 8 - RETIREMENT SYSTEM The Florida Retirement System (FRS) is a multiple employer, cost sharing, contributory retirement system administered by the State of Florida (State). The FRS was established in 1970 by Chapter 121, Florida Statutes. Rules governing the operation and administration of the system may be found in Chapter 60S of the Florida Administrative Code. 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 included 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,.04% administrative and educational fee and any applicable unfunded actuarial liability UAL rates. The FRS Pension Plan provides retirement and disability benefits, death benefits and survivor s benefits. Benefits are established by State Statutes. Employees hired before July 1, 2011 are vested after six (6) years of creditable service. For those hired on or after July 1, 2011, vesting of benefits occurs after the completion of eight (8) years of creditable service. Members are eligible for normal retirement when they have met the minimum requirements listed below. Early retirement may be taken any time after vesting with a 5% reduction of benefits for each year prior to the normal retirement age. Retirement benefits are based upon age, average compensation and years-of-service credit. Average compensation is computed as the average of an individual s five highest years of earnings for employees hired before July 1, 2011 or eight (8) highest years of earnings for employees hired on or after July 1, Members are also eligible for in-line-of-duty or regular disability benefits if permanently disabled and unable to work. 74

93 NOTES TO FINANCIAL STATEMENTS September 30, 2014 Normal Retirement Requirements Regular, Senior Management and Elected Officer's Class Six years of service and age 62, or the age after 62 when the member becomes vested, or thirty years of service. Eight years of service for members first enrolled after July 1, 2011 and age 65, or the age after 65 when the member becomes vested, or thirty years of service. Special Risk Class Six years of special risk service and age 55, or the age after 55 when the member becomes vested, or twenty five years of service. Eight years of special risk service for members first enrolled after July 1, 2011, age 60, or the age after 60 when the member becomes vested, or thirty years of service. Special Risk Administrative Support Class 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. Funding Policy The FRS has six classes of membership 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% Senior Management: 21.14% 18.31% 6.30% Elected Officials Class: 43.23% 33.03% 10.23% Deferred Retirement Option Program (DROP): 12.28% 12.84% 5.44% Special Risk Class - Members employed as law 19.82% 19.06% 14.90% enformement officers, firefighters, or correctional officers meet the criteria to qualify for this class Special Risk Administrative Support: 42.07% 35.96% 5.91% For the years ending September 30, 2014, 2013, 2012, total contributions were $13,650,948, $10,191,571 and $8,688,555 respectively, equal to 100% of the required contributions for each year. Effective July 1, 2011, members are required to 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. 75

94 NOTES TO FINANCIAL STATEMENTS September 30, 2014 NOTE 9 - POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) Other postemployment benefits are provided by the County in the form of life and health insurance for pre-medicare eligible retirees at the same rate as active participants. In health insurance plans where a government s retirees and current employees are insured together as a group, the premiums paid by the retirees may be lower than they would have been if the retirees were insured separately. This is called an implicit rate subsidy. Under this single-employer plan, benefit provisions are essentially the same for the Board of County Commissioners and all of the other Constitutional Officers, except for the Sheriff, who maintains a separate health insurance contract and therefore has different costs associated with the premium payments on behalf of the Sheriff s employees. The County may amend the OPEB plan at its discretion. A stand-alone financial report is not prepared for the OPEB plan. The County engaged an actuarial firm to determine the estimated obligation associated with the plan. As of the valuation date of October 1, 2013, there were no significant changes in the benefits of the plan. At October 1, 2013, the date of the latest actuarial valuation, plan participation consisted of: OPEB plan participants 2,313 Retirees receiving benefits 293 The County has the authority to establish and amend the OPEB funding policy, and is not required by law or other contractual agreement to provide funding for the implicit rate subsidy other than the pay-as-yougo amount necessary to provide current benefits for participants in its health insurance plan. During 2014, the County made $934,558 in contributions toward the implicit rate subsidy. The County s annual OPEB cost (expense) is calculated based on the Annual Required Contribution (ARC) of the employer, an amount actuarially determined in accordance with GASB Statement 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 to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the County s OPEB cost for the year, the amount actually contributed to the plan, and changes in the County s net OPEB obligation: FY14 Valuation as of 10/01/13 Normal Cost (service cost for one year) $ 940,378 Amortization of Unfunded Actuarial Accrued Liability (UAAL) 678,780 Interest on Normal Cost and Amortization - Annual Required Contribution (ARC) 1,619,158 Annual Required Contribution (ARC) 1,619,158 Interest on Net OPEB Obligation 351,158 Adjustment to ARC (335,464) Annual OPEB Cost (Expense) 1,634,852 Employer Contributions Made 934,558 Increase (Decrease) in Net OPEB Obligation 700,294 Net OPEB Obligation at beginning of year 8,778,946 Net OPEB Obligation at end of Year $ 9,479,240 76

95 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The County s annual OPEB cost, the percentage of annual expected employer contributions toward OPEB cost and the net OPEB obligation for 2014 with two applicable preceding years was as follows: Fiscal Year Ending Annual OPEB Cost Employer Contribution Percentage of Annual OPEB Cost Contributed Net OPEB Obligation 9/30/2012 $ 1,546,462 $ 538, % $ 8,039,913 9/30/2013 $ 1,607,228 $ 868, % $ 8,778,946 9/30/2014 $ 1,634,852 $ 934, % $ 9,479,240 Funding Policy and Status - As of October 1, 2013, valuation date, the plan was 0% funded. The actuarial accrued liability (AAL) for benefits was $17,763,326 and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $17,763,326. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was approximately $105 million and the ratio of the UAAL to the covered payroll was 16.90%. Actuarial Methods and Assumptions: Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents 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. Calculations for financial reporting purposes are based on the plan as understood by the employer and the plan members and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The OPEB-specific actuarial assumptions used in the actuarial valuation described below are consistent with those used by the Florida Retirement System actuary and adopted by the Florida Retirement System. 77

96 NOTES TO FINANCIAL STATEMENTS September 30, 2014 The actuarial methods and assumptions are: Actuarial cost method Projected unit credit cost Amortization method Level percent of pay, open Amortization period remaining 30 years Asset valuation method Unfunded - Market value of assets Actuarial assumptions: Investment rate of return* 4% compounded annually Projected salary increases* 3.0% Payroll growth assumptions 3.0% Medical cost trend rate* Pre-Medicare 8.5% Ultimate trend rate* Pre-Medicare 5.0% Year of ultimate trend rate 2018 *Includes general inflation at 3.0% NOTE 10 NET POSITION RESTRICTED FOR OTHER PURPOSES Net position restricted for other purposes in the governmental activities at September 30, 2014 are as follows: Court-Related $ 4,240,911 Culture & Recreation 1,338,621 Tourism 5,864,172 Health 16,327 Resource Conservation 168,629 Records Modernization $ 2,755,849 14,384,509 NOTE 11 COMMITMENTS AND CONTINGENCY A. Litigation The County is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of operations. Claims covered by the risk management self-insurance program are reviewed and losses are accrued as required in the judgment of management. The County is a defendant in various lawsuits. 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. Property taxes have been assessed on certain improvements made on Pensacola Beach for tax years and on land value and improvements for tax years The tax assessment is being contested in various lawsuits as such, the county has recorded a liability of approximately $7.4 million for estimated ad valorem tax revenue collected on the value of the land and subject to this litigation. B. Flood Event In April 2014 the Pensacola area received a torrential rainfall which resulted in safety concerns for two buildings; the COBB Building located at 2251 North Palafox Street, Pensacola and the Central Booking Detention Facility (CBD) located at 1200 West Leonard Street, Pensacola. Both buildings sustained 78

97 NOTES TO FINANCIAL STATEMENTS September 30, 2014 damage from this rain event. In addition, the CBD Facility experienced a subsequent explosion. The efforts to determine the scope of the damage by the insurance company and by engineers have not been concluded. The COBB building had a remaining book value of $1.2 million at the time of the incident, and the CBD Facility had a remaining book value of $12.5 million at the time of the incident. No impairments have been recorded as of September 30, C. Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. If expenditures are disallowed as a result of these audits, the claim 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, and therefore not have a material adverse effect on the financial position of the County. D. Deficit Fund Equity At September 30, 2014 the Disaster Recovery Special Revenue Fund, a major fund, has a deficit fund balance of $3,836,540. The deficit is due to expenditures due to the flood event, and delayed grant funding. NOTE 12 SUBSQUENT EVENTS The County has evaluated events and transactions that occurred between September 30, 2014, and February 18, 2015, which is the date that the financial statements were available to be issued, for possible recognition or disclosure in the financial statements. No subsequent events have been recognized or disclosed. 79

98 REQUIRED SUPPLEMENTARY INFORMATION Other Post Employment Benefits: Schedule of Funding Progress

99 REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS FOR OTHER POSTEMPLOYMENT BENEFITS Actuarial Valuation Date 10/1/ /1/ /1/2013 Accrued Actuarial Value of Assets Liability (AAL) Projected Unit Credit Unfunded AAL (UAAL) Funded Ratio Covered payroll UAAL as a Percentage of Covered Payroll (a) (b) (b-a) (a/b) (c) ([b-a]/c) $ - $ 17,185,044 $ 17,185, % $ 107,499, % $ - $ 16,618,209 $ 16,618, % $ 103,012, % $ - $ 17,763,326 $ 17,763, % $ 105,128, % 80

100 OTHER SUPPLEMENTARY INFORMATION

101 BUDGETARY COMPARISON SCHEDULE LOCAL OPTION SALES TAX FUND For the Year Ended September 30, 2014 Variance with Final Budget Actual Amounts Final Budget - Over (Under) REVENUES Taxes $ 32,756,468 $ 37,714,910 $ 4,958,442 Intergovernmental Revenues 14,530,930 4,144,175 (10,386,755) Charges for Services 166, ,842 38,592 Investment Income - 489, ,129 Miscellaneous Revenues 1,517,127 1,010,289 (506,838) Total Revenues 48,970,775 43,563,345 (5,407,430) EXPENDITURES Current: General Government 20,219,843 5,719,399 14,500,444 Transportation 906, , ,844 Human Services 114,230 75,268 38,962 Culture/Recreation 1,835,633 1,216, ,462 Debt Service Interest and Fiscal Charges 795,658 3, ,124 Capital Outlay 105,527,504 30,299,451 75,228,053 Total Expenditures 129,399,299 38,074,410 91,324,889 Excess (Deficiency) of Revenues Over (Under) Expenditures (80,428,524) 5,488,935 85,917,459 OTHER FINANCING SOURCES (USES) Transfers (Out) - (1,096,081) (1,096,081) Issuance of Notes/Bonds Payable 12,000,000 20,500,000 8,500,000 Total Other Financing Sources and (Uses) 12,000,000 19,403,919 7,403,919 Net Change in Fund Balance (68,428,524) 24,892,854 93,321,378 Fund Balance - Beginning 68,428,524 67,332,321 (1,096,203) Fund Balance - Ending $ - $ 92,225,175 $ 92,225,175 81

102 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 Escambia 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. 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. 82

103 Board Of County Commissioners Clerk of the Circuit Court and Comptroller Property Appraiser ASSETS Cash and Cash Equivalents $ 18,624,790 $ 2,066,136 $ 254,666 Investments 23,182, Accounts Receivable 1,128,495 2,889 - Accrued Interest Receivable 262, Due from Other Funds 2,935,627 1,527 - Due from Other Governments 5,267,198 4,999 - Inventories 239, Other Assets 3,979,016-21,139 Total Assets $ 55,619,243 $ 2,075,551 $ 275,805 LIABILITIES Accounts Payable $ 1,659,575 $ 39,536 $ 38,002 Contracts Payable 1,685 45,287 - Accrued Liabilities 2,487, , ,154 Due to Other Funds 118, , ,649 Due to Other Governments 1,664,441 1,338,235 - Deposits 173, Unearned Revenue - 70,283 - Other Current Liabilities 7,607,322 47,557 - Total Liabilities 13,713,259 2,075, ,805 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Capital Lease 3,967, Total deferred inflow of resources 3,967, FUND BALANCES Nonspendable: Inventories 239, Prepaid Items Long Term Other Assets 3,979, Restricted for: Court Related Functions Assigned to: Subsequent Year's Budget 10,073, Unassigned 23,647, Total Fund Balances 37,938, Total Liabilities, deferred inflow of resources, and fund balances ESCAMBIA COUNTY, FLORIDA COMBINING BALANCE SHEET GENERAL FUND BY CATEGORY September 30, 2014 $ 55,619,243 $ 2,075,551 $ 275,805 83

104 Sheriff Supervisor of Elections Tax Collector Eliminations Total General Funds $ 3,878,090 $ - $ 540,630 $ - $ 25,364, ,182, ,131, ,414 22, ,716 - (1,935,627) 1,124,328 13, ,285, , , ,000,155 $ 4,063,031 $ 100,716 $ 540,714 $ (1,935,627) $ 60,739,433 $ 72,624 $ 75,824 $ 215,005 $ - $ 2,100, ,972 2,077,011 24, ,752-5,095,792 1,764, ,027 (1,935,627) 491, ,002, , , , ,654,879 3,914, , ,714 (1,935,627) 18,684, ,967, ,967, , , ,979, ,073, ,647, , ,087,975 $ 4,063,031 $ 100,716 $ 540,714 $ (1,935,627) $ 60,739,433 84

105 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 and Comptroller Property Appraiser REVENUES Taxes $ 98,907,750 $ - $ - Franchise Fees 12,863, Special Assessments 963, Intergovernmental Revenues 29,994, ,952 - Charges for Services 1,551,159 5,446,756 14,337 Judgments and Fines 28,220 1,261,613 - Investment Income 435, ,540 - Miscellaneous Revenues 5,868, ,317 2,459 Total Revenues 150,613,568 7,961,178 16,796 EXPENDITURES Current: General Government 31,655,838 3,659,489 5,227,302 Public Safety 36,489, Physical Environment 1,160, Human Services 2,084, Culture/Recreation 1,256, Court-Related - 6,476,578 - Total Expenditures 72,646,434 10,136,067 5,227,302 Excess (Deficiency) of Revenues Over (Under) Expenditures 77,967,134 (2,174,889) (5,210,506) OTHER FINANCING SOURCES (USES) Transfers In 3,667,523 2,144,827 5,314,903 Transfers (Out) (75,865,905) (22,373) (104,397) Total Other Financing Sources and (Uses) (72,198,382) 2,122,454 5,210,506 Net Change in Fund Balances 5,768,752 (52,435) - Fund Balances - Beginning 32,170,204 52,435 - Fund Balances - Ending $ 37,938,956 $ - $ - 85

106 Sheriff Supervisor of Elections Tax Collector Eliminations Total General Fund $ - $ - $ - $ - $ 98,907, ,863, , ,994,790-3,431 2,746,527-9,762, ,289, , ,154 (2,143,749) 4,003,009-3,431 2,871,681 (2,143,749) 159,322,905-1,762,601 6,883,211 (2,143,749) 47,044,692 48,133, ,622, ,160, ,084, ,256, ,476,578 48,133,393 1,762,601 6,883,211 (2,143,749) 142,645,259 (48,133,393) (1,759,170) (4,011,530) - 16,677,646 49,494,764 1,759,170 4,164,144 (64,767,020) 1,778,311 (1,609,828) - (152,614) 64,767,020 (12,988,097) 47,884,936 1,759,170 4,011,530 - (11,209,786) (248,457) ,467, , ,620,115 $ 149,019 $ - $ - $ - $ 38,087,975 86

107 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND For the Year Ended September 30, 2014 Board Of County Commissioners Original Budget Final Budget Actual Amounts REVENUES Taxes $ 94,943,409 $ 94,943,409 $ 98,907,750 Franchise Fees 11,124,975 11,124,975 12,863,839 Special Assessments 947, , ,246 Intergovernmental Revenues 27,100,970 27,100,970 29,994,838 Charges for Services 1,491,500 1,491,709 1,551,159 Judgments and Fines 12,825 12,825 28,220 Investment Income ,688 Miscellaneous Revenues 3,735,290 4,320,499 5,868,828 Total Revenues 139,356, ,942, ,613,568 EXPENDITURES Current: General Government 55,051,525 55,662,765 31,655,838 Public Safety 35,447,559 36,699,736 36,489,094 Physical Environment 1,164,346 1,210,184 1,160,896 Economic Environment Human Services 2,144,635 2,225,600 2,084,239 Culture/Recreation 1,299,947 1,328,495 1,256,367 Court-Related Total Expenditures 95,108,012 97,126,780 72,646,434 Excess (Deficiency) of Revenues Over (Under) Expenditures 44,248,783 42,815,433 77,967,134 OTHER FINANCING SOURCES (USES) Transfers In 1,778,311 1,778,311 3,667,523 Transfers (Out) (75,458,646) (77,003,233) (75,865,905) Total Other Financing Sources and (Uses) (73,680,335) (75,224,922) (72,198,382) Net Change in Fund Balances (29,431,552) (32,409,489) 5,768,752 Fund Balances - Beginning 29,431,552 32,409,489 32,170,204 Fund Balances - Ending $ - $ - $ 37,938,956 87

108 Clerk of the Circuit Court and Comptroller Property Appraiser Original Budget Final Budget Actual Amounts Original Budget Final Budget Actual Amounts $ - $ - $ - $ - $ - $ ,909,739 6,759, , ,606,265 1,606,265 5,446,756 12,556 12,556 14, ,261, , , ,459 8,516,004 8,366,004 7,961,178 12,556 12,556 16,796 3,753,966 3,811,092 3,659,489 5,321,229 5,327,750 5,227, ,849,739 6,699,739 6,476, ,603,705 10,510,831 10,136,067 5,321,229 5,327,750 5,227,302 (2,087,701) (2,144,827) (2,174,889) (5,308,673) (5,315,194) (5,210,506) 2,087,701 2,144,827 2,144,827 5,308,673 5,315,194 5,314, (22,373) - - (104,397) 2,087,701 2,144,827 2,122,454 5,308,673 5,315,194 5,210, (52,435) , $ - $ - $ - $ - $ - $ - 88

109 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL -Continued GENERAL FUND For the Year Ended September 30, 2014 Sheriff Original Budget Final Budget Actual Amounts REVENUES Taxes $ - $ - $ - Franchise Fees Special Assessments Intergovernmental Revenues Charges for Services Judgments and Fines Investment Income Miscellaneous Revenues Total Revenues EXPENDITURES Current: General Government Public Safety 48,112,916 49,494,764 48,133,393 Physical Environment - - Economic Environment - - Human Services - - Culture/Recreation - - Court-Related - - Total Expenditures 48,112,916 49,494,764 48,133,393 Excess (Deficiency) of Revenues Over (Under) Expenditures (48,112,916) (49,494,764) (48,133,393) OTHER FINANCING SOURCES (USES) Transfers In 48,112,916 49,494,764 49,494,764 Transfers (Out) - - (1,609,828) Total Other Financing Sources and (Uses) 48,112,916 49,494,764 47,884,936 Net Change in Fund Balances - - (248,457) Fund Balances - Beginning ,476 Fund Balances - Ending $ - $ - $ 149,019 89

110 Supervisor of Elections Tax Collector Original Budget Final Budget Actual Amounts Original Budget Final Budget Actual Amounts $ - $ - $ - $ - $ - $ ,431 3,009,110 3,009,110 2,746, ,600 84, , ,431 3,093,710 3,093,710 2,871,681 1,905,594 1,926,399 1,762,601 7,050,975 7,050,975 6,883, ,905,594 1,926,399 1,762,601 7,050,975 7,050,975 6,883,211 (1,905,594) (1,926,399) (1,759,170) (3,957,265) (3,957,265) (4,011,530) 1,905,594 1,926,399 1,759,170 4,164,144 4,164,144 4,164, (206,879) (206,879) (152,614) 1,905,594 1,926,399 1,759,170 3,957,265 3,957,265 4,011, $ - $ - $ - $ - $ - $ - 90

111 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - Continued GENERAL FUND For the Year Ended September 30, 2014 Eliminations Original Budget Final Budget Actual Amounts REVENUES Taxes $ - $ - $ - Franchise Fees Special Assessments Intergovernmental Revenues Charges for Services Judgments and Fines Investment Income Miscellaneous Revenues (2,143,749) (2,143,749) (2,143,749) Total Revenues (2,143,749) (2,143,749) (2,143,749) EXPENDITURES Current: General Government (2,143,749) (2,143,749) (2,143,749) Public Safety Physical Environment Economic Environment Human Services Culture/Recreation Court-Related Total Expenditures (2,143,749) (2,143,749) (2,143,749) Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In (61,581,361) (65,904,348) (64,767,020) Transfers (Out) 61,581,361 65,904,348 64,767,020 Total Other Financing Sources and (Uses) Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending $ - $ - $ - 91

112 TOTAL Variance with Original Budget Final Budget Actual Amounts Final Budget - Over (Under) $ 94,943,409 $ 94,943,409 $ 98,907,750 $ 3,964,341 11,124,975 11,124,975 12,863,839 1,738, , , ,246 15,420 34,010,709 33,860,709 30,994,790 (2,865,919) 6,119,431 6,119,640 9,762,210 3,642,570 12,825 12,825 1,289,833 1,277, , ,228 1,676,141 2,261,350 4,003,009 1,741, ,835, ,270, ,322,905 10,052,171 70,939,540 71,635,232 47,044,692 24,590,540 83,560,475 86,194,500 84,622,487 1,572,013 1,164,346 1,210,184 1,160,896 49, ,144,635 2,225,600 2,084, ,361 1,299,947 1,328,495 1,256,367 72,128 6,849,739 6,699,739 6,476, , ,958, ,293, ,645,259 26,648,491 (17,123,366) (20,023,016) 16,677,646 36,700,662 1,775,978 (1,080,709) 1,778,311 2,859,020 (14,084,164) (11,305,764) (12,988,097) (1,682,333) (12,308,186) (12,386,473) (11,209,786) 1,176,687 (29,431,552) (32,409,489) 5,467,860 37,877,349 29,431,552 32,409,489 32,620, ,626 $ - $ - $ 38,087,975 $ 38,087,975 92

113 NONMAJOR 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: Escambia County Restricted Fund Created to account for monies donated to the County for a specific purpose. Economic Development Fund Created pursuant to the Economic Development Incentive Program Ordinance to account for revenues associated with land sales at the various County commerce parks and other economic development related revenues. Expenditures will be used to promote economic development initiatives Escambia County. Code Enforcement Fund Created to account for the enforcement of ordinances and statutes to enhance the quality of life for and protect citizens from environmentally unsafe conditions. Mass Transit Fund Created to account for the operation and maintenance of the Escambia County Transit System. The 1 to 5 Cents Local Option Fuel Tax (4 cents levied) is used to fund public transportation operations and maintenance pursuant to Sections 206 and 336, Florida Statutes. Funding is also by Federal Transit Administration operating grants, user fees and reimbursements for non-transit activities. M and A State Revenue Fund Created to account for the cost of mosquito and other arthropod control. Financing is provided by State matching funds on a dollar for dollar basis. Tourist Promotion Fund Created to account for revenues restricted for promotion, development and advertisement of Escambia County tourism. Financing is provided by a tourist development tax levied under Chapter Florida Statutes. Other Grant Projects Fund Created to account for financing provided from various State and Federal grants. Detention/Jail Commissary Fund Created to account for the cost of the inmate commissary and the inmate welfare fund; operated in the detention facility pursuant to Section , Florida Statutes. The fiscal management of the commissary is audited in conjunction with the audit of the County. Library Fund Created to account for the revenue and expenditures associated with administrative and operational functions of the West Florida Library System. A countywide Library MSTU assessment is imposed for the purpose of funding library services. Misdemeanor Probation Fund Created to account for the cost of supervision of the misdemeanor program. Financing is provided by a fee charged to a person on parole pursuant to Section , Florida Statutes. Article V Fund Created to account for revenues and costs for court related fees, charges, costs, fines and other monetary penalties. 93

114 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS - Continued Development Review Fund Created to account for fees generated by the review of all development plans within the County and support of the Development Review Committee, the Planning Board, the Board of Adjustments, the Rezoning Hearing Examiner and the Board of County Commissioners. Perdido Key Beach Mouse Fund Created to account for the Perdido Key Beach Mouse Special Assessment revenue established by Ordinance and and by interlocal agreement with the US Fish and Wildlife Service and the Florida Fish and Wildlife Commission. This revenue will be utilized for the mitigation process for impacts to the Perdido Key Beach Mouse habitat. State Housing Initiative Partnership Fund (SHIP) Created to account for the revenues and expenditures of the SHIP program, authorized pursuant to Section , Florida Statutes. State revenue sharing proceeds received by the County for the SHIP program are used to create partnerships that produce and preserve affordable homeownership and multifamily housing. 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. Escambia County Affordable Housing Fund Created to account for funding to assist with delivery of affordable housing assistance and support for low income families in Escambia County and the City of Pensacola, primarily in conjunction with the Escambia Consortium Home Program. The fund also provides a source for payment of up front costs while awaiting reimbursement from the HOME program letter of credit. CDBG HUD Entitlement Fund Created to account for Federal HUD Block Grant revenues and the expenditures. The HUD funded Community Block Grant program provides financial support primarily for low and moderate-income families in the County. Handicapped Parking Fines Fund Created to account for monies collected under Chapter 316, Florida Statutes, also known as the State Uniform Traffic Control, which authorizes counties to regulate the parking of vehicles and to enforce regulations relating to disabled persons parking. Family Mediation Fund Created to account for monies provided through a private grant and authorized under Chapters and , Florida Statutes. These funds were used to assure each minor child frequent and continuing contact with both parents after separation or dissolved marriages and to encourage parents to share the rights and responsibilities of child rearing. Fire Protection Fund Created to account for monies assessed by the Board of County Commissioners to property owners in unincorporated areas of Escambia County to provide for fire protection. 94

115 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS - Continued Emergency 911 Operations 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. HUD-CDBG Housing Rehabilitation Loan Fund Created to account for funding to provide assistance for low/moderate income families within the unincorporated county through the rehabilitation of several substandard homes. HUD Home Fund Created to account for the HUD Housing Assistance revenues and expenditures. This grant provides for the rehabilitation of severely substandard homes. Community Redevelopment Agency Fund The Community Redevelopment Agency (CRA) Fund was established to account for the revenues and expenditures of the redevelopment areas established within the County. The CRA Fund is a blended component unit of Escambia Country. Pursuant to Florida Statutes Section 163 Part III, the Community Redevelopment Act of 1969 authorized government to use tax increment financing as a means for community redevelopment. Southwest Sector Road Project Fund Created to account for revenues and expenditures associated with the planning and development of the County s Southwest Corridor road project. Bob Sikes Toll Facilities Fund Established by County Ordinance No which authorizes the collection of bridge tolls for uses of the Bob Sikes Toll Bridge by passage seekers. The Board of County Commissioners establish toll rates for the Bob Sikes Bridge in order to pay for the proper maintenance, administration, debt service of the bridge, and other expenses for parks and recreation on Santa Rosa Island as approved by the Board of County Commissioners. In addition to cash tolls, annual permits (transponder sales) may be purchased for access to the Bridge. Transportation Trust Fund Created pursuant to the provisions of Section Florida Statutes, to account for transportation related revenues and expenditures. The primary revenue source is fuel taxes which are the Seventh-cent/1 cent County, Ninth-cent, Local Option fuel tax, and Constitutional fuel tax. Fuel tax revenues are used to fund transportation expenditures allowable pursuant to Sections 206 and Section 366, Florida Statutes. MSBU Assessment Program Fund Created to account for monies collected for Municipal Service Benefit Units (MSBU) pursuant to County Ordinance No and Chapter 125, Florida Statutes. Master Drainage Basin Fund Created to account for monies to provide drainage within specific districts. 95

116 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS - Continued Clerk Program s This fund reflects the activities of the Office of the Clerk of the Circuit Court and Comptroller Trust Funds. Services provide are in accordance with provisions of the Florida Statutes Chapter for Records Modernization. Sheriff Program s This fund reflects the activities of the Escambia County Sheriff s Office; primarily to account for the collection and expenditures of US Treasury and US Justice forfeiture sharing programs, and for revenues and disbursements of various Federal and State Grants. Supervisor Program s This fund reflects the activities of the Escambia Supervisor of Elections Office; primarily to account for the revenues and disbursements of various Federal and State Grants. DEBT SERVICE FUND 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 report resources if legally mandated and financial resources that are being accumulated for principal and interest maturing in future. The County has the following Debt Service Fund: Debt Service Fund Created to account for the resources accumulated and payments made for principal and interest on long-term debt of governmental funds. 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: Federal Transit Administration Fund Created to account for the revenue received from the United States Department of Transportation and the costs associated federal transportation assistance. The Federal Transit Administration (FTA) provides capital assistance for mass transit projects including mass transit fixed route and ADA paratransit services for citizens through urban areas of Escambia County. FTA Funding is provided by Grants, State matching funds, and County matching funds. New Road Construction Fund Created account for the disbursements from the Local Option Gas Tax used for acquisition and construction of new roads.. 96

117 COMBINING BALANCE SHEET ALL NONMAJOR GOVERNMENTAL FUNDS September 30, 2014 Total Nonmajor Total Total Nonmajor Total Nonmajor Special Revenue Funds Nonmajor Debt Service Fund Capital Projects Funds Governmental Funds ASSETS Cash and Cash Equivalents $ 25,107,910 $ 917,683 $ 141,170 $ 26,166,763 Investments 26,287,144 1,142, ,768 27,605,519 Accounts Receivable 862, ,029 Due from Other Funds 217, ,726 Due from Other Governments 3,614, ,319 4,303,976 Inventories 506, ,033 Prepaid Items Total Assets $ 56,595,499 $ 2,060,290 $ 1,006,257 $ 59,662,046 LIABILITIES Accounts Payable $ 3,504,358 $ - $ 689,322 $ 4,193,680 Contracts Payable 122, ,269 Accrued Liabilities 1,190, ,190,443 Due to Other Funds 1,000, ,000,009 Advances Payable to Other Funds 675, ,124 Due to Other Governments 1,008, ,008,849 Deposits 121, ,365 Unearned Revenue 350, ,697 Total Liabilities 7,973, ,322 8,662,436 FUND BALANCES (deficits) Nonspendable Inventories 506, ,033 Restricted for Court Related Functions 4,240, ,240,911 Community Services 283, ,180 Debt Service - 2,060,290-2,060,290 Economic & Community Development 4,748, ,748,895 Fire & Rescue 4,829, ,829,063 Health Services 16, ,327 Inmate Welfare 1,005, ,005,494 Law Enforcement 484, ,244 Library 1,338, ,338,621 Mass Transit System 236, , ,503 Public Safety 2,644, ,644,209 Records Modernization Tech 2,755, ,755,849 Resource Conservation 168, ,629 Road Acquisition & Construction Housing Assistance 3,011, ,011,282 Tourism 5,864, ,864,172 Transportation & Drainage Improvements 1,877, ,877,828 Transportation Maintenance 344, ,825 Committed to: Community Services 1,424, ,424,269 Infrastructure Maintenance 8,387, ,387,441 Public Safety 1,957, ,957,801 Transportation Maintenance 2,497, ,497,207 Total Fund Balances 48,622,385 2,060, ,935 50,999,610 Total Liabilities, deferred inflow of resources, and fund balances $ 56,595,499 $ 2,060,290 $ 1,006,257 $ 59,662,046 97

118 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 Fund Total Nonmajor Capital Projects Funds Total Nonmajor Governmental Funds REVENUES Taxes $ 25,333,142 $ - $ - $ 25,333,142 Permits and Fees 235, ,927 Franchise Fees 1,744, ,744,560 Special Assessments 12,717, ,717,015 Intergovernmental Revenues 20,389, ,000 1,925,785 22,725,540 Charges for Services 11,710, ,710,203 Judgments and Fines 1,117, ,117,068 Investment Income 278,813 24,219 1, ,583 Miscellaneous Revenues 2,822, ,131 2,868,606 Total Revenues 76,348, ,257 1,973,467 78,756,644 EXPENDITURES Current: General Government 3,314, ,314,668 Public Safety 26,682, ,682,136 Physical Environment 570, ,378 Transportation 26,678, ,504 26,823,083 Economic Environment 12,796, ,796,024 Human Services 177, ,231 Culture/Recreation 4,394, ,394,178 Court-Related 3,594, ,594,637 Debt Service: Principal Retirement - 4,397,000-4,397,000 Interest and Fiscal Charges 382 3,237,281-3,237,663 Capital Outlay - - 1,856,675 1,856,675 Total Expenditures 78,208,213 7,634,281 2,001,179 87,843,673 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,859,293) (7,200,024) (27,712) (9,087,029) OTHER FINANCING SOURCES (USES) Transfers In 9,195,814 7,356,868-16,552,682 Transfers (Out) (5,009,487) - - (5,009,487) Total Other Financing Sources and (Uses) 4,186,327 7,356,868-11,543,195 Net Change in Fund Balances 2,327, ,844 (27,712) 2,456,166 Fund Balances - Beginning 46,295,351 1,903, ,647 48,543,444 Fund Balances - Ending $ 48,622,385 $ 2,060,290 $ 316,935 $ 50,999,610 98

119 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS September 30, 2014 Escambia County Restricted Fund Economic Development Fund Code Enforcement Fund Mass Transit Fund M&A State Revenue Fund ASSETS Cash and Cash Equivalents $ 638,807 $ 749,656 $ 810,961 $ 643,539 $ 16,327 Investments 784, ,397 1,009, ,271 - Accounts Receivable 33, , ,531 - Due from Other Funds 11,155-38, Due from Other Governments 11, ,026,012 - Inventories 5, ,955 - Total Assets $ 1,484,752 $ 1,683,053 $ 2,031,424 $ 2,874,308 $ 16,327 LIABILITIES Accounts Payable $ 25,485 $ 157,204 $ 17,011 $ 1,454,743 $ - Contracts Payable Accrued Liabilities 6,326-56, Due to Other Funds ,000,000 - Advances Payable to Other Funds Due to Other Governments 23, ,505 - Deposits Unearned Revenue Total Liabilities 54, ,204 73,623 2,456,248 - FUND BALANCES Nonspendable: Inventories 5, ,955 - Restricted for: Court Related Functions Community Services Economic & Community Development - 1,525, Fire & Rescue Health Services ,327 Inmate Welfare Law Enforcement Library Mass Transit System ,105 - Public Safety Records Modernization Tech Resource Conservation Housing Assistance Tourism Transportation & Drainage Improvements Transportation Maintenance Committed to: Community Services 1,424, Infrastructure Maintenance Public Safety - - 1,957, Transportation Maintenance Total Fund Balances 1,429,921 1,525,849 1,957, ,060 16,327 Total Liabilities, deferred inflow of resources, and fund balances $ 1,484,752 $ 1,683,053 $ 2,031,424 $ 2,874,308 $ 16,327 Continued 99

120 Tourist Promotion Fund Other Grant Projects Fund Detention/Jail Commissary Fund Library Fund Misdemeanor Probation Fund Article V Fund Development Review Fund $ 2,947,651 $ 490,545 $ 570,469 $ 670,709 $ 653,946 $ 2,046,614 $ 175,864 3,670, , , , ,227 2,548, , , , , ,611-6,222-62, , $ 6,617,893 $ 1,597,856 $ 1,295,376 $ 1,510,823 $ 1,468,173 $ 4,814,933 $ 394,833 $ 749,802 $ 176,672 $ 62,694 $ 55,537 $ 31,160 $ 101,415 $ 2,771-45, ,919 5,715 6, ,869 66,627 9,111 11, ,983 7,796 6, , , , , , , , ,009 1,003,493 14, , , ,811, ,005, ,338, , ,364, , ,864, , ,864,172 1,232,771 1,102,521 1,338,621 1,364,164 3,811, ,208 $ 6,617,893 $ 1,597,856 $ 1,295,376 $ 1,510,823 $ 1,468,173 $ 4,814,933 $ 394,

121 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS September 30, 2014 Perdido Key Beach Mouse Fund State Housing Initiative Partnership (SHIP) Fund Law Enforcement Trust Fund Escambia County Affordable Housing Fund ASSETS Cash and Cash Equivalents $ 75,110 $ 1,115,458 $ 212,955 $ 529,085 Investments 93, , ,763 Accounts Receivable - 6, ,000 Due from Other Funds Due from Other Governments - - 6, Inventories Total Assets $ 168,629 $ 1,122,288 $ 484,244 $ 1,488,748 LIABILITIES Accounts Payable $ - $ 150 $ - $ 2,975 Contracts Payable Accrued Liabilities Due to Other Funds Advances Payable to Other Funds Due to Other Governments Deposits Unearned Revenue Total Liabilities ,975 FUND BALANCES Nonspendable: Inventories Restricted for: Court Related Functions Community Services Economic & Community Development Fire & Rescue Health Services Inmate Welfare Law Enforcement ,244 - Library Mass Transit System Public Safety Records Modernization Tech Resource Conservation 168, Housing Assistance - 1,122,138-1,485,773 Tourism Transportation & Drainage Improvements Transportation Maintenance Committed to: Community Services Infrastructure Maintenance Public Safety Transportation Maintenance Total Fund Balances 168,629 1,122, ,244 1,485,773 Total Liabilities, deferred inflow of resources, and fund balances $ 168,629 $ 1,122,288 $ 484,244 $ 1,488,748 Continued 101

122 CDBG - HUD Entitlement Fund Handicapped Parking Fines Fund Family Mediation Fund Fire Protection Fund Emergency 911 Operations Fund HUD-CDBG Housing Rehabilitation Loan Fund HUD Home Fund $ 158,558 $ 124,629 $ 49,092 $ 1,915,806 $ 257,024 $ 14,531 $ 26, , ,175 61,123 2,385, ,020 18,092 32, ,203 36,273-3,754-3, , , ,520-10, $ 436,942 $ 283,558 $ 110,215 $ 4,355,386 $ 1,009,564 $ 55,826 $ 106,109 $ 31,828 $ 378 $ 700 $ 154,322 $ 53,963 $ - $ 1, , , , , ,964 20,541-2, , , ,383 74,504-6, , , ,894, , , ,826 99, , , ,515 3,894, ,060 55,826 99,631 $ 436,942 $ 283,558 $ 110,215 $ 4,355,386 $ 1,009,564 $ 55,826 $ 106,

123 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS September 30, 2014 Community Redevelopment Agency Fund Southwest Sector Road Project Fund Bob Sikes Toll Facilities Fund Transportation Trust Fund ASSETS Cash and Cash Equivalents $ 1,470,600 $ 491,295 $ 3,806,176 $ 898,026 Investments 1,831, ,712 4,737,821 1,118,040 Accounts Receivable ,398 Due from Other Funds Due from Other Governments ,295,396 Inventories ,399 Total Assets $ 3,301,643 $ 1,103,007 $ 8,543,997 $ 3,535,259 LIABILITIES Accounts Payable $ 48,945 $ - $ 68,541 $ 259,006 Contracts Payable ,406 - Accrued Liabilities 26,483-4, ,366 Due to Other Funds Advances Payable to Other Funds Due to Other Governments 3,169-7,474 10,888 Deposits ,384 Unearned Revenue Total Liabilities 78, , ,653 FUND BALANCES Nonspendable: Inventories ,399 Restricted for: Court Related Functions Community Services Economic & Community Development 3,223, Fire & Rescue Health Services Inmate Welfare Law Enforcement Library Mass Transit System Public Safety Records Modernization Tech Resource Conservation Housing Assistance Tourism Transportation & Drainage Improvements - 1,103, Transportation Maintenance Committed to: Community Services Infrastructure Maintenance - - 8,387,441 - Public Safety Transportation Maintenance ,497,207 Total Fund Balances 3,223,046 1,103,007 8,387,441 2,718,606 Total Liabilities, deferred inflow of resources, and fund balances $ 3,301,643 $ 1,103,007 $ 8,543,997 $ 3,535,259 Continued 103

124 MSBU Assessment Program Fund Master Drainage Basin Fund Clerk Programs Sheriff Programs Supervisor of Elections Programs Total Nonmajor Special Revenue Funds $ 471,632 $ 342,637 $ 2,664,198 $ 69,653 $ - $ 25,107, , , ,287, , , ,464 13, ,614, ,033 $ 1,059,315 $ 769,259 $ 2,787,914 $ 83,095 $ 750 $ 56,595,499 $ 39,304 $ 7,416 $ 536 $ - $ 750 3,504, , , ,190, ,000, , , ,442-1,008, , ,301 69, , ,490 7,416 32,065 83, ,973, , ,240, , ,748, ,829, , ,005, , ,338, , ,644, ,755, ,755, , ,011, ,864, , ,877, , , ,424, ,387, ,957, ,497, , ,843 2,755, ,622,385 $ 1,059,315 $ 769,259 $ 2,787,914 $ 83,095 $ 750 $ 56,595,

125 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS For the Year Ended September 30, 2014 Escambia County Restricted Fund Economic Development Fund Code Enforcement Fund Mass Transit Fund M&A State Revenue Fund REVENUES Taxes $ - $ - $ - $ 3,203,039 $ - Permits and Fees Franchise Fees - - 1,744, Special Assessments Intergovernmental Revenues 102, ,813,657 29,456 Charges for Services 236, ,375,222 - Judgments and Fines , Investment Income 8,126 17,275 9,149 3,770 - Miscellaneous Revenues 74,554-21,532 61,475 - Total Revenues 421,895 17,275 1,992,905 10,457,163 29,456 EXPENDITURES Current: General Government 23, Public Safety 82,597-2,167, Physical Environment 299, Transportation ,474,039 - Economic Environment - 1,839, Human Services 5, ,891 Culture/Recreation 42, Court-Related Debt Service: Interest and Fiscal Charges Total Expenditures 453,996 1,839,476 2,167,957 10,474,039 34,891 Excess (Deficiency) of Revenues Over (Under) Expenditures (32,101) (1,822,201) (175,052) (16,876) (5,435) OTHER FINANCING SOURCES (USES) Transfers In 67, , Transfers (Out) Total Other Financing Sources and (Uses) 67, , Net Change in Fund Balances 35,399 (1,822,201) 623,765 (16,876) (5,435) Fund Balances - Beginning 1,394,522 3,348,050 1,334, ,936 21,762 Fund Balances - Ending $ 1,429,921 $ 1,525,849 $ 1,957,801 $ 418,060 $ 16,327 Continued 105

126 Tourist Promotion Fund Other Grant Projects Fund Detention/Jail Commissary Fund Library Fund Misdemeanor Probation Fund Article V Fund Development Review Fund $ 8,395,715 $ - $ - $ 4,692,695 $ - $ - $ , ,222, ,568-1,075, , ,331 27,073 2,425,490 1,902, ,030-2,769-93,597 16, ,322 6,707 1,767 3,911 5,543 26,442 1, , , , , ,426,562 2,277,715 1,328,743 5,657,385 2,677,428 3,003, , , ,540 1,223,633-2,231,930 76, , , , ,503 6,861, , , , ,522-4,318, , ,269, ,016,778 2,300,996 1,223,633 4,318,764 2,231,930 2,388, ,474 1,409,784 (23,281) 105,110 1,338, , , , , ,069 - (1,300,000) (665,000) - (1,300,000) - 997, (266,931) - 109,784 (23,281) 1,102,521 1,338, , , ,674 5,754,388 1,256, ,666 3,462, ,534 $ 5,864,172 $ 1,232,771 $ 1,102,521 $ 1,338,621 $ 1,364,164 $ 3,811,440 $ 380,

127 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS For the Year Ended September 30, 2014 Perdido Key Beach Mouse Fund State Housing Initiative Partnership (SHIP) Fund Law Enforcement Trust Fund Escambia County Affordable Housing Fund REVENUES Taxes $ - $ - $ - $ - Permits and Fees Franchise Fees Special Assessments 21, Intergovernmental Revenues - 544, Charges for Services Judgments and Fines ,654 - Investment Income 909-2,911 16,448 Miscellaneous Revenues - 96, ,937 Total Revenues 21, , , ,385 EXPENDITURES Current: General Government Public Safety ,869 - Physical Environment Transportation Economic Environment - 650, ,429 Human Services Culture/Recreation Court-Related Debt Service: Interest and Fiscal Charges Total Expenditures - 650, , ,429 Excess (Deficiency) of Revenues Over (Under) Expenditures 21,909 (9,232) (8,304) (138,044) OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) Total Other Financing Sources and (Uses) Net Change in Fund Balances 21,909 (9,232) (8,304) (138,044) Fund Balances - Beginning 146,720 1,131, ,548 1,623,817 Fund Balances - Ending $ 168,629 $ 1,122,138 $ 484,244 $ 1,485,773 Continued 107

128 CDBG - HUD Entitlement Fund Handicapped Parking Fines Fund Family Mediation Fund Fire Protection Fund Emergency 911 Operations Fund HUD-CDBG Housing Rehabilitation Loan Fund HUD Home Fund $ - $ - $ - $ - $ - $ - $ , ,768, ,841, ,940 1,322,266-1,088,462-29, , ,331 1, ,816 5,705 1,258 1,747 66, ,537-7, ,071 1,910,175 30, ,205,593 1,327,971 8,588 1,194, ,906-11,799,789 1,266, ,714, ,216 1,132,562-7, , ,714,762 14,406 4,111 11,799,789 1,266,783 1,216 1,132, ,413 16,380 (3,462) 405,804 61,188 7,372 61, (185,000) - - (230,875) (658,222) - - (185,000) - - (230,875) (658,222) ,413 16,380 (3,462) 174,929 (597,034) 7,372 61, , , ,977 3,719,074 1,532,094 48,454 37,913 $ 247,914 $ 283,180 $ 109,515 $ 3,894,003 $ 935,060 $ 55,826 $ 99,

129 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS For the Year Ended September 30, 2014 Community Redevelopment Agency Fund Southwest Sector Road Project Fund Bob Sikes Toll Facilities Fund Transportation Trust Fund REVENUES Taxes $ 584,014 $ - $ - $ 8,457,679 Permits and Fees Franchise Fees Special Assessments Intergovernmental Revenues ,589,903 Charges for Services - - 3,327, ,168 Judgments and Fines Investment Income 21,191 10,919 43,157 8,171 Miscellaneous Revenues , ,381 Total Revenues 605,396 10,919 3,908,472 14,153,977 EXPENDITURES Current: General Government 1,244,804-1,661,367 - Public Safety ,150,249 Physical Environment Transportation - 791,090-13,971,445 Economic Environment Human Services Culture/Recreation Court-Related Debt Service: Interest and Fiscal Charges Total Expenditures 1,244, ,090 1,661,367 20,121,694 Excess (Deficiency) of Revenues Over (Under) Expenditures (639,408) (780,171) 2,247,105 (5,967,717) OTHER FINANCING SOURCES (USES) Transfers In 185, ,749,017 Transfers (Out) - - (972,979) - Total Other Financing Sources and (Uses) 185,000 - (972,979) 6,749,017 Net Change in Fund Balances (454,408) (780,171) 1,274, ,300 Fund Balances - Beginning 3,677,454 1,883,178 7,113,315 1,937,306 Fund Balances - Ending $ 3,223,046 $ 1,103,007 $ 8,387,441 $ 2,718,606 Continued 109

130 MSBU Assessment Program Fund Master Drainage Basin Fund Clerk Programs Sheriff Programs Supervisor of Elections Programs Total Nonmajor Special Revenue Funds $ - $ - $ - $ - $ - $ 25,333, , ,744, , , ,717, , ,416 48,732 20,389, , ,710, ,561 75,743-1,117,068 6,805 4, , , ,822, , ,856 1,579, ,159 48,732 76,348, ,732 3,314, ,602-26,682, , , , ,678, ,796, , ,394, , ,594, , , , ,602 48,732 78,208, ,117 (7,970) 593,250 (23,443) - (1,859,293) ,195, (997,411) - (5,009,487) (997,411) - 4,186, ,117 (7,970) 593,250 (1,020,854) - 2,327, , ,813 2,162,599 1,020,854-46,295,351 $ 344,825 $ 761,843 $ 2,755,849 $ - $ - $ 48,622,

131 BUDGETARY COMPARISON SCHEDULE ESCAMBIA COUNTY RESTRICTED FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 97,280 $ 102,400 $ 5,120 Charges for Services 181, ,815 55,199 Investment Income - 8,126 8,126 Miscellaneous Revenues 59,790 74,554 14,764 Total Revenues 338, ,895 83,209 EXPENDITURES Current: General Government 151,318 23, ,524 Public Safety 760,482 82, ,885 Physical Environment 700, , ,609 Transportation 5,337-5,337 Human Services 16,431 5,431 11,000 Culture and Recreation 144,589 42, ,697 Total Expenditures 1,779, ,996 1,325,052 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,440,362) (32,101) 1,408,261 OTHER FINANCING SOURCES (USES) Transfers In 67,500 67,500 - Total Other Financing Sources and (Uses) 67,500 67,500 - Net Change in Fund Balance (1,372,862) 35,399 1,408,261 Fund Balance - Beginning 1,372,862 1,394,522 21,660 Fund Balance - Ending $ - $ 1,429,921 $ 1,429,

132 BUDGETARY COMPARISON SCHEDULE ECONOMIC DEVELOPMENT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Investment Income $ - $ 17,275 $ 17,275 Total Revenues - 17,275 17,275 EXPENDITURES Current: Economic Environment 3,348,050 1,839,476 1,508,574 Total Expenditures 3,348,050 1,839,476 1,508,574 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,348,050) (1,822,201) 1,525,849 Net Change in Fund Balance (3,348,050) (1,822,201) 1,525,849 Fund Balance - Beginning 3,348,050 3,348,050 - Fund Balance - Ending $ - $ 1,525,849 $ 1,525,

133 BUDGETARY COMPARISON SCHEDULE CODE ENFORCEMENT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Franchise Fees $ 1,377,500 $ 1,744,560 $ 367,060 Charges for Services Judgments and Fines 166, ,344 51,094 Investment Income - 9,149 9,149 Miscellaneous Revenues ,532 20,582 Total Revenues 1,544,700 1,992, ,205 EXPENDITURES Current: Public Safety 3,677,553 2,167,957 1,509,596 Total Expenditures 3,677,553 2,167,957 1,509,596 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,132,853) (175,052) 1,957,801 OTHER FINANCING SOURCES (USES) Transfers In 798, ,817 - Total Other Financing Sources and (Uses) 798, ,817 - Net Change in Fund Balance (1,334,036) 623,765 1,957,801 Fund Balance - Beginning 1,334,036 1,334,036 - Fund Balance - Ending $ - $ 1,957,801 $ 1,957,

134 BUDGETARY COMPARISON SCHEDULE MASS TRANSIT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 3,192,000 $ 3,203,039 $ 11,039 Intergovernmental 8,523,296 5,813,657 (2,709,639) Charges for Service 1,377,500 1,375,222 (2,278) Investment Income - 3,770 3,770 Miscellaneous Revenues - 61,475 61,475 Total Revenues 13,092,796 10,457,163 (2,635,633) EXPENDITURES Current: Transportation 13,092,796 10,474,039 2,618,757 Total Expenditures 13,092,796 10,474,039 2,618,757 Excess (Deficiency) of Revenues Over (Under) Expenditures - (16,876) (16,876) Net Change in Fund Balance - (16,876) (16,876) Fund Balance - Beginning - 434, ,936 Fund Balance - Ending $ - $ 418,060 $ 418,

135 BUDGETARY COMPARISON SCHEDULE M & A STATE REVENUE FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental $ 29,456 $ 29,456 $ - Total Revenues 29,456 29,456 - EXPENDITURES Current: Human Services 51,218 34,891 16,327 Total Expenditures 51,218 34,891 16,327 Excess (Deficiency) of Revenues Over (Under) Expenditures (21,762) (5,435) 16,327 Net Change in Fund Balance (21,762) (5,435) 16,327 Fund Balance - Beginning 21,762 21,762 - Fund Balance - Ending $ - $ 16,327 $ 16,

136 BUDGETARY COMPARISON SCHEDULE TOURIST PROMOTION FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 7,139,967 $ 8,395,715 $ 1,255,748 Permits and Fees Intergovernmental Revenues 33,501 - (33,501) Investment Income - 30,322 30,322 Miscellaneous Revenues Total Revenues 7,173,468 8,426,562 1,253,094 EXPENDITURES Current: Physical Environment 205, ,665 50,123 Economic Environment 8,913,195 6,861,113 2,052,082 Total Expenditures 9,118,983 7,016,778 2,102,205 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,945,515) 1,409,784 3,355,299 OTHER FINANCING SOURCES (USES) Transfers (Out) (1,500,000) (1,300,000) 200,000 Total Other Financing Sources and (Uses) (1,500,000) (1,300,000) 200,000 Net Change in Fund Balance (3,445,515) 109,784 3,555,299 Fund Balance - Beginning 3,445,515 5,754,388 2,308,873 Fund Balance - Ending $ - $ 5,864,172 $ 5,864,

137 BUDGETARY COMPARISON SCHEDULE OTHER GRANT PROJECTS FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 5,358,612 $ 2,222,480 $ (3,136,132) Charges for Services - 26,122 26,122 Judgments and Fines - 2,769 2,769 Investment Income - 6,707 6,707 Miscellaneous Revenues 13,647 19,637 5,990 Total Revenues 5,372,259 2,277,715 (3,094,544) EXPENDITURES Current: General Government 537, ,701 Public Safety 1,778, , ,284 Physical Environment 1,027, , ,828 Transportation 777, , ,001 Economic Environment 332, ,254 40,665 Human Services 98,408 86,969 11,439 Culture and Recreation 418,095 32, ,573 Court-Related 1,657, ,097 1,322,824 Total Expenditures 6,628,311 2,300,996 4,327,315 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,256,052) (23,281) 1,232,771 Net Change in Fund Balance (1,256,052) (23,281) 1,232,771 Fund Balance - Beginning 1,256,052 1,256,052 - Fund Balance - Ending $ - $ 1,232,771 $ 1,232,

138 BUDGETARY COMPARISON SCHEDULE DETENTION/JAIL COMMISSARY FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Charges for Services $ 1,488,430 $ 844,331 $ (644,099) Investment Income - 1,767 1,767 Miscellaneous Revenues - 482, ,645 Total Revenues 1,488,430 1,328,743 (159,687) EXPENDITURES Current: Public Safety 1,488,430 1,223, ,797 Total Expenditures 1,488,430 1,223, ,797 Excess (Deficiency) of Revenues Over (Under) Expenditures - 105, ,110 OTHER FINANCING SOURCES (USES) Transfers In - 997, ,411 Total Other Financing Sources and (Uses) - 997, ,411 Net Change in Fund Balance - 1,102,521 1,102,521 Fund Balance - Beginning Fund Balance - Ending $ - $ 1,102,521 $ 1,102,

139 BUDGETARY COMPARISON SCHEDULE LIBRARY FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ 4,628,685 $ 4,692,695 $ 64,010 Intergovernmental Revenues 693, ,568 27,670 Charges for Services - 27,073 27,073 Judgments and Fines 101,650 93,597 (8,053) Investment Income - 3,911 3,911 Miscellaneous Revenues 123, ,541 (5,067) Total Revenues 5,547,841 5,657, ,544 EXPENDITURES Current: Culture and Recreation 5,547,841 4,318,764 1,229,077 Total Expenditures 5,547,841 4,318,764 1,229,077 Excess (Deficiency) of Revenues Over (Under) Expenditures - 1,338,621 1,338,621 Net Change in Fund Balance - 1,338,621 1,338,621 Fund Balance - Beginning Fund Balance - Ending $ - $ 1,338,621 $ 1,338,

140 BUDGETARY COMPARISON SCHEDULE MISDEMEANOR PROBATION FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Charges for Services $ 2,191,260 $ 2,425,490 $ 234,230 Judgements and Fines 14,250 16,400 2,150 Investment Income - 5,543 5,543 Miscellaneous Revenue 23, , ,435 Total Revenues 2,229,070 2,677, ,358 EXPENDITURES Current: Public Safety 3,147,736 2,231, ,806 Total Expenditures 3,147,736 2,231, ,806 Excess (Deficiency) of Revenues Over (Under) Expenditures (918,666) 445,498 1,364,164 Net Change in Fund Balance (918,666) 445,498 1,364,164 Fund Balance - Beginning 918, ,666 - Fund Balance - Ending $ - $ 1,364,164 $ 1,364,

141 BUDGETARY COMPARISON SCHEDULE ARTICLE V FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental $ 1,021,286 $ 1,075,038 $ 53,752 Charges for Services 1,807,161 1,902,275 95,114 Investment Income - 26,442 26,442 Miscellaneous Revenues Total Revenues 2,828,447 3,003, ,338 EXPENDITURES Current: Public Safety 651,467 76, ,186 Human Services 54,397 42,440 11,957 Court-Related 5,936,439 2,269,603 3,666,836 Total Expenditures 6,642,303 2,388,324 4,253,979 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,813,856) 615,461 4,429,317 OTHER FINANCING SOURCES (USES) Transfers In 398, ,069 - Transfers (Out) (665,000) (665,000) - Total Other Financing Sources and (Uses) (266,931) (266,931) - Net Change in Fund Balance (4,080,787) 348,530 4,429,317 Fund Balance - Beginning 4,080,787 3,462,910 (617,877) Fund Balance - Ending $ - $ 3,811,440 $ 3,811,

142 BUDGETARY COMPARISON SCHEDULE DEVELOPMENT REVIEW FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Permits and Fees $ 114,000 $ 165,484 $ 51,484 Charges for Services 241, , ,730 Investment Income - 1,634 1,634 Miscellaneous Revenues 12,350 - (12,350) Total Revenues 367, , ,498 EXPENDITURES Current: General Government 335, ,971 - Transportation 57,503 57,503 - Total Expenditures 393, ,474 - Excess (Deficiency) of Revenues Over (Under) Expenditures (25,824) 129, ,498 Net Change in Fund Balance (25,824) 129, ,498 Fund Balance - Beginning 25, , ,710 Fund Balance - Ending $ - $ 380,208 $ 380,

143 BUDGETARY COMPARISON SCHEDULE PERDIDO KEY BEACH MOUSE FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Special Assessments $ 68,500 $ 21,000 $ (47,500) Investment Income Total Revenues 68,500 21,909 (46,591) EXPENDITURES Current: Physical Environment 146, ,720 Total Expenditures 146, ,720 Excess (Deficiency) of Revenues Over (Under) Expenditures (78,220) 21, ,129 Net Change in Fund Balance (78,220) 21, ,129 Fund Balance - Beginning 78, ,720 68,500 Fund Balance - Ending $ - $ 168,629 $ 168,

144 BUDGETARY COMPARISON SCHEDULE STATE HOUSING INITIATIVE PARTNERSHIP FUND (SHIP) For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 2,017,154 $ 544,030 $ (1,473,124) Investment Income 2,000 - (2,000) Miscellaneous Revenues 303,341 96,950 (206,391) Total Revenues 2,322, ,980 (1,681,515) EXPENDITURES Current: Economic Environment 2,322, ,212 1,672,283 Total Expenditures 2,322, ,212 1,672,283 Excess (Deficiency) of Revenues Over (Under) Expenditures - (9,232) (9,232) Net Change in Fund Balance - (9,232) (9,232) Fund Balance - Beginning - 1,131,370 1,131,370 Fund Balance - Ending $ - $ 1,122,138 $ 1,122,

145 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 $ 367,443 $ 438,654 $ 71,211 Investment Income - 2,911 2,911 Total Revenues 367, ,565 74,122 EXPENDITURES Current: Public Safety 859, , ,122 Total Expenditures 859, , ,122 Excess (Deficiency) of Revenues Over (Under) Expenditures (492,548) (8,304) 484,244 Net Change in Fund Balance (492,548) (8,304) 484,244 Fund Balance - Beginning 492, ,548 - Fund Balance - Ending $ - $ 484,244 $ 484,

146 BUDGETARY COMPARISON SCHEDULE ESCAMBIA COUNTY AFFORDABLE HOUSING FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental $ - $ - $ - Investment Income 15,000 16,448 1,448 Miscellaneous Revenues 298, ,937 (148,880) Total Revenues 313, ,385 (147,432) EXPENDITURES Current: Economic Environment 1,668, ,429 1,364,388 Total Expenditures 1,668, ,429 1,364,388 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,355,000) (138,044) 1,216,956 Net Change in Fund Balance (1,355,000) (138,044) 1,216,956 Fund Balance - Beginning 1,355,000 1,623, ,817 Fund Balance - Ending $ - $ 1,485,773 $ 1,485,

147 BUDGETARY COMPARISON SCHEDULE CDBG - HUD ENTITLEMENT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 4,082,700 $ 1,841,406 $ (2,241,294) Investment Income 5,000 2,331 (2,669) Miscellaneous Revenues 185,460 66,438 (119,022) Total Revenues 4,273,160 1,910,175 (2,362,985) EXPENDITURES Current: Economic Environment 4,088,160 1,714,762 2,373,398 Total Expenditures 4,088,160 1,714,762 2,373,398 Excess (Deficiency) of Revenues Over (Under) Expenditures 185, ,413 10,413 OTHER FINANCING SOURCES (USES) Transfers (Out) (185,000) (185,000) - Total Other Financing Sources and (Uses) (185,000) (185,000) - Net Change in Fund Balance - 10,413 10,413 Fund Balance - Beginning - 237, ,501 Fund Balance - Ending $ - $ 247,914 $ 247,

148 BUDGETARY COMPARISON SCHEDULE HANDICAPPED PARKING FINES FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Charges for Services $ 33,250 $ 29,221 $ (4,029) Investment Income - 1,565 1,565 Total Revenues 33,250 30,786 (2,464) EXPENDITURES Current: Public Safety 100,073 6,906 93,167 Human Services 199,978 7, ,478 Total Expenditures 300,051 14, ,645 Excess (Deficiency) of Revenues Over (Under) Expenditures (266,801) 16, ,181 Net Change in Fund Balance (266,801) 16, ,181 Fund Balance - Beginning 266, ,800 (1) Fund Balance - Ending $ - $ 283,180 $ 283,

149 BUDGETARY COMPARISON SCHEDULE FAMILY MEDIATION FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Investment Income $ - $ 649 $ 649 Total Revenues EXPENDITURES Current: Court-Related 112,977 4, ,866 Total Expenditures 112,977 4, ,866 Excess (Deficiency) of Revenues Over (Under) Expenditures (112,977) (3,462) 109,515 Net Change in Fund Balance (112,977) (3,462) 109,515 Fund Balance - Beginning 112, ,977 - Fund Balance - Ending $ - $ 109,515 $ 109,

150 BUDGETARY COMPARISON SCHEDULE FIRE PROTECTION FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Permits and Fees $ 47,500 $ 69,743 $ 22,243 Special Assessments 10,735,000 11,768,557 1,033,557 Intergovernmental Revenues 15,200 20,940 5,740 Charges for Services 190, ,000 10,000 Investment Income 38,300 35,816 (2,484) Miscellaneous Revenues - 110, ,537 Total Revenues 11,026,000 12,205,593 1,179,593 EXPENDITURES Current: Public Safety 14,514,199 11,799,789 2,714,410 Total Expenditures 14,514,199 11,799,789 2,714,410 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,488,199) 405,804 3,894,003 OTHER FINANCING SOURCES (USES) Transfers (Out) (230,875) (230,875) - Total Other Financing Sources and (Uses) (230,875) (230,875) - Net Change in Fund Balance (3,719,074) 174,929 3,894,003 Fund Balance - Beginning 3,719,074 3,719,074 - Fund Balance - Ending $ - $ 3,894,003 $ 3,894,

151 BUDGETARY COMPARISON SCHEDULE EMERGENCY 911 OPERATIONS FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 1,349,000 $ 1,322,266 $ (26,734) Investment Income - 5,705 5,705 Total Revenues 1,349,000 1,327,971 (21,029) EXPENDITURES Current: Public Safety 2,222,872 1,266, ,089 Total Expenditures 2,222,872 1,266, ,089 Excess (Deficiency) of Revenues Over (Under) Expenditures (873,872) 61, ,060 OTHER FINANCING SOURCES (USES) Transfers (Out) (658,222) (658,222) - Total Other Financing Sources and (Uses) (658,222) (658,222) - Net Change in Fund Balance (1,532,094) (597,034) 935,060 Fund Balance - Beginning 1,532,094 1,532,094 - Fund Balance - Ending $ - $ 935,060 $ 935,

152 BUDGETARY COMPARISON SCHEDULE HUD-CDGB HOUSING REHABILITATION LOAN FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 48,000 $ - $ (48,000) Investment Income 2,000 1,258 (742) Miscellaneous Revenues - 7,330 7,330 Total Revenues 50,000 8,588 (41,412) EXPENDITURES Current: Economic Environment 98,454 1,216 97,238 Total Expenditures 98,454 1,216 97,238 Excess (Deficiency) of Revenues Over (Under) Expenditures (48,454) 7,372 55,826 Net Change in Fund Balance (48,454) 7,372 55,826 Fund Balance - Beginning 48,454 48,454 - Fund Balance - Ending $ - $ 55,826 $ 55,

153 BUDGETARY COMPARISON SCHEDULE HUD HOME FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 3,706,944 $ 1,088,462 $ (2,618,482) Investment Income - 1,747 1,747 Miscellaneous Revenues 96, ,071 8,071 Total Revenues 3,802,944 1,194,280 (2,608,664) EXPENDITURES Current: Economic Environment 3,802,944 1,132,562 2,670,382 Total Expenditures 3,802,944 1,132,562 2,670,382 Excess (Deficiency) of Revenues Over (Under) Expenditures - 61,718 61,718 Net Change in Fund Balance - 61,718 61,718 Fund Balance - Beginning - 37,913 37,913 Fund Balance - Ending $ - $ 99,631 $ 99,

154 BUDGETARY COMPARISON SCHEDULE COMMUNITY REDEVELOPMENT AGENCY FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Taxes $ - $ 584,014 $ 584,014 Investment Income - 21,191 21,191 Miscellaneous Revenues Total Revenues - 605, ,396 EXPENDITURES Current: General Government 4,446,468 1,244,804 3,201,664 Total Expenditures 4,446,468 1,244,804 3,201,664 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,446,468) (639,408) 3,807,060 OTHER FINANCING SOURCES (USES) Transfers In 769, ,000 (584,014) Transfers (Out) Total Other Financing Sources and (Uses) 769, ,000 (584,014) Net Change in Fund Balance (3,677,454) (454,408) 3,223,046 Fund Balance - Beginning 3,677,454 3,677,454 - Fund Balance - Ending $ - $ 3,223,046 $ 3,223,

155 BUDGETARY COMPARISON SCHEDULE SOUTHWEST SECTOR ROAD PROJECT FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 1,594,358 $ - $ (1,594,358) Investment Income - 10,919 10,919 Total Revenues 1,594,358 10,919 (1,583,439) EXPENDITURES Current: Transportation 3,477, ,090 2,686,446 Total Expenditures 3,477, ,090 2,686,446 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,883,178) (780,171) 1,103,007 Net Change in Fund Balance (1,883,178) (780,171) 1,103,007 Fund Balance - Beginning 1,883,178 1,883,178 - Fund Balance - Ending $ - $ 1,103,007 $ 1,103,

156 BUDGETARY COMPARISON SCHEDULE BOB SIKES TOLL FACILITIES FUND For the Year Ended September 30, 2014 Budget Actual Amounts Variance with Budget - Over (Under) REVENUES Charges for Services $ 3,030,500 $ 3,327,729 $ 297,229 Investment Income - 43,157 43,157 Miscellaneous Revenues - 537, ,586 Total Revenues 3,030,500 3,908, ,972 EXPENDITURES Current: General Government 3,294,605 1,661,367 1,633,238 Total Expenditures 3,294,605 1,661,367 1,633,238 Excess (Deficiency) of Revenues Over (Under) Expenditures (264,105) 2,247,105 2,511,210 OTHER FINANCING SOURCES Transfers (Out) (975,111) (972,979) 2,132 Total Other Financing Sources (975,111) (972,979) 2,132 Net Change in Fund Balance (1,239,216) 1,274,126 2,513,342 Fund Balance - Beginning 1,239,216 7,113,315 5,874,099 Fund Balance - Ending $ - $ 8,387,441 $ 8,387,

157 BUDGETARY COMPARISON SCHEDULE TRANSPORTATION TRUST FUND For the Year Ended September 30, 2014 REVENUES Budget Actual Amounts Variance with Budget - Over (Under) Taxes $ 8,018,000 $ 8,457,679 $ 439,679 Permits and Fees Intergovernmental Revenues 4,049,375 4,589, ,528 Charges for Services 267, ,168 90,268 Investment Income - 8,171 8,171 Miscellaneous Revenues 354, , ,268 Total Revenues 12,689,388 14,153,977 1,464,589 EXPENDITURES Current: Public Safety 6,058,200 6,150,249 (92,049) Transportation 15,076,463 13,971,445 1,105,018 Total Expenditures 21,134,663 20,121,694 1,012,969 Excess (Deficiency) of Revenues Over (Under) Expenditures (8,445,275) (5,967,717) 2,477,558 OTHER FINANCING SOURCES Transfers In 6,749,017 6,749,017 - Total Other Financing Sources 6,749,017 6,749,017 - Net Change in Fund Balance (1,696,258) 781,300 2,477,558 Fund Balance - Beginning 1,696,258 1,937, ,048 Fund Balance - Ending $ - $ 2,718,606 $ 2,718,

158 BUDGETARY COMPARISON SCHEDULE MSBU ASSESSMENT PROGRAM FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Special Assessments $ 730,951 $ 824,187 $ 93,236 Investment Income - 6,805 6,805 Total Revenues 730, , ,041 EXPENDITURES Current: Transportation 899, , ,876 Debt Service Principal Retirement 33,103-33,103 Interest and Fiscal Charges 4, ,805 Total Expenditures 936, , ,784 Excess (Deficiency) of Revenues Over (Under) Expenditures (205,708) 139, ,825 Net Change in Fund Balance (205,708) 139, ,825 Fund Balance - Beginning 205, ,708 - Fund Balance - Ending $ - $ 344,825 $ 344,

159 BUDGETARY COMPARISON SCHEDULE MASTER DRAINAGE BASIN FUND For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Special Assessments $ 48,355 $ 103,271 $ 54,916 Investment Income - 4,585 4,585 Total Revenues 48, ,856 59,501 EXPENDITURES Current: Transportation 818, , ,342 Total Expenditures 818, , ,342 Excess (Deficiency) of Revenues Over (Under) Expenditures (769,813) (7,970) 761,843 Net Change in Fund Balance (769,813) (7,970) 761,843 Fund Balance - Beginning 769, ,813 - Fund Balance - Ending $ - $ 761,843 $ 761,

160 BUDGETARY COMPARISON SCHEDULE CLERK PROGRAMS For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental Revenues $ 625,000 $ 704,001 $ 79,001 Charges for Services 833, ,407 (232,393) Judgments and Fines 45, , ,561 Investment Income Miscellaneous Revenues 100 1,107 1,007 Total Revenues 1,503,900 1,579,076 75,176 EXPENDITURES Current: Court-Related 1,503, , ,074 Total Expenditures 1,503, , ,074 Excess (Deficiency) of Revenues Over (Under) Expenditures - 593, ,250 OTHER FINANCING SOURCES (USES) Transfers In Total Other Financing Sources and (Uses) Net Change in Fund Balance - 593, ,250 Fund Balance - Beginning - 2,162,599 2,162,599 Fund Balance - Ending $ - $ 2,755,849 $ 2,755,

161 BUDGETARY COMPARISON SCHEDULE SHERIFF PROGRAMS For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental $ 268,966 $ 265,416 $ (3,550) Judgments and Fines 75,743 75,743 - Total Revenues 344, ,159 (3,550) EXPENDITURES Current: Public Safety 368, ,602 3,550 Total Expenditures 368, ,602 3,550 Excess (Deficiency) of Revenues Over (Under) Expenditures (23,443) (23,443) - OTHER FINANCING SOURCES (USES) Transfers (Out) (997,411) (997,411) - Total Other Financing Sources and (Uses) (997,411) (997,411) - Net Change in Fund Balance (1,020,854) (1,020,854) - Fund Balance - Beginning 1,020,854 1,020,854 - Fund Balance - Ending $ - $ - $ - 141

162 BUDGETARY COMPARISON SCHEDULE SUPERVISOR OF ELECTIONS PROGRAMS For the Year Ended September 30, 2014 Variance with Budget - Budget Actual Amounts Over (Under) REVENUES Intergovernmental $ 48,732 $ 48,732 $ - Total Revenues 48,732 48,732 - EXPENDITURES Current: General Government 48,732 48,732 - Total Expenditures 48,732 48,732 - Excess (Deficiency) of Revenues Over (Under) Expenditures Net Change in Fund Balance Fund Balance - Beginning Fund Balance - Ending $ - $ - $ - 142

163 BUDGETARY COMPARISON SCHEDULE DEBT SERVICE FUND For the Year Ended September 30, 2014 Actual Amounts Variance with Budget - Over (Under) Budget REVENUES Intergovernmental $ 350, ,000 60,000 Investment Income 8,475 24,219 15,744 Miscellaneous 1,011, (1,011,756) Total Revenues 1,370, ,257 (936,012) EXPENDITURES Debt Service Principal Retirement 3,925,724 4,397,000 (471,276) Interest and Fiscal Charges 4,093,549 3,237, ,268 Total Expenditures 8,019,273 7,634, ,992 Excess (Deficiency) of Revenues Over (Under) Expenditures (6,649,004) (7,200,024) (551,020) OTHER FINANCING SOURCES (USES) Transfers In 6,649,004 7,356, ,864 Total Other Financing Sources and (Uses) 6,649,004 7,356, ,864 Net Change in Fund Balance - 156, ,844 Fund Balance - Beginning - 1,903,446 1,903,446 Fund Balance - Ending $ - $ 2,060,290 $ 2,060,

164 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS FUNDS September 30, 2014 Federal Transit Administration Fund New Road Construction Fund Total Nonmajor Capital Projects Funds ASSETS Cash and Cash Equivalents $ 140,931 $ 239 $ 141,170 Investments 175, ,768 Due from Other Governments 689, ,319 Total Assets 1,005, ,006,257 LIABILITIES Accounts Payable 689, ,322 Total Liabilities 689, ,322 FUND BALANCES Restricted for: Mass Transit Capital 316, ,398 Road Construction Total Fund Balances 316, ,935 Total Liabilities, deferred inflow of resources, and fund balances $ 1,005,720 $ 537 $ 1,006,

165 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS FUNDS For the Year Ended September 30, 2014 Federal Transit Administration Fund New Road Construction Fund Total Nonmajor Capital Projects Funds REVENUES Intergovernmental Revenues $ 1,925,785 $ - $ 1,925,785 Investment Income 1, ,551 Miscellaneous Revenues 46,131-46,131 Total Revenues 1,973, ,973,467 EXPENDITURES Current: Transportation 144, ,504 Capital Outlay 1,827,413 29,262 1,856,675 Total Expenditures 1,971,917 29,262 2,001,179 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,439 (29,151) (27,712) Net Change in Fund Balances 1,439 (29,151) (27,712) Fund Balances - Beginning 314,959 29, ,647 Fund Balances - Ending $ 316,398 $ 537 $ 316,

166 BUDGETARY COMPARISON SCHEDULE FEDERAL TRANSIT ADMINISTRATION FUND For the Year Ended September 30, 2014 Variance with Budget Actual Amounts Budget - Over (Under) REVENUES Intergovernmental Revenues $ 6,621,030 $ 1,925,785 $ (4,695,245) Investment Income - 1,440 1,440 Miscellaneous Revenues - 46,131 46,131 Total Revenues 6,621,030 1,973,356 (4,647,674) EXPENDITURES Current: Transportation 571, , ,110 Capital Outlay 6,049,416 1,827,413 4,222,003 Total Expenditures 6,621,030 1,971,917 4,649,113 Excess (Deficiency) of Revenues Over (Under) Expenditures - 1,439 1,439 Net Change in Fund Balance - 1,439 1,439 Fund Balance - Beginning - 314, ,959 Fund Balance - Ending $ - $ 316,398 $ 316,

167 BUDGETARY COMPARISON SCHEDULE NEW ROAD CONSTRUCTION FUND For the Year Ended September 30, 2014 Variance with Budget Actual Amounts Budget - Over (Under) REVENUES Investment Income $ - $ 111 $ 111 Total Revenues EXPENDITURES Capital Outlay 29,688 29, Total Expenditures 29,688 29, Excess (Deficiency) of Revenues Over (Under) Expenditures (29,688) (29,151) 537 Net Change in Fund Balance (29,688) (29,151) 537 Fund Balance - Beginning 29,688 29,688 - Fund Balance - Ending $ - $ 537 $

168 NONMAJOR PROPRIETARY FUNDS ENTERPRISE FUNDS Proprietary funds are used to account for Business-Type activities. The focus is on the determination of operating income, changes in net position (or cost recovery), financial position and cash flows. Inspection Fund Used to account for building inspection services provided to the residents of Escambia County. Bay Center Fund Used to account for the operation, maintenance and improvements of the Pensacola Bay Center. 148

169 COMBINING STATEMENT OF NET POSITION NONMAJOR PROPRIETARY FUNDS September 30, 2014 Business-type Activities - Enterprise Funds Inspection Fund Bay Center Fund Totals ASSETS Current Assets: Cash and Cash Equivalents $ 1,084,449 $ 1,562,058 $ 2,646,507 Restricted Assets Available for Current Liabilities 239, ,866 Investments 1,648, ,090 1,870,123 Accounts Receivable,Net of Allowance for Uncollectable Accounts - 101, ,515 Due from Other Governments 1,100-1,100 Inventories - 62,557 62,557 Prepaid Items - 19,929 19,929 Total Current Assets 2,973,448 1,968,149 4,941,597 Noncurrent Assets: Restricted Assets: Escrow Deposits - restricted 239, ,866 Less: Portion Classified as Current (239,866) - (239,866) Total Restricted Assets Capital Assets: Buildings - 25,743,235 25,743,235 Improvements Other than Buildings - 3,034,494 3,034,494 Machinery, Equipment and Vehicles 437,983 2,174,087 2,612,070 Less: Accumulated Depreciation (397,956) (24,003,244) (24,401,200) Total Capital Assets (Net) 40,027 6,948,572 6,988,599 Total Noncurrent Assets 40,027 6,948,572 6,988,599 Total Assets 3,013,475 8,916,721 11,930,196 Continued 149

170 STATEMENT OF NET POSITION - Continued NONMAJOR PROPRIETARY FUNDS September 30, 2014 Business-type Activities - Enterprise Funds Inspection Fund Bay Center Fund Totals LIABILITIES Current Liabilities: Accounts Payable 33, , ,811 Accrued Liabilities 66,173-66,173 Compensated Absences Payable 32,237-32,237 Due to Other Governments ,165 48,288 Deposits 23,679-23,679 Other Current liabilities - 1,167,456 1,167,456 Current Liabilities Payable from Restricted Assets: Escrow Deposits - restricted 239, ,866 Total Current Liabilities 395,559 1,652,951 2,048,510 Noncurrent Liabilities: Compensated Absences Payable 290, ,130 Other Post Employment Benefits 74,524-74,524 Total Noncurrent Liabilities 364, ,654 Total Liabilities 760,213 1,652,951 2,413,164 NET POSITION Net Investment in Capital Assets 40,027 6,948,572 6,988,599 Unrestricted 2,213, ,198 2,528,433 Total Net Position $ 2,253,262 $ 7,263,770 $ 9,517,

171 COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION NONMAJOR PROPRIETARY FUNDS For the Year Ended September 30, 2014 Business-type Activities - Enterprise Funds Inspection Fund Bay Center Fund Total Operating Revenues: Charges for Services $ 2,298,918 $ 4,558,230 $ 6,857,148 Miscellaneous Revenues 8,827 5,495 14,322 Total Operating Revenues 2,307,745 4,563,725 6,871,470 Operating Expenses: Personal Services 1,705,234-1,705,234 Contracted Services - 5,378,328 5,378,328 Supplies and Materials 69,645-69,645 Repairs and Maintenance 88,934 83, ,768 Other Services and Charges 187, , ,630 Depreciation 12, , ,650 Premiums/Claims Expense 6,133 92,939 99,072 Total Operating Expenses 2,069,211 6,560,116 8,629,327 Operating Income 238,534 (1,996,391) (1,757,857) Nonoperating Revenues (Expenses): Investment Income 14,181 2,300 16,481 Gain (Loss) on Disposal of Capital Assets (9,903) - (9,903) Total Nonoperating Revenues (Expenses) 4,278 2,300 6,578 Income Before Transfers and Contributions 242,812 (1,994,091) (1,751,279) Transfer In - 1,300,000 1,300,000 Capital Contributions 7,214 29,680 36,894 Change in Net Position 250,026 (664,411) (414,385) Net Position - Beginning 2,003,236 7,928,181 9,931,417 Net Position - Ending $ 2,253,262 $ 7,263,770 $ 9,517,

172 COMBINING STATEMENT OF CASH FLOWS NONMAJOR PROPRIETARY FUNDS For the Year Ended September 30, 2014 Business-type Activities - Enterprise Funds Inspection Fund Bay Center Fund Total Cash Flows from Operating Activities Receipts from customers and users $ 2,314,963 $ 5,287,830 $ 7,602,793 Payments to suppliers (337,803) (5,880,506) (6,218,309) Payments to employees (1,697,680) - (1,697,680) Net Cash Provided (Used) by Operating Activities 279,480 (592,676) (313,196) Cash Flows from Noncapital Financing Activities Transfers from other funds - 1,300,000 1,300,000 Net Cash Provided (Used) by Noncapital Financing Activities - 1,300,000 1,300,000 Cash Flows from Capital and Related Financing Activities Acquisition/construction of capital assets (36,401) (106,585) (142,986) Net Cash (Used) by Capital and Related Financing Activities (36,401) (106,585) (142,986) Cash Flows from Investing Activities Sale (purchase) of investments 48, , ,626 Interest received 14,181 2,300 16,481 Net Cash Provided (Used) by Investing Activities 63, , ,107 Net Increase (Decrease) in Cash and Cash Equivalents 306, ,810 1,235,925 Cash and cash equivalents at beginning of year 1,018, ,248 1,650,448 Cash and cash equivalents at end of year $ 1,324,315 $ 1,562,058 $ 2,886,373 Cash and Cash Equivalents Classified As: Current assets $ 1,084,449 $ 1,562,058 $ 2,646,507 Current restricted assets 239, ,866 Total Cash and Cash Equivalents $ 1,324,315 $ 1,562,058 $ 2,886,373 Continued 152

173 COMBINING STATEMENT OF CASH FLOWS - Continued NONMAJOR PROPRIETARY FUNDS For the Year Ended September 30, 2014 Business-type Activities - Enterprise Funds Inspection Fund Bay Center Fund Total Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ 238,534 $ (1,996,391) $ (1,757,857) Depreciation 12, , ,650 Change in Assets and Liabilities: Accounts receivable (609) 50,991 50,382 Inventories - (15,205) (15,205) Prepaids - (15,427) (15,427) Accounts payable 20,156 (137,043) (116,887) Contracts payable - (18,703) (18,703) Accrued liabilities 6,782-6,782 Due to other governments (6,027) 31,383 25,356 Customer deposits 7,827-7,827 Other current liabilities - 673, ,114 Compensated absences 13,423-13,423 Post employment benefits (12,651) - (12,651) Total Adjustments 40,946 1,403,715 1,444,661 Net Cash Provided (Used) by Operating Activities $ 279,480 $ (592,676) $ (313,196) Schedule of non-cash capital activities: Contributions of Capital Assets $ 7,214 $ 29,680 $ 36,

174 BUSINESS -TYPE FUNDS INTERNAL SERVICE FUNDS Internal service funds are used to report any activity that provides goods or services to other funds, departments, or agencies of the primary government and its component unit, or to other governments, on a cost-reimbursement basis. Board of County Commissioners - ISF Used to account for risk management services, garage and fuel services provided to County departments, and for the administration of employee benefits. Clerk of Circuit Court and Comptroller- ISF Used to account for annual costs related to compensated absence policy and activities for the Court Related employees of the Clerk of the Circuit Court and Comptroller s Office. 154

175 COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS September 30, 2014 Governmental Activities- Internal Service funds Clerk BCC Internal Service Fund Internal Service Fund Totals ASSETS Current Assets: Cash and Cash Equivalents $ 6,187,691 $ 752,747 $ 6,940,438 Investments 7,540,337-7,540,337 Accounts Receivable,Net of Allowance for Uncollectable Accounts 1,106,596-1,106,596 Due from Other Funds 154, ,992 Due from Other Governments 296, ,622 Inventories 370, ,522 Prepaid Items 266, ,812 Total Current Assets 15,923, ,747 16,676,319 Advances Due from Other Funds 3,299,841-3,299,841 Capital Assets: Buildings 399, ,564 Improvements Other than Buildings 937, ,373 Machinery, Equipment and Vehicles 281, ,085 Less: Accumulated Depreciation (741,167) - (741,167) Total Capital Assets (Net) 876, ,855 Total Noncurrent Assets 4,176,696-4,176,696 Total Assets 20,100, ,747 20,853,015 Continued 155

176 COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS September 30, 2014 Governmental Activities- Internal Service funds Clerk BCC Internal Service Fund Internal Service Fund Totals LIABILITIES Current Liabilities: Accounts Payable 4,523,461-4,523,461 Accrued Liabilities 31,643-31,643 Compensated Absences Payable 32, , ,399 Estimated Claims Payable 1,728,100-1,728,100 Due to Other Funds 5,478-5,478 Due to Other Governments 1,068,194-1,068,194 Deposits 62,935-62,935 Total Current Liabilities 7,452, ,718 7,626,210 Noncurrent Liabilities: Compensated Absences Payable 294, , ,162 Other Post Employment Benefits 36,420-36,420 Estimated Claims Payable 4,375,981-4,375,981 Total Noncurrent Liabilities 4,706, ,029 5,285,563 Total Liabilities 12,159, ,747 12,911,773 NET POSITION Net Investment in Capital Assets 876, ,855 Unrestricted 7,064,387-7,064,387 $ 7,941,242 $ - $ 7,941,

177 COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For the Year Ended September 30, 2014 Governmental Activities- Internal Service funds BCC Internal Service Fund Clerk Internal Service Fund Operating Revenues: Charges for Services $ 43,545,333 $ 587,963 $ 44,133,296 Total Operating Revenues 43,545, ,963 44,133,296 Operating Expenses: Personal Services 769, ,963 1,357,479 Contracted Services - Storm Damage 6,110,732-6,110,732 Repairs and Maintenance 7,407,769-7,407,769 Other Services and Charges 6,009,507-6,009,507 Depreciation 81,080-81,080 Premiums/Claims Expense 24,356,081-24,356,081 Total Operating Expenses 44,734, ,963 45,322,648 Operating Income (1,189,352) - (1,189,352) Nonoperating Revenues (Expenses): Investment Income 64,076-64,076 Total Nonoperating Revenues (Expenses) 64,076-64,076 Income Before Transfers and Contributions (1,125,276) - (1,125,276) Capital Contributions 1,703-1,703 Change in Net Position (1,123,573) - (1,123,573) Net Position - Beginning 9,064,815-9,064,815 Net Position - Ending $ 7,941,242 $ - $ 7,941,242 Total 157

178 COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended September 30, 2014 Governmental Activities- Internal Service funds BCC Internal Service Fund Clerk Internal Service Fund Total Cash Flows from Operating Activities Receipts from Customers and Users $ 43,789,301 $ 71,366 $ 43,860,667 Payments to Suppliers (40,889,628) - (40,889,628) Payments to Employees (789,192) - (789,192) Net Cash Provided (Used) by Operating Activities 2,110,481 71,366 2,181,847 Cash Flows from Noncapital Financing Activities Advances due to/from Other Funds 1,577,542-1,577,542 Net Cash Provided (Used) by Noncapital Financing Activities 1,577,542-1,577,542 Cash Flows from Capital and Related Financing Activities Acquisition/Construction of Capital Assets (58,265) - (58,265) Net Cash (Used) by Capital and Related Financing Activities (58,265) - (58,265) Cash Flows from Investing Activities Sale (Purchase) of Investments (1,305,097) - (1,305,097) Interest Received 64,076-64,076 Net Cash Provided (Used) by Investing Activities (1,241,021) - (1,241,021) Net Increase (Decrease) in Cash and Cash Equivalents 2,388,737 71,366 2,460,103 Cash and Cash Equivalents at Beginning of Year 3,798, ,381 4,480,335 Cash and Cash Equivalents at End of Year $ 6,187,691 $ 752,747 $ 6,940,438 Cash and Cash Equivalents Classified As: Current Assets $ 6,187,691 $ 752,747 $ 6,940,438 Total Cash and Cash Equivalents $ 6,187,691 $ 752,747 $ 6,940,438 Continued 158

179 COMBINING STATEMENT OF CASH FLOWS - Continued INTERNAL SERVICE FUNDS For the Year Ended September 30, 2014 Governnmental Activities - Internal Service Funds BCC Internal Service Fund Clerk Internal Service Fund Total Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating Income $ (1,189,352) $ - $ (1,189,352) Depreciation 81,080-81,080 Change in Assets and Liabilities: (Increase) Decrease in Accounts Receivable 240, ,138 (Increase) Decrease in Inventories 25,583-25,583 (Increase) Decrease in Prepaids (23,577) - (23,577) Increase (Decrease) in Accounts Payable 2,376,435-2,376,435 Increase (Decrease) in Contracts Payable (9,362) - (9,362) Increase (Decrease) in Accrued Liabilities Increase (Decrease) in Due to Other Governments 1,068,194-1,068,194 Increase (Decrease) in Customer Deposits 3,830-3,830 Increase (Decrease) in Compensated Absences 29,319 71, ,685 Increase (Decrease) in Post Employment Benefits (49,987) - (49,987) Increase (Decrease) in Claims Payable (442,812) - (442,812) Total Adjustments 3,299,833 71,366 3,371,199 Net Cash Provided (Used for) Operating Activities $ 2,110,481 $ 71,366 $ 2,181,847 Schedule of non-cash capital activities: Contributions of Capital Assets $ 1,703 $ - $ 1,

180 FIDUCIARY FUNDS AGENCY FUNDS Agency funds are used to account for assets held by the County as an agent for individuals, private organizations, and other governments. Clerk of the Circuit Court and Comptroller Used to account for resources received and held by the Clerk in a fiduciary capacity. These resources represent fines, forfeitures and filing fees collected for other governmental agencies and support payments, jury and witness services and posted bonds collected for individuals. Sheriff Used to account for the assets held by the Sheriff for individuals such as prisoner s funds, confiscated monies held as evidence, and prepayments of the Sheriff s fees for serving papers. Tax Collector Used to account for property taxes and fees for licenses. 160

181 COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS September 30, 2014 Clerk General Agency Sheriff General Agency Tax Collector General Totals ASSETS Cash and Cash Equivalents $ 3,696,292 $ 732,216 $ 8,349,949 $ 12,778,457 Accounts Receivable 23, , ,577 Total Assets $ 3,719,345 $ 732,216 $ 8,608,473 $ 13,060,034 LIABILITIES Due to Other Governments $ 48,859 $ - $ 8,165,823 $ 8,214,682 Due to Individuals 1,035, , ,650 2,210,051 Other Current Liabilities 2,635, ,635,301 Total Liabilities $ 3,719,345 $ 732,216 $ 8,608,473 $ 13,060,

182 CLERK GENERAL AGENCY FUNDS ESCAMBIA COUNTY, FLORIDA STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended September 30, 2014 Balance 10/01/13 Additions Deductions Balance 09/30/14 ASSETS Cash and Cash Equivalents $ 4,271,536 $ 23,173,271 $ 23,748,515 $ 3,696,292 Accounts Receivable 19,061 71,649 67,657 23,053 Total Assets $ 4,290,597 $ 23,244,920 $ 23,816,172 $ 3,719,345 LIABILITIES Accounts Payable $ - $ 121,133 $ 121,133 $ - Due to Other Governments 39, , ,167 48,859 Due to Individuals 669,918 8,401,785 8,036,423 1,035,280 Other Current Liabilities 3,581,559 14,702,564 15,648,917 2,635,206 Total Liabilities $ 4,290,597 $ 23,383,388 $ 23,954,640 $ 3,719,345 SHERIFF GENERAL AGENCY FUNDS Balance 10/01/13 Additions Deductions Balance 09/30/14 ASSETS Cash and Cash Equivalents $ 1,153,462 $ 2,269,004 $ 2,690,250 $ 732,216 Accounts Receivable 6,548 23,443 29,991 - Total Assets $ 1,160,010 $ 2,292,447 $ 2,720,241 $ 732,216 LIABILITIES Due to Other Governments $ 96,494 $ 303,115 $ 399,609 $ - Due to Individuals 997,732 3,568,113 3,833, ,121 Other Current Liabilities 65, , , Total Liabilities $ 1,160,010 $ 4,453,095 $ 4,880,889 $ 732,216 TAX COLLECTOR GENERAL AGENCY FUNDS Balance 10/01/13 Additions Deductions Balance 09/30/14 ASSETS Cash and Cash Equivalents $ 3,876,546 $ 1,078,393,701 $ 1,073,920,298 $ 8,349,949 Accounts Receivable 300,414 30,151,675 30,193, ,524 Total Assets $ 4,176,960 $ 1,108,545,376 $ 1,104,113,863 $ 8,608,473 LIABILITIES Due to Other Governments $ 3,624,310 $ 390,893,249 $ 386,351,736 $ 8,165,823 Due to Individuals 552,650 26,704,124 26,814, ,650 Total Liabilities $ 4,176,960 $ 417,597,373 $ 413,165,860 $ 8,608,473 Continued 162

183 AGENCY COMBINED TOTALS ESCAMBIA COUNTY, FLORIDA STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES - Continued AGENCY FUNDS For the Year Ended September 30, 2014 Balance 10/01/13 Additions Deductions Balance 09/30/14 ASSETS Cash and Cash Equivalents $ 9,301,544 $ 1,103,835,976 $ 1,100,359,063 $ 12,778,457 Accounts Receivable 326,023 30,246,767 30,291, ,577 Total Assets $ 9,627,567 $ 1,134,082,743 $ 1,130,650,276 $ 13,060,034 LIABILITIES Accounts Payable $ - $ 121,133 $ 121,133 $ - Due to Other Governments 3,759, ,354, ,899,512 8,214,682 Due to Individuals 2,220,300 38,674,022 38,684,271 2,210,051 Other Current Liabilities 3,647,343 15,284,431 16,296,473 2,635,301 Total Liabilities $ 9,627,567 $ 445,433,856 $ 442,001,389 $ 13,060,

184

185 Schedule 1 Escambia County, Florida NET POSITION BY COMPONENT Last Ten Fiscal Years (accrual basis of accounting) (Amounts Expressed in Thousands) Fiscal Year Governmental activities Net investment in capital assets $ 442,851 $ 452,717 $ 458,089 $ 458,331 $ 445,075 Restricted 120, ,728 86,651 85,670 91,990 Unrestricted 19,924 15,359 30,839 10,083 10,312 Total governmental activities net assets $ 583,382 $ 570,804 $ 575,579 $ 554,084 $ 547,377 Business-type activities Net investment in capital assets 50,952 52,502 49,930 49,870 48,811 Unrestricted 22,395 15,992 14,852 14,200 10,707 Total business-type activities net assets $ 73,347 $ 68,494 $ 64,782 $ 64,070 $ 59,518 Primary government Net investment in capital assets 493, , , , ,887 Restricted 120, ,728 86,651 85,670 91,990 Unrestricted 42,319 31,351 45,691 24,283 21,019 Total primary government net position $ 656,729 $ 639,298 $ 640,361 $ 618,154 $ 606,896 Continued next page 164

186 $ 421,039 $ 411,670 $ 406,635 $ 356,455 $ 304,720 9, ,090 97, ,805 88,968 80,027 85,589 (2,879) $ 531,266 $ 501,404 $ 487,409 $ 449,134 $ 399,487 47,589 43,157 41,604 43,338 43, ,422 4,318 11,872 10,134 $ 48,469 $ 45,579 $ 45,922 $ 55,210 $ 53, , , , , ,916 9, ,090 97, ,685 91,390 84,345 97,461 7,255 $ 579,735 $ 546,983 $ 533,331 $ 504,344 $ 452,

187 Schedule 2 Escambia County, Florida CHANGES IN NET POSITION Last Ten Fiscal Years (accrual basis of accounting) (Amounts Expressed in Thousands) Fiscal Year Expenses Governmental activities: General government $ 63,252 $ 74,163 $ 67,918 $ 66,068 $ 58,525 Public Safety 127, , , , ,345 Physical environment 1,618 2,057 4,694 6,892 4,418 Transportation 48,542 52,130 49,084 47,726 44,860 Economic environment 12,139 11,274 13,225 13,361 19,468 Human services 2,462 2,493 2,781 2,790 3,318 Culture and recreation 8,930 4,464 7,024 6,073 5,647 Court related 11,215 10,152 7,922 8,405 8,446 Interest 3,392 3,058 4,388 5,165 5,397 Total governmental activities expenses 278, , , , ,424 Business-type activities: Solid waste $ 9,919 $ 9,988 $ 10,254 $ 11,941 $ 11,822 Emergency medical services 10,796 9,912 9,723 9,387 9,563 Inspection fund 2,079 1,876 2,285 2,580 2,874 Bay Center 6,560 6,583 5,876 5,743 6,509 Industrial park N/A N/A N/A N/A N/A Total business-type activities expenses 29,354 28,359 28,138 29,651 30,769 Total primary government expenses $ 308,117 $ 295,748 $ 306,092 $ 303,788 $ 301,193 Program Revenues Governmental activities: Charges for services General government 4,273 4,285 25,380 25,142 25,084 Public safety 17,947 17,725 18,629 17,679 17,469 Physical environment 14,935 13,582 2,625 2,364 2,566 Transportation 6,509 6,249 1,254 1,444 1,241 Economic environment Culture/recreation Court related 10,021 6,674 2,791 3,070 3,007 Operating grants and contributions 18,946 19,239 45,950 32,687 31,039 Capital grants and contributions 10,655 4,813 10,683 11,704 27,450 Total governmental activities program revenue 84,160 73, ,716 94, ,172 Business-type activities: Charges for services Solid waste 13,618 11,998 11,674 12,489 11,681 Emergency medical services 12,158 11,454 9,386 11,548 13,924 Inspection fund 2,299 2,091 1,970 1,904 1,829 Bay Center 4,558 3,905 3,735 3,490 3,974 Operating grants and contributions Capital grants and contributions 131 1, ,624 Total business-type activities program revenue 32,867 31,006 27,093 30,163 33,138 Total primary government program revenues $ 117,027 $ 104,274 $ 134,809 $ 124,595 $ 141,310 Net (Expense)/Revenue Governmental activities $ (194,603) $ (194,121) $ (170,237) $ (179,705) $ (162,252) Business-type activities 3,513 2,647 (1,046) 512 2,369 Total primary government net expense $ (191,090) $ (191,474) $ (171,283) $ (179,193) $ (159,883) Continued next page 166

188 $ 68,563 $ 74,196 $ 21,405 $ 12,561 $ 30, , , , , ,042 4,348 7,351 13,576 4,159 2,307 43,887 45,859 80,398 66,373 46,601 11,326 16,955 22,639 22,081 9,115 3,386 4,654 5,299 4,966 4,663 5,851 5,312 11,311 8,610 5,497 8,607 8,911 10,086 14,029 9,141 6,471 5,909 7,245 8,066 7, , , , , ,476 $ 7,861 $ 10,330 $ 9,164 $ 8,336 $ 13,932 14,195 15,036 14,760 13,868 13,011 3,141 3,448 3,871 3,487 3,354 5,523 6,197 6,415 5,876 5,713 N/A N/A N/A ,720 35,011 34,210 32,112 36,619 $ 301,958 $ 330,286 $ 348,793 $ 318,490 $ 471,095 26,578 24,133 25,538 26,501 24,222 14,589 16,180 17,023 18,207 17,179 2,452 3,156 3,132 1, ,023 1,306 1,534 1,551 2, ,930 9,717 10,369 10,687 10,539 15,183 10,769 20,137 46, ,135 33,056 22,750 42,096 23,983 6, ,096 88, , , ,032 9,830 12,008 8,963 11,159 13,583 14,074 13,828 13,395 12,268 12,393 1,997 2,542 3,507 4,479 7,216 3,473 3,629 4,307 3,846 4, , ,352 33,736 30,825 31,818 37,717 $ 133,448 $ 122,274 $ 151,107 $ 160,987 $ 311,749 $ (168,142) $ (206,737) $ (194,301) $ (157,209) $ (160,444) (369) (1,275) (3,385) (294) 1,098 $ (168,511) $ (208,012) $ (197,686) $ (157,503) $ (159,346) Continued next page 167

189 Schedule 2 Escambia County, Florida CHANGES IN NET POSITION (Continued) Last Ten Fiscal Years (accrual basis of accounting) (Amounts Expressed in Thousands) Fiscal Year General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes $ 101,076 $ 93,789 $ 99,683 $ 105,428 $ 103,386 Sales tax 59,450 56,515 54,113 53,164 49,382 Gasoline taxes 16,107 12,621 13,069 13,315 13,388 Tourist development tax 8,396 7,801 7,156 6,462 5,051 Other taxes and payments in lieu of taxes 6,028 7, Intergovernmental-unrestricted 7,408 7,024 8,333 8,189 8,227 Investment income 1, ,617 1,509 1,163 Rents and Royalties Gain (loss) on sale of capital assets - - 5, Miscellaneous 8,131 4,249 1,619 1,698 2,180 Gain (loss) on sale of capital assets Transfers - internal activities (763) (907) (1,104) (3,456) (8,044) Total general revenues and transfers 207, , , , ,866 Business-type activities: Investment income Gain (loss) on sale of capital assets Miscellaneous Capital contributions Transfers - internal activities ,104 3,456 8,044 Total business-type activities 1,340 1,064 1,757 4,039 8,680 Total primary government $ 208,521 $ 190,411 $ 193,489 $ 190,452 $ 183,546 Change in Net Position Governmental activities $ 12,578 $ (4,774) $ 21,495 $ 6,708 $ 12,614 Business-type activities 4,853 3, ,551 11,049 Total change in net position $ 17,431 $ (1,063) $ 22,206 $ 11,259 $ 23,663 Continued next page 168

190 $ 107,317 $ 130,009 $ 125,233 $ 98,875 $ 98,902 49,756 54,403 57,121 60,802 60,769 13,441 13,750 14,631 13,837 14,327 5,333 5,533 5,260 4,870 4, ,151 9,058 8,729 8,888 13,774 3,364 6,042 11,665 11,159 6, ,472 1,861 2,716 4,075 6, ,875 2,366 (2,830) (214) 259 (88) (216) 198, , , , , ,202 1, (299) , (259) , ,174 1,541 $ 201,264 $ 221,664 $ 226,672 $ 209,030 $ 208,829 $ 29,863 $ 13,995 $ 31,679 $ 49,647 $ 46,844 2,890 (343) (2,693) 1,880 2,639 $ 32,753 $ 13,652 $ 28,986 $ 51,527 $ 49,

191 Schedule 3 Escambia County, Florida FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (Amounts Expressed in Thousands) Fiscal Year General Fund: Nonspendable $ 4,367 $ 4,805 $ 5,021 $ 579 Restricted Committed Assigned 10,073 8,402 4, Unassigned 23,647 19,361 16,868 27,954 Total general fund 38,087 32,620 26,798 29,437 All Other Governmental Funds: Nonspendable 5,609 2,567 7,776 18,896 Restricted 123,349 99,764 86,651 85,670 Committed 14,267 13,545 9,100 8,418 Assigned - - 8,777 7,655 Unassigned (3,836) (3,980) (6,088) (18,135) Total all other governmental funds 139, , , ,504 Total all governmental funds $ 177,476 $ 144,516 $ 133,014 $ 131,941 Note: Prior to 2010, amounts have not been restated for the implementation of GASB Statement No. 54. Continued next page 170

192 Fiscal Year General Fund: Reserved $ 1,458 $ 1,529 $ 1,941 $ 815 $ 1,561 $ 928 Unreserved 31,274 31,636 46,959 32,965 36,564 40,697 Total general fund 32,732 33,165 48,900 33,780 38,125 41,625 All Other Governmental Funds: Reserved 52,433 56,106 43,306 40,543 61,043 96,718 Unreserved, reported in: Special revenue funds 17,321 14,431 8,769 30,189 8,712 (8,173) Debt service fund Capital projects funds 39,352 38,056 33,670 23,909 33,513 17,513 Total all other governmental funds 109, ,593 85,745 94, , ,058 Total all governmental funds $ 141,838 $ 141,758 $ 134,645 $ 128,421 $ 141,393 $ 147,

193 Schedule 4 Escambia County, Florida CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (Amounts Expressed in Thousands) Fiscal Year REVENUES Taxes $ 161,956 $ 149,265 $ 153,137 $ 157,787 $ 152,344 Permits, fees and special assessments 13,916 13,546 12,893 12,074 12,180 Franchise fees 14,608 13,308 13,372 13,811 14,109 Intergovernmental revenue 62,337 57,770 81,844 68,947 85,534 Charges for services 21,677 18,111 17,627 17,218 16,885 Fines and forfeits 2,407 2,262 1,145 1, Investment income 1, ,415 1,395 1,042 Miscellaneous 11,935 8,992 5,180 10,453 6,987 Total revenues 290, , , , ,071 EXPENDITURES General government 56,079 58,979 59,147 61,209 51,716 Public safety 119, , , , ,184 Physical environment 1,731 2,279 5,251 6,432 5,490 Transportation 27,584 26,812 26,183 26,172 23,898 Economic environment 12,796 10,419 12,517 13,428 18,973 Human services 2,337 2,079 2,254 2,323 2,786 Culture and recreation 6,867 2,271 1,556 2,186 1,409 Court-related 10,071 9,132 9,308 9,576 9,603 Debt service: Principal 4,397 3,526 3,670 3,998 13,052 Interest 3,241 3,148 4,388 5,165 5,397 Capital outlay 32,156 32,279 50,446 42,539 46,438 Total expenditures 276, , , , ,946 Excess of revenues over (under) expenditures 13,223 9,284 1,622 (2,296) 3,125 OTHER FINANCING SOURCES (USES) Refunding bonds issued - 8,406 48, Refunding notes issued , Notes issued 20, Payments made to bond escrow agents - (8,362) (96,700) - - Insurance recoveries Transfers in 18,331 18,256 36,443 26,941 35,798 Transfers out (19,094) (16,083) (38,057) (34,843) (38,842) Total other financing sources (uses) 19,737 2,217 (645) (7,601) (2,736) Net change in fund balances $ 32,960 $ 11,501 $ 976 $ (9,897) $ 389 Debt service as a percentage of noncapital expenditures 3.21% 3.08% 3.54% 4.06% 8.10% Continued next page 172

194 $ 158,587 $ 181,972 $ 179,404 $ 152,980 $ 152,986 11,365 12,039 12,714 12,860 12,778 13,809 13,246 13,114 10,792 9,949 59,002 64,356 84,636 95, ,299 18,612 20,192 22,514 22,514 24,260 3,757 4,381 4,294 5, ,126 5,355 10,722 10,477 5,631 16,401 4,742 9,859 12,047 7, , , , , ,723 59,419 66,939 77,273 59,054 51, , , , , ,440 4,831 8,228 12,637 4,030 2,276 24,615 28,870 38,916 31,542 25,027 11,731 16,701 21,627 21,395 8,991 2,872 4,166 4,759 4,530 4,334 1,645 2,126 2,985 3,670 3,113 9,533 10,507 8,819 8,941 8,490 6,168 4,866 14,718 18,815 13,529 6,471 5,909 7,361 8,195 7,943 37,920 26,807 53,786 47,387 28, , , , , ,472 6,453 5,993 (19,423) (17,787) 13, , , ,778 11,617 3,975 40,548 35,065 40,141 43,882 53,782 (43,378) (35,280) (40,332) (43,970) (53,998) ,587 11,529 3,759 $ 7,162 $ 6,222 $ (11,836) $ (6,258) $ 17, % 3.94% 7.29% 9.23% 5.15% 173

195 Schedule 5 Escambia County, Florida ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Net Assessed Value of Real Property (1) Commercial Total Fiscal Residential and Industrial Other Personal Direct Year Property Property Property Property (2) Total Tax Rate 2005 $ 6,810,435 $ 2,041,598 $ 895,172 $ 1,814,841 $ 11,562, ,443,443 2,087, ,937 1,802,253 11,634, ,837,506 2,770, ,741 1,938,757 14,899, ,751,338 2,840, ,121 2,014,988 15,951, ,654,407 2,917, ,944 1,939,783 14,857, ,186,381 2,766, ,699 1,939,980 14,239, ,839,770 2,656, ,662 1,790,615 13,609, ,950,022 2,721, ,921 1,708,852 13,748, ,838,568 2,620, ,736 1,802,882 13,639, ,343,620 2,712, ,351 1,789,770 14,246, Source: Escambia County Property Appraiser Last Ten Fiscal Years (Amounts Expressed in Thousands) (1) Taxable value of property subject to direct tax rate. (2) Personal property includes centrally assessed property, furniture, fixtures, tools, machinery, equipment, etc. and is taxed at various rates 174

196 Schedule 6 Escambia County, Florida DIRECT AND OVERLAPPING PROPERTY TAX RATES Fiscal Year Direct: Escambia County Library Escambia County Law Enforcement Service Taxing Unit Total direct rate Overlapping: Escambia County School Board City of Pensacola City of Pensacola Downtown Improvement Board Northwest Florida Water Management Town of Century Total overlapping rates Source: Escambia County Property Appraiser Continued next page Last Ten Years (rates per $1,000 of assessed value) Millage rates levied for the fiscal year ending September

197

198 Schedule 7 Escambia County, Florida PRINICIPAL PROPERTY TAX PAYERS Current and Nine Years Ago (Amounts Expressed in Thousands) Fiscal Year 2014 Fiscal Year 2005 Percentage Percentage of of Total County Total County Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Gulf Power Company $ 580, % $ 411, % International Paper Corp 330, % 240, % Ascend Performance Materials* 125, % 136, % West FL Regional Medical Center 93, % 70, % Simon DeBartolo/Simon Property 57, % 42, % Wal Mart Stores 58, % 41, % BellSouth Telecommunication 57, % 101, % Navy Federal Credit Union 80, % 0.00% City of Pensacola 71, % 0.00% Cox Communication/Cox Cable 36, % 52, % WCI Communications 39, % Cordova Community 26, % Total $ 1,492, % $ 1,161, % (1) $ 14,246,068 (1) $ 11,562,046 Sources: Escambia County Tax Roll compiled by the Escambia County Property Appraiser Tangible personal property records on file in the Escambia County Tax Collector's office. (1) Total Estimated Assessed Value Countywide per Schedule 5 *Formerly Solutia, Inc. 177

199 Schedule 8 Escambia County, Florida PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years Collected within the Fiscal Year of the Levy Total Collections to Date Fiscal Year Taxes Levied Percentage Collections in Percentage Ended for the of Original Subsequent of Sept. 30 Fiscal Year Amount Levy Years Amount Levy 2005 $ 101,175,289 $ 97,192, % $ 1,709,201 $ 98,901, % ,080,907 98,772, % 101,782 98,874, % ,425, ,999, % 233, ,233, % ,791, ,091, % 1,035, ,126, % ,259, ,074, % 214, ,289, % ,040, ,137, % 3,248, ,385, % ,512,715 93,343, % 12,084,191 (1) 105,427, % ,330,134 99,249, % 432,641 99,682, % ,092,915 94,930, % 188,794 95,118, % ,295,430 95,103, % 695,427 95,798, % Note: Property Tax data includes County wide and Municipal Services Taxing Unit only. Data does not include the School Board. (1) 2011 Collections in Subsequent Years includes $10,606,316 for collections held in reserve pending the outcome of court litigation. 178

200 Schedule 9 Escambia County, Florida RATIOS OF GENERAL BONDED DEBT OUTSTANDING Last Ten Fiscal Years Governmental Activities Business Activities Total Fiscal Capital Outstanding Year Bonds Leases Notes Bonds Notes Debt 2005 $ 128,740,000 $ 6,631,668 $ 29,794,501 $ - $ 394,787 $ 165,560, ,485,000 3,410,861 21,455, ,351, ,390,000 2,737,266 10,505, ,633, ,210,000 1,799,730 10,030, ,040, ,930,000 1,164,512 9,005, ,099, ,540, , ,047, ,050, ,050, ,680,000-48,040, ,720, ,545,000-53,660, ,205, ,780,000-70,528, ,308,000 Note: Details regarding the county's outstanding debt can be found in the notes to the financial statements (1) See Schedule 12 for more Demographic and Economic Statistics. (2) This is the amount restricted for debt service principal payments (3) Population and Personal income data can be found in the Schedule of Demographic and Economic Statistics on Schedule 12 Continued next page 179

201 Less: Amounts Percentage Percentage Available in of Debt of Debt Service Personal Per Per Fund (2) Total Income (1) Population (1) Capita (1) Capita (3) $ 8,763,231 $ 156,797, % 298, % 7,089, ,261, % 300, % 747, ,885, % 297, % 765, ,274, % 296, % 9,422, ,677, % 297, % 5,392, ,654, % 297, % 3,743, ,306, % 299, % 2,654, ,065, % 303, % 1,903,446 99,301, % 305, % 2,060, ,247, % 305, % 180

202 Schedule 10 Escambia County, Florida Direct and Overlapping Governmental Activities Debt and Computation of Legal Debt Margin As of September 30, 2014 Computation of Direct and Overlapping Debt (1) Percentage Bonded Debt Applicable to This Governmental Unit Outstanding Governmental Unit Direct: Escambia County $ 46,780, % Overlapping: County Governments are encouraged, but not required to present information about Direct or Overlapping Debt. Overlapping debt is not presented. Computation of Legal Debt Margin (2) The Constitution of the State of Florida, Florida Statute and Escambia County set no legal debt limit. Note: Escambia County has no general obligation debt as of September 30, (1) Source: Escambia County Government (2) Source: Florida Statutes 181

203 Schedule 11 Escambia County, Florida PLEDGED REVENUE COVERAGE Last Ten Fiscal Years Sales Tax Bond/Note Capital Improvement Bond/Note's Half-Cent Covenant Fiscal Sales Tax Debt Service Requirements to Debt Service Requirements Year Revenues Principal Interest Coverage Budget (1) Principal Interest Coverage ,097,935 1,680,000 4,065, ,681, ,000 1,020, ,889,330 1,715,000 4,031, ,860, ,000 1,008, ,143,626 1,755,000 3,993, ,337, , , ,076,803 1,800,000 3,947, ,091, , , ,213,848 1,865,000 3,880, ,952, , , ,089,862 1,925,000 3,824, ,136, , , ,531,628 1,985,000 3,761, ,770, , , ,793,471 2,050,000 3,695, ,423, , , ,617,921 2,120,000 3,625, ,447, , , ,735,479 1,775,000 2,227, ,337,204 1,445, , (1) Covenant to budget and appropriate from available Non-ad valorem revenues. (2) Operating Expenses are defined pursuant to the ordinance 89-7, as amended, providing authority to pledge Tourism tax revenues. Continued next page 182

204 Tourist Development Tax Bond/Note Tourist Development Less Net Available Tax Operating for Debt Service Requirements Revenues Expense (2) Debt Service Principal Interest Coverage 4,135,345 (575,936) 3,559, , , ,481,411 (590,086) 3,891, , , ,260,038 (1,578,011) 3,682, , , ,532,834 (1,929,311) 3,603, , , ,332,852 (3,371,913) 1,960, , , ,051,422 (1,700,000) 3,351, , , ,461,694 (1,974,810) 4,486, , , ,156,095 (1,400,000) 5,756,095 1,025, , ,801,334 (1,200,000) 6,601,334 1,650, , ,395,717 (1,300,000) 7,095,717 1,177, ,

205 Schedule 12 Escambia County, Florida DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Fiscal Years Personal Per Capita Income Median Personal (thousands School Unemployment Year Population (1) Age (2) Income (1) of dollars) (3) Enrollment (4) Rate (1) , $ 30,720 $ 9,164,974 43, % , ,052 9,928,656 42, % , ,676 10,312,400 42, % , ,239 10,460,838 41, % , ,713 10,310,282 40, % , ,412 10,539,284 40, % , ,868 11,040,454 39, % , ,682 11,440,820 39, % , ,389 11,740,009 40, % , ,389 11,740,009 43, % Sources: (1) Florida Research and Economic Information Database (FRIEDA) Population was not available at the time of issue, and is based on 2013 data 2014 Per Capita Personal Income was not available at the time of issue, and is based on 2013 data Unemployment Rate is monthly adjusted as of September (2) University of West Florida HAAS Center (3) Personal income is a calculated amount based on population and per capita personal income Personal Income was not available at the time of issue, and is based on 2013 data (4) Escambia County School District - School Board Budget Department 184

206 Schedule 13 Escambia County, Florida PRINCIPAL EMPLOYERS Current and Nine Years Ago 2014 (1) 2005 (1) Percentage Percentage Employer Number of of Total County Number of of Total County Employees Rank Employment Employees Rank Employment Local government 16, % 15, % Federal government 6, % 7, % State of Florida 6, % 5, % Baptist Health Care 4, % 3, % Navy Federal Credit Union 3, % Sacred Heart Health System 3, % 3, % Gulf Power Company 1, % 1, % West Florida Healthcare* 1, % 1, % Ascend Performance Materials** % 1, % West Corporation University of West Florida 1, % 2, % Lakeview Center 0.00% 1, % Total Employees 46,827 44,300 Source: (1) Pensacola Bay Area Chamber of Commerce. The figures include both Escambia and Santa Rosa Counties (Pensacola MSA). *Formerly West Florida Hospital **Formerly Solutia, Inc. 185

207 Schedule 14 Escambia County, Florida ESCAMBIA COUNTY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Last Ten Fiscal Years Number of Full Time Equivalent Employees as of September 30 Function/Program General government Board of County Commissioners Clerk of Circuit Court & Comptroller Property Appraiser Supervisor of Elections Tax Collector Public safety Board of County Commissioners Sheriff 645 1,079 1,102 1,094 1,103 Physical environment Board of County Commissioners Transportation Board of County Commissioners Economic environment Board of County Commissioners Human services Board of County Commissioners Culture and recreation Board of County Commissioners Court related Board of County Commissioners Clerk of Circuit Court & Comptroller Total 2,369 2,381 2,380 2,374 2,423 Source: Escambia County Government Continued next page 186

208 ,122 1,039 1,102 1,083 1, ,315 2,441 2,591 2,513 2,

209 Schedule 15 Escambia County, Florida OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program General Government County residents per employee (1) Public Safety Building permits -total value $ 130,236,352 $ 113,949,035 $ 91,212,174 $ 62,593,839 Building permits - single family units Building permits - multi-family units Total fire responses 14,769 15,946 15,392 15,736 Total permits issued 19,416 17,440 15,176 15,741 Total inspections performed 34,490 31,798 27,205 25,288 Code enforcement complaints 6,165 8,292 6,400 6,354 Emergency calls (ambulance) 41,599 37,872 38,668 36,516 Non-emergency calls (ambulance) 950 2, Total ambulance transports 33,715 33,136 31,542 37, calls - City 61,540 57,416 59,583 55,093 Arrests - City 3,225 3,773 3,316 3,405 Traffic violations - City 7,367 8,179 5,894 5, calls - County 46,199 46,246 48,467 45,071 Arrests - County 15,348 16,944 17,850 16,986 Traffic violations - County 10,254 9,114 14,314 7,833 Physical environment Solid waste managed at Perdido Landfill (tons) 280, , , ,935 Waste disposed of in the class I landfill (tons) 267, , , ,934 Tons of yard trash recycled 9,377 5,015 6,315 14,977 Tons of various recycled materials 2,247 6,726 9,316 20,531 Hazardous material disposed of (tons) Transportation Passenger trips - fixed route services 1,516,853 1,561,371 1,359,002 1,145,539 Passenger trips - paratransit/demand services 56,651 43,774 49,639 49,138 Bob Sikes toll receipts $ 3,327,729 $ 3,310,752 $ 3,316,180 $ 3,249,907 Culture and recreation Bay Center operating revenues $ 4,563,725 $ 3,937,617 $ 3,750,220 $ 3,514,818 Parks & recreation park uses Equestrian Center events Lake Stone rentals Naval Air Museum visitors 799, , , ,397 Students enrolled - University of West Florida 12,588 12,823 11,982 11,599 Students enrolled - Pensacola State College 8,518 9,297 9,509 9,335 N/A: Information not available Sources: Various county departments, Pensacola Police Department, University of West Florida, Pensacola State College, and the Pensacola Naval Air Museum. (1) General Government - County residents per employee is derived from total county population on Schedule 12 and total County government employees on Schedule 14 Continued next page 188

210 $ 90,953,291 $ 69,389,475 $ 76,397,591 N/A N/A N/A N/A N/A N/A N/A N/A N/A 15,493 13,602 13,061 15,000 16,505 15,842 15,330 15,222 19,258 28,007 35,079 55,954 25,581 38,612 48,318 69,414 83,903 77,571 7,418 5,659 9,483 11,825 9,087 10,489 35,557 33,836 33,440 33,557 31,444 32,344 1,068 3,144 5,760 6,916 6,726 6,746 36,625 34,030 30,782 31,530 29,361 29,949 52,780 51,104 93,019 8,111 6,852 7,152 3,375 3,852 3,958 4,059 3,950 4,092 5,786 8,458 9,890 10,617 11,036 11,752 45,710 76,257 71,175 70,814 N/A 71,726 18,776 18,847 14,295 14,957 15,630 15,849 11,201 8,711 5,193 7,021 7,568 7, , , , , , , , , , , , ,774 17,628 26,834 30,804 31,851 34,790 25,031 24,343 34,669 58,601 66,056 61,628 48, N/A N/A 1,164,519 1,054,638 1,017,408 1,046,453 1,182,089 1,215,957 46,383 49,591 51,475 58,002 57,354 56,797 $ 2,902,503 $ 2,962,819 $ 2,845,803 $ 3,124,881 $ 3,840,358 $ 1,915,646 $ 4,016,368 $ 3,479,910 $ 3,632,266 $ 4,314,095 $ 3,971,999 $ 4,168, , , , , , ,000 11,184 11,000 10,380 9,905 9,655 9,611 9,276 20,944 20,593 26,508 26,783 26,

211 Schedule 16 Escambia County, Florida CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program General government Facilities - number Facilities - square footage 2,489,964 2,497,854 2,329,716 2,437,151 2,294,305 Public Safety Road prison capacity Work release facility capacity Fire stations Rescue vehicles (fire trucks, etc) Ambulances Mass transit bus/trolley Sheriffs vehicles Sheriff substations Physical environment Landfills in operation (accepting waste) Beaches (miles) Pensacola (1)* Perdido Key (2)* Transportation Centerline miles of county roads Paved mileage 1,474 1, , , , Unpaved mileage Traffic signals Bridges Culture and recreation Athletic parks Campgrounds Community centers Equestrian center Neighborhood parks Undeveloped parks Beach access/boat ramps Libraries (locations) N/A: Information not available Sources: Individual County departments (1) Source: Santa Rosa Island Authority and Community & Enveronment Bureau (2) Source: Community & Enveronment Bureau * The number of miles were obtained according to a GIS based measurement and 2006 aerial photographs. This measurement is just an approximation and is subject to significant error. Barring disaster or land acquisition/creation, the miles of beach within the County should not change significantly from year-to-year. Continued next page 190

212 ,295,847 2,818,147 2,337,104 2,208,439 2,139, N/A N/A N/A N/A , , , , , N/A N/A N/A 191

213

214 ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS, ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED STATES; THE PROVISIONS OF OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCUAR A-133; AND THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA 192

215 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITORS REPORT ONINTERNALCONTROLOVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Internal Control Over Financial Reporting deficiency in internal control material weakness significant deficiency

216 Compliance and Other Matters Government Auditing Standards. Purpose of this Report Government Auditing Standards

217 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT ACCOUNTANTS REPORTONEXAMINATIONOF COMPLIANCE REQUIREMENTS IN ACCORDANCE WITH CHAPTER , RULES OF THE AUDITOR GENERAL

218 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITORS REPORT ON THE SCHEDULE OF RECEIPTS AND EXPENDITURES OF FUNDS RELATED TO THE DEEPWATER HORIZON OIL SPILL

219 Escambia County, Florida SCHEDULE OF RECEIPTS AND EXPENDITURES OF FUNDS RELATED TO THE DEEPWATER HORIZON OIL SPILL For the Fiscal Year Ended September 30, 2014 BP Economic and Property Damages Promotional Fund: 197

220 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com MANAGEMENT LETTER Report on the Financial Statements Auditors Responsibility Government Auditing StandardsAudits of States, Local Governments, and Non-Profit Organizations Other Reports and Schedule Government Auditing Standards, Rules of the Auditor General. Prior Audit Findings 198

221 Financial Condition Annual Financial Report Special District Component Units Other Matters Purpose of this Letter 199

222 2011-1, , and Article V Expenditures MANAGEMENT LETTER ATTACHMENT A STATUS OF PRIOR YEAR FINDING

223 ESCAMBIA COUNTY, FLORIDA MANAGEMENT'S RESPONSE TO MANAGEMENT LETTER September 30, , , , and Article V Expenditures 201

224 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITOR S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 AND CHAPTER , RULES OF THE AUDITOR GENERAL Report on Compliance for Each Major Federal Program and State Project Circular A-133 Compliance Supplement State Projects Compliance Supplement Management s Responsibility Auditor s Responsibility Government Auditing Standards, Audits of States, Local Governments, and Non-Profit Organizations, Rules of the Auditor General Rules of the Auditor General

225 Opinion on Each Major Federal Program and State Project Report on Internal Control over Compliance Circular A-133 State Projects Compliance Supplement deficiency in internal control over compliance material weakness in internal control over compliance significant deficiency in internal control over compliance Report on Schedule of Expenditures of Federal Awards and State Financial Assistance Required by OMB Circular A-133 and Chapter , Rules of the Auditor General

226 Audits of States, Local Governments, and Non-Profit OrganizationsRules of the Auditor General Purpose of this Report Rules of the Auditor General.

227 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE YEAR ENDED SEPTEMBER 30, 2014 CFDA / Federal and State Grantor/Pass-Through CSFA Contract / Grantor/Program Title Number Grant Number Expenditures

228 CFDA / Federal and State Grantor/Pass-Through CSFA Contract / Grantor/Program Title Number Grant Number Expenditures ESCAMBIA COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE -- (Continued) YEAR ENDED SEPTEMBER 30, 2014

229 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE -- (Continued) YEAR ENDED SEPTEMBER 30, 2014 CFDA / Federal and State Grantor/Pass-Through CSFA Contract / Grantor/Program Title Number Grant Number Expenditures 207

230 NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED SEPTEMBER 30, 2014 NOTE A - BASIS OF PRESENTATION Audits of States, Local Governments, and Non-Profit OrganizationsRules of the Auditor General NOTE B - SUBRECIPIENTS NOTE C - MATCH

231 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2014 A. SUMMARY OF AUDITOR RESULTS FINANCIAL STATEMENTS FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE IDENTIFICATION OF MAJOR PROGRAMS Federal Program

232 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2014 A. SUMMARY OF AUDITOR RESULTS (CONTINUED) State Projects B. FINANCIAL STATEMENT FINDINGS C. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL PROGRAMS D. FINDINGS AND QUESTIONED COSTS - MAJOR STATE FINANCIAL ASSISTANCE Rules of the Auditor General

233

234 FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION ESCAMBIA COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT AND COMPTROLLER SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT

235 FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION ESCAMBIA COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT AND COMPTROLLER SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT CONTENTS Independent Auditors Report. 1 Financial Statements Balance Sheet Governmental Funds. 4 Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds.. 5 Internal Service Fund Statement of Net Position...6 Statement of Revenues, Expenses, and Changes in Net Position. 7 Statement of Cash Flows 8 Statement of Fiduciary Assets and Liabilities Agency Funds. 9 Notes to Financial Statements.. 10 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual - General Fund.. 18 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual - Public Records Modernization Fund Notes to Required Supplementary Information.. 20 Other Supplementary Information Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet - General Fund by Category. 21 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance General Fund by Category. 22 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund by Category 23 Combining Statement of Assets and Liabilities All Agency Funds. 25 Combining Statement of Changes in Assets and Liabilities All Agency Funds. 26 Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. 29 Independent Accountants Report on Examination of Compliance Requirements Performed in Accordance with Chapter , Rules of the Auditor General.. 31 Management Letter. 32 Clerk s Response to Management Letter. 34

236 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITORS REPORT Honorable Pam Childers, Clerk of the Circuit Court and Comptroller Escambia County, Florida Report on the Financial Statements We have audited the accompanying financial statements of each major fund and the aggregate remaining fund information of the Office of the Clerk of the Circuit Court and Comptroller of Escambia County, Florida ( Clerk ) as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Clerk s financial statements, as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors 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 Clerk 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 Clerk 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

237 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each major fund and the aggregate remaining fund information of the Clerk, as of September 30, 2014, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above have been prepared for the purpose of complying with the Rules of the Auditor General, State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of each major fund, and aggregate remaining fund information, only for that portion of the major funds, and the aggregate remaining fund information, of Escambia County, Florida that is attributable to the Clerk. They do not purport to, and do not, present fairly the financial position of Escambia County, Florida as of September 30, 2014, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison schedules on pages be presented to supplement the basic financial statements. Such information, although not a part of the 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 financial statements, and other knowledge we obtained during our audit of the 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 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Clerk s financial statements. The accompanying combining and individual nonmajor fund financial statements and schedules, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of these financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements 2

238 The 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 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 taken as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report on our consideration of the Clerk s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements and other matters included under the heading Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Pensacola, Florida February 18,

239 Financial Statements

240 CLERK OF THE CIRCUIT COURT AND COMPTROLLER BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 Major Funds Public Records General Modernization Fund Fund Total Governmental Funds Assets Cash and cash equivalents $ 2,066,136 $ 2,664,198 $ 4,730,334 Accounts receivable, net 2, ,141 Due from other governmental units 6, , ,990 Total assets $ 2,075,551 $ 2,787,914 $ 4,863,465 Liabilities Accounts payable $ 39,536 $ 536 $ 40,072 Contracts payable 45,287-45,287 Accrued liabilities 248,630 18, ,858 Due to other governmental units 1,624,258-1,624,258 Unearned revenue 70,283 13,301 83,584 Other current liabilities 47,557-47,557 Total liabilities 2,075,551 32,065 2,107,616 Fund Balances Restricted for: Records modernization technology - 2,755,849 2,755,849 Total fund balance - 2,755,849 2,755,849 Total liabilities and fund balance $ 2,075,551 $ 2,787,914 $ 4,863,465 See accompanying notes to financial statements. 4

241 CLERK OF THE CIRCUIT COURT AND COMPTROLLER STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2014 General Fund Major Funds Public Records Modernization Fund Total Governmental Funds Revenues: Intergovernmental $ 999,952 $ 704,001 $ 1,703,953 Charges for services 5,446, ,407 6,048,163 Judgments, fines and forfeitures 1,261, ,561 1,534,174 Investment income 102, ,540 Miscellaneous revenue 150,317 1, ,424 Total Revenues 7,961,178 1,579,076 9,540,254 Expenditures: Current: General government: Salaries and benefits 3,134,490-3,134,490 Operating expenditures 518, ,970 Capital outlay 6,029-6,029 Court related: Salaries and benefits 5,569, ,551 6,402,656 Operating expenditures 568, , ,703 Capital outlay - 43,728 43,728 Payments to State 339, ,317 Total Expenditures 10,136, ,826 11,121,893 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,174,889) 593,250 (1,581,639) Other Financing Sources and Uses: Transfers in 2,144,827-2,144,827 Transfers out (22,373) - (22,373) Total Other Financing Sources and Uses 2,122,454-2,122,454 Net Change in Fund Balance (52,435) 593, ,815 Fund Balance, October 1, ,435 2,162,599 2,215,034 Fund Balance, September 30, 2014 $ - $ 2,755,849 $ 2,755,849 See accompanying notes to financial statements. 5

242 CLERK OF THE CIRCUIT COURT AND COMPTROLLER INTERNAL SERVICE FUND STATEMENT OF NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 ASSETS Current assets: Cash and cash equivalents $ 752,747 Total current assets 752,747 LIABILITIES Current liabilities: Compensated absences payable 173,718 Total current liabilities 173,718 Noncurrent Liabilities: Compensated absences payable 579,029 Total noncurrent liabilities 579,029 Total liabilities 752,747 NET POSITION Unrestricted - Total net position $ - See accompanying notes to financial statements. 6

243 CLERK OF THE CIRCUIT COURT AND COMPTROLLER INTERNAL SERVICE FUND STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITON SEPTEMBER 30, 2014 Operating revenues: Charges for services $ 587,963 Total operating revenue 587,963 Operating expenses: Personnel services 587,963 Total operating expense 587,963 Operating income (loss) - Changes in net position - Net position-beginning - Net position-ending $ - See accompanying notes to financial statements. 7

244 CLERK OF THE CIRCUIT COURT AND COMPTROLLER STATEMENT OF CASH FLOWS SEPTEMBER 30, 2014 CASH FLOWS FROM OPERATING ACTIVITIES Receipts for personal services $ 71,366 Net increase (decrease) in cash and cash equivalents 71,366 Cash and cash equivalents, beginning of year 681,381 Cash and cash equivalents, end of year $ 752,747 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) $ - Increase (decrease) in compensated absences payable 71,366 Net cash provided by (used for) operating activities $ 71,366 See accompanying notes to financial statements. 8

245 CLERK OF THE CIRCUIT COURT AND COMPTROLLER STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES - AGENCY FUNDS SEPTEMBER 30, 2014 Assets Cash and cash equivalents $ 3,696,292 Accounts receivable 23,053 Total Assets $ 3,719,345 Liabilities Cash bonds payable $ 232,116 Court registry payable 2,395,796 General trust payable 7,294 Due to other governments 48,859 Due to individuals 1,035,280 Total Liabilities $ 3,719,345 See accompanying notes to financial statements. 9

246 CLERK OF THE CIRCUIT COURT AND COMPTROLLER NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies The following is a summary of the significant principles and policies used in the preparation of these financial statements. A. Reporting entity The Escambia County, Florida, Clerk of the Circuit Court and Comptroller (the Clerk ) is an elected constitutional officer as provided by Article VIII, Section 1 (d) of the Constitution of the State of Florida. For financial reporting purposes, the Clerk is deemed to be a part of the primary government of Escambia County, Florida (the County), and therefore, is included as such in the Escambia County, Florida, Comprehensive Annual Financial Report. B. Basis of presentation fund financial statements These financial statements have been prepared for the purpose of complying with the Rules of the Auditor General, State of Florida, which require presentation of fund level only financial statements and permit omission of entity-wide full accrual financial statements and management s discussion and analysis. Therefore, these financial statements are intended to present only the financial position and changes in financial position of that portion of Escambia County, Florida that relate to transactions of the Clerk and are not intended to present the financial position and changes in financial position of Escambia County, Florida, taken as a whole. The Clerk s financial records and accounts are maintained in accordance with the principles of fund accounting, whereby resources are classified for accounting and reporting purposes into funds to insure compliance with any special restrictions or limitations on the use of such resources. The Clerk s major funds are defined as follows: The General Fund a governmental fund, is used to account for and report all financial resources of the Clerk not accounted for and reported in other funds. The Public Records Modernization Fund - a special revenue fund, accounts for monies collected according to Chapter 28.24, Florida Statutes to be used exclusively for the purchase and maintenance of equipment, personal training, and technical assistance in modernizing the official records system and for funding court-related technology needs of the Clerk as defined in Chapter , Florida Statutes. Section 28.37(2), Florida Statutes specifies 10% of all court-related fines are to be deposited into this fund to be used exclusively for additional court-related operational needs and program enhancements. Also included in the Special Revenue Fund are activities related to TitleIV-D child support cases. Title IV-D funding provides assistance to the plaintiff and enforcement of collections through the Office of Child Support Enforcement. 10

247 CLERK OF THE CIRCUIT COURT AND COMPTROLLER NOTES TO FINANCIAL STATEMENTS (Continued) 1. Summary of Significant Accounting Policies (Continued) B. Basis of presentation fund financial statements (Continued) Additionally, the Clerk reports the following fund types: Agency Funds - are used to account for assets received and held by the Clerk as an agent for individuals, private organizations and other governments. Agency funds are custodial in nature. The Clerk has numerous agency funds for varying purposes. Internal Service Fund, a proprietary fund accounts for the balances and activity related to the court-related personnel compensated absences policies. Prior to fiscal year 2013, all Clerk employees compensated absence balances were recorded in the Internal Service Fund. In July 2013, the Board of County Commissioners voted to rescind any prior authorization allowing the use of Internal Service Funds by Constitutional Officers and all balances held for non-court related personnel were returned to the Board. C. Fund balance and flow assumptions Fund balance at September 30, 2014, consists of the following: Nonspendable fund balance - includes amounts that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact. Nonspendable in governmental fund types typically are for inventories and prepaid items. Restricted fund balance includes amounts that can be spent only for specific purposes which are externally imposed by creditors, grantors, contributors, or laws or regulations or are imposed by law through constitutional provisions or enabling legislation. An example would include grants. Committed fund balance includes amounts that can only be used for the specific purpose determined by a formal action of the Clerk s highest level of decision-making authority. Commitments may be changed or lifted only by the Clerk taking the same formal action that imposed the constraint originally. Assigned fund balance includes amounts intended to be used by the Clerk for specific purposes, but which do not meet any of the criterion to be considered either restricted or committed. 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. 11

248 CLERK OF THE CIRCUIT COURT AND COMPTROLLER NOTES TO FINANCIAL STATEMENTS (Continued) 1. Summary of Significant Accounting Policies (Continued) C. Fund balance and flow assumptions (Continued) Periodically, the Clerk may have a choice to fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the Clerk s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. D. Measurement focus and basis of accounting Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements, and also refers to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when received in cash or when they become both measurable and available to finance expenditures of the current period. The Clerk considers receivables collected within 60 days after year end to be available and recognizes them as revenues of the current year. Expenditures are recorded when the liability is incurred, except for compensated absences for non-court related activities, which are not recorded until paid by the General Fund. Court-related compensated absences are accrued when earned in the internal service fund. The accounting and financial reporting treatment applied to the capital assets and long-term liabilities associated with a fund are determined by its measurement focus. All governmental funds are accounted for on a spending or financial flow" measurement focus. This means that generally, only current assets, deferred outflows, current liabilities, and deferred inflows are included in the balance sheet. Governmental fund operating statements present increases (revenues, inflows, and other financing sources) and decreases (expenditures, outflows, and other financing uses) in fund balance. Accordingly, they present a summary of sources and uses of available spendable resources during a period. Proprietary funds (the internal service fund) are reported using the economic resources measurement focus and the accrual basis of accounting. Proprietary funds distinguish operating revenues and expenses from non-operating items. The principal operating revenues of the internal service fund are charges related to the Clerk s court-related compensated absences activity. 12

249 CLERK OF THE CIRCUIT COURT AND COMPTROLLER NOTES TO FINANCIAL STATEMENTS (Continued) 1. Summary of Significant Accounting Policies (Continued) D. Measurement focus and basis of accounting (Continued) Agency fund financial statements have no measurement focus but report assets and liabilities using the accrual basis of accounting. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Capital asset acquisitions are recorded as expenditures in governmental funds. The preparation of financial statements in conformity with GAAP requires management to make use of estimates that affect the reported amounts in the financial statements and note disclosures. Actual results could differ from estimates. E. Funding Provided by the State of Florida and Board of County Commissioners The Clerk and Comptroller functions are funded by two primary sources, the State of Florida and the Board of County Commissioners. The State provides operating funds for court-side activities of the Clerk through a State of Florida Clerk of Court Trust Fund. The funding mechanism changed with legislation passed in 2013 which established the Trust Fund. Clerks are no longer required to send collected revenues back to the State for re-appropriation of their budget but instead retain their revenues up to the budget amount appropriated from the Trust Fund. Also, any shortage of revenues up to the approved budget is funded by the Trust Fund. Excess revenues above the appropriation are returned to the State. The Board of County Commissioners funds operating activities for the comptroller functions as well as other capital expenditures. The Clerk submits a proposed budget to the Board for approval for each fiscal year. Funding by the Board is recorded as a transfer out in the financial statements of the County, and as a transfer in on the financial statements of the Clerk. Florida Statutes require that the excess of the Board s appropriations (and other revenues) over expenditures be returned to the Board at the end of the fiscal year. F. Deferred outflows/inflows of resources In addition to assets, deferred outflows of resources represent a consumption of fund balance that applies to a future period(s) and will not be recognized as an outflow of resources (expenditure) until then. In addition to liabilities, deferred inflows of resources represent an acquisition of fund balance that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. No such items were applicable to the Clerk as of September 30,

250 2. Deposits and investments ESCAMBIA COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT AND COMPTROLLER NOTES TO FINANCIAL STATEMENTS (Continued) Cash and cash equivalents are highly liquid investments with original maturities of three months or less when purchased. Investments are recorded at fair value. The investment of surplus funds is governed by the provisions of Florida Statute as to the type of investments that can be made. Deposits may be exposed to custodial credit risk, which is the risk of loss in the event of a bank failure. The Clerk manages custodial credit risk by maintaining its deposits in financial institutions designated as Qualified Public Depositories by the State Treasurer. The Clerk'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. All of the Clerk s deposits are fully insured by the Public Deposit Trust Fund. At September 30, 2014, the reported amount of the Clerk s deposits was approximately $9.2 million, and the bank balance was approximately $10.3 million, consisting entirely of cash and deposit accounts. 3. Receivables The Clerk records an allowance for accounts receivable for returned checks that may become uncollectible. At September 30, 2014, the allowance for returned checks in the General Fund was $7,498. No other allowances for uncollectible accounts are maintained since other receivables are considered collectible. 4. Interfund receivables, payables and transfers Interfund receivables and payables consist of amounts due to or from funds during the normal course of business. At September 30, 2014 there were no interfund receivables or payables within the Clerk s funds. Transfers consist of $2,144,827 of transfers in from the Board of County Commissioners and transfers out of excess budget and fees totaling $22, Due from/to other governments At September 30, 2014, Due from other Governments contains $1,527 of receivables from the Board of County Commissioners (comprised mainly of expenditures paid on their behalf), and $123,464 due from the State for Title IV-D services. The Due to other Governments includes $286,023 payable to the Board of County Commissioners of which $22,373 was excess budget and fees. 14

251 6. Capital assets ESCAMBIA COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT AND COMPTROLLER NOTES TO FINANCIAL STATEMENTS (Continued) Capital assets (vehicles, equipment and other property costing at least $1,000 with a useful life of more than one year) are recorded as expenditures at the time of purchase. These assets are capitalized at cost and depreciated in Escambia County s government-wide financial statements. The Clerk maintains custodial responsibility for the capital assets used by the Clerk. 7. Retirement plan Plan Description The Clerk participates in the Florida Retirement System (FRS), a cost sharing multiple-employer defined benefit pension plan, administered by the State of Florida. 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 Option Retirement Program (FRS Investment Plan). The effective date of the FRS Investment Plan was July 1, On July 1, 2011 the FRS became a contributory plan. The FRS provides retirement, disability and death benefits to members. The State of Florida issues a publicly available report that includes financial statements and required supplementary information for FRS. The report may be obtained at or may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida For members hired before July 1, 2011 the FRS Pension Plan provides for the vesting of benefits after six years of creditable service. Members may retire at age 62, or thirty years of service regardless of age, whichever comes first. For members first enrolled after July 1, 2011, vesting occurs after eight years of credible service and age 65, or thirty-three years of service regardless of the age before 65. 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. Funding Policy - The FRS has six classes of membership. Only four of these classes are applicable to the Clerk s eligible employees. The Clerk is required to contribute at an actuarial determined rate. These rates are a percent of covered payroll. 15

252 7. Retirement plan (Continued) ESCAMBIA COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT AND COMPTROLLER NOTES TO FINANCIAL STATEMENTS (Continued) The four applicable classes, with descriptions and contribution rates in effect during the period ended September 30, 2014, 2013 and 2012 are as follows: Regular Class: 7.37% 6.95% 5.18% Members not qualifying for other classes. Senior Management Class: 21.14% 18.31% 6.30% Members of senior management who do not elect the optional annuity retirement program. Elected Officials Class: 43.24% 33.03% 10.23% Certain elected county officials. Deferred Retirement Option Program (DROP): 12.28% 12.84% 5.44% Members are enrolled in DROP from FRS The contribution requirements of the Clerk and members are established and may be amended by FRS. The plan is contributory for employees requiring a 3% employee contribution. This is in addition to the contributions that are the obligation of the employer. The Clerk's contributions to FRS for the years ended September 30, 2014, 2013 and 2012 were $576,670, $420,240, and $373,778 respectively, and were equal to the required contributions for each year. 8. Other post employment benefits (OPEB), other than pensions The Board offers post-retirement health care benefits to all retired employees of the Clerk and their dependents. Participating retirees are required to reimburse the Board for 100% of the premium cost, which is netted against the premium payment, so that no net expense is initially recorded in the Board s financial statements. However, these retirees are receiving an implicit subsidy because the premium is a group rate which includes active, lower cost employees. This implicit subsidy has a cost which is required to be disclosed in these financial statements. However, this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Clerk. Accordingly, these calculations and disclosures can be found in the County-wide comprehensive annual financial report. 9. Risk management The County has a risk management program to insure claims against the BOCC, Constitutional Officers, and Santa Rosa Island Authority for the following types of risks: Workers Compensation The County is covered for workers compensation claims through a policy with the Florida Municipal Insurance Trust. Coverage limits under the policy include statutory limits, as well as $1,000,000 bodily injury for each accident and $1,000,000 bodily injury by disease for each employee with an aggregate $1,000,000 policy limit. 16

253 9. Risk management (Continued) ESCAMBIA COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT AND COMPTROLLER NOTES TO FINANCIAL STATEMENTS (Continued) Casualty and Property Casualty limits are self-insured for $200,000 per claim with a $300,000 aggregate limit. Property limits are $50,000 - $250,000 self insured retentions per occurrence with excess limits of $45 million including wind. The Clerk participated in the County s insurance program during fiscal year 2014 at a cost of $20,915. There also were no significant reductions in insurance coverage from the prior year and there have been no settlements which exceeded the Clerk s insurance coverage in any of the past three fiscal years. 10. Accumulated compensated absences Employees may accumulate, subject to limitations, amounts of earned but unused sick leave, annual leave, and compensatory time, which will be paid upon separation from service. The amount of vested accumulated compensated absences payable (related to governmental fund activities) based upon the Clerk s paid-time-off (PTO) policy is reported as a liability in the statement of net position in the County s government-wide financial statements. That liability includes earned but unused vacation and sick time as well as FICA taxes and retirement contributions related thereto. The change in accumulated compensated absences during the year was as follows: Balance, September 30, 2013 $ 1,168,187 Additions 985,977 Reductions (924,426) Balance, September 30, 2014 $ 1,229,738 The Internal Service Fund (ISF), established in 2004, was designed to record the annual costs related to the Clerk s compensated absences policies. Beginning in fiscal year 2013, only the court-related portion of compensated absence balances are recorded in the ISF. Compensated absences include $752,747 which is a direct liability of the Internal Service Fund. 11. Litigation From time to time, the office of the Clerk may be involved as a defendant in certain litigation and claims arising from the ordinary course of operations. In the opinion of legal counsel, there are no lawsuits or claims outstanding which will have a material adverse effect on the financial position of the Clerk. 17

254 Required Supplementary Information

255 CLERK OF THE CIRCUIT COURT AND COMPTROLLER GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Original Final Actual Variance with Final Budget Revenues: Intergovernmental $ 6,909,739 $ 6,759,739 $ 999,952 $ (5,759,787) Charges for services 1,606,265 1,606,265 5,446,756 3,840,491 Judgments, fines and forfeitures - - 1,261,613 1,261,613 Investment income , ,540 Miscellaneous , ,317 Total Revenues 8,516,004 8,366,004 7,961,178 (404,826) Expenditures: Current: General government: Salaries and benefits 3,284,792 3,341,918 3,134, ,428 Operating expenditures 469, , ,970 (49,796) Capital outlay - - 6,029 (6,029) Court related: Salaries and benefits 5,743,845 5,743,845 5,569, ,740 Operating expenditures 816, , , ,738 Capital outlay 289, Payments to State ,317 (339,317) Total Expenditures 10,603,705 10,510,831 10,136, ,764 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,087,701) (2,144,827) (2,174,889) (30,062) Other Financing Sources and Uses: Transfers in 2,087,701 2,144,827 2,144,827 - Transfers out - - (22,373) (22,373) Total Other Financing Sources (Uses) 2,087,701 2,144,827 2,122,454 (22,373) Net Change in Fund Balance - - (52,435) (52,435) Fund Balance, October 1, ,435 52,435 Fund Balance, September 30, 2014 $ - $ - $ - $ - See notes to required supplementary information. 18

256 CLERK OF THE CIRCUIT COURT AND COMPTROLLER PUBLIC RECORDS MODERNIZATION FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Original Final Actual Variance with Final Budget Revenues: Intergovernmental $ 625,000 $ 625,000 $ 704,001 $ 79,001 Charges for services 833, , ,407 (232,393) Judgments, fines and forfeitures 45,000 45, , ,561 Investment income Miscellaneous revenue ,107 1,007 Total Revenues 1,503,900 1,503,900 1,579,076 75,176 Expenditures: Current: Court related: Salaries and benefits 948, , , ,349 Operating expenditures 509, , , ,153 Capital outlay 45,300 45,300 43,728 1,572 Total Expenditures 1,503,900 1,503, , ,074 Excess (Deficiency) of Revenues Over (Under) Expenditures , ,250 Other Financing Sources and Uses: Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balance , ,250 Fund Balance, October 1, ,162,599 2,162,599 Fund Balance, September 30, 2014 $ - $ - $ 2,755,849 $ 2,755,849 See notes to required supplementary information. 19

257 CLERK OF THE CIRCUIT COURT AND COMPTROLLER Notes to Required Supplementary Information The Clerk s Office operates under budget procedures pursuant to Florida Statutes. Annual budgets are legally adopted for the general fund and the public records modernization fund and are on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is at the fund level. Budgetary changes within the funds are made at the discretion of the Clerk. The proposed budget is also prepared, summarized, and submitted by the Clerk to the Florida Clerks of Court Operations Corporation. The proposed budget must provide detailed information on the anticipated revenues available and expenditures necessary for the performance of the court-related functions listed in Florida Statute 28.35(3)(a) of the Clerk s office. 20

258 Other Supplementary Information

259 CLERK OF THE CIRCUIT COURT AND COMPTROLLER COMBINING BALANCE SHEET - GENERAL FUND BY CATEGORY SEPTEMBER 30, 2014 General Fund Total General Court General Fund Services Fund Assets Cash and cash equivalents $ 570,188 $ 1,495,948 $ 2,066,136 Accounts receivable 10 2,879 2,889 Due from other governmental units 6,526-6,526 Total assets $ 576,724 $ 1,498,827 $ 2,075,551 Liabilities Accounts payable $ 14,555 $ 24,981 $ 39,536 Contracts payable 33,957 11,330 45,287 Accrued liabilities 69, , ,630 Due to other governmental units 388,580 1,235,678 1,624,258 Unearned revenue 70,283-70,283 Other current liabilities - 47,557 47,557 Total liabilities 576,724 1,498,827 2,075,551 Fund Balances Restricted for: State court operations Total fund balance Total liabilities and fund balance $ 576,724 $ 1,498,827 $ 2,075,551 21

260 CLERK OF THE CIRCUIT COURT AND COMPTROLLER COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GENERAL FUND BY CATEGORY YEAR ENDED SEPTEMBER 30, 2014 General General Fund Court Services Total General Fund Fund Revenues: Intergovernmental $ 19,756 $ 980,196 $ 999,952 Charges for services 1,517,279 3,929,477 5,446,756 Judgments, fines and forfeitures - 1,261,613 1,261,613 Investment income - 102, ,540 Miscellaneous revenue - 150, ,317 Total Revenues 1,537,035 6,424,143 7,961,178 Expenditures: Current: General government: Salaries and benefits 3,134,490-3,134,490 Operating expenditures 518, ,970 Capital outlay 6,029-6,029 Court related: Salaries and benefits - 5,569,105 5,569,105 Operating expenditures - 568, ,156 Payments to State - 339, ,317 Total Expenditures 3,659,489 6,476,578 10,136,067 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,122,454) (52,435) (2,174,889) Other Financing Sources and Uses: Transfers in 2,144,827-2,144,827 Transfers out (22,373) - (22,373) Total Other Financing Sources and Uses 2,122,454-2,122,454 Net Change in Fund Balance - (52,435) (52,435) Fund Balance, October 1, ,435 52,435 Fund Balance, September 30, 2014 $ - $ - $ - 22

261 CLERK OF THE CIRCUIT COURT AND COMPTROLLER GENERAL FUND COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2014 General Fund Budgeted Amounts Original Final Actual Revenues: Intergovernmental $ 60,000 $ 60,000 $ 19,756 Charges for services 1,606,265 1,606,265 1,517,279 Judgments, fines and forfeitures Investment income Miscellaneous revenue Total Revenues 1,666,265 1,666,265 1,537,035 Expenditures: Current: General government: Salaries and benefits 3,284,792 3,341,918 3,134,490 Operating expenditures 469, , ,970 Capital outlay - - 6,029 Court related: Salaries and benefits Operating expenditures Capital outlay Payments to State Total Expenditures 3,753,966 3,811,092 3,659,489 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,087,701) (2,144,827) (2,122,454) Other Financing Sources and Uses: Transfers in 2,087,701 2,144,827 2,144,827 Transfers out - - (22,373) Total Other Financing Sources (Uses) 2,087,701 2,144,827 2,122,454 Net Change in Fund Balance Fund Balance, October 1, Fund Balance, September 30, 2014 $ - $ - $ - 23

262 CLERK OF THE CIRCUIT COURT AND COMPTROLLER GENERAL FUND COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2014 General Fund - Court Services Budgeted Amounts Original Final Actual Total General Fund Budget Amounts Original Final Actual with Final Budget Positive (Negative) $ 6,849,739 $ 6,699,739 $ 980,196 $ 6,909,739 $ 6,759,739 $ 999,952 $ (5,759,787) - - 3,929,477 1,606,265 1,606,265 5,446,756 3,840, ,261, ,261,613 1,261, , , , , , ,317 6,849,739 6,699,739 6,424,143 8,516,004 8,366,004 7,961,178 (404,826) ,284,792 3,341,918 3,134, , , , ,970 (49,796) ,029 (6,029) 5,743,845 5,743,845 5,569,105 5,743,845 5,743,845 5,569, , , , , , , , , , , , ,317 (339,317) 6,849,739 6,699,739 6,476,578 10,603,705 10,510,831 10,136, , (52,435) (2,087,701) (2,144,827) (2,174,889) (30,062) ,087,701 2,144,827 2,144, (22,373) (22,373) ,087,701 2,144,827 2,122,454 (22,373) - - (52,435) - - (52,435) (52,435) , ,435 52,435 $ - $ - $ - $ - $ - $ - $ -. 24

263 CLERK OF THE CIRCUIT COURT AND COMPTROLLER COMBINING STATEMENT OF ASSETS AND LIABILITIES - ALL AGENCY FUNDS SEPTEMBER 30, 2014 Agency Funds Assets Court Registry Juror and Witness Restitution Domestic Relations General Trust TOTAL Cash and cash equivalents $ 3,320,355 $ 47,056 $ 43,803 $ 45,668 $ 239,410 $ 3,696,292 Accounts receivable ,053-23,053 Total Assets $ 3,320,355 $ 47,056 $ 43,803 $ 68,721 $ 239,410 $ 3,719,345 Liabilities Cash bonds payable $ - $ $ $ - $ 232,116 $ 232,116 Court registry payable 2,395, ,395,796 General trust payable ,294 7,294 Due to other governments - 47,056-1,803-48,859 Due to individuals 924,559-43,803 66,918-1,035,280 Total Liabilities $ 3,320,355 $ 47,056 $ 43,803 $ 68,721 $ 239,410 $ 3,719,345 25

264 CLERK OF THE CIRCUIT COURT AND COMPTROLLER COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - ALL AGENCY FUNDS YEAR ENDED SEPTEMBER 30, 2014 COURT REGISTRY ASSETS Balance Balance September 30, September 30, 2013 Additions Deductions 2014 Cash and cash equivalents $ 3,740,664 $ 15,692,927 $ 16,113,236 $ 3,320,355 LIABILITIES Court Registry Payable $ 3,246,106 $ 13,726,172 $ 14,576,482 $ 2,395,796 Due to individuals 494,558 1,967,854 1,537, ,559 Total Liabilities $ 3,740,664 $ 15,694,026 $ 16,114,335 $ 3,320,355 JUROR AND WITNESS ASSETS Cash and cash equivalents $ 37,327 $ 133,242 $ 123,513 $ 47,056 LIABILITIES Accounts payable $ - $ 121,133 $ 121,133 $ - Due to other governments 37, , ,888 47,056 Total Liabilities $ 37,327 $ 268,750 $ 259,021 $ 47,

265 CLERK OF THE CIRCUIT COURT AND COMPTROLLER COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - ALL AGENCY FUNDS YEAR ENDED SEPTEMBER 30, 2014 (Continued) Balance Balance September 30, September 30, 2013 Additions Deductions 2014 RESTITUTION ASSETS Cash and cash equivalents $ 113,857 $ 209,871 $ 279,925 $ 43,803 LIABILITIES Due to Individuals $ 113,857 $ 209,871 $ 279,925 $ 43,803 DOMESTIC RELATIONS ASSETS Cash and cash equivalents $ 44,235 $ 6,161,057 $ 6,159,624 $ 45,668 Accounts receivable 19,061 71,649 67,657 23,053 Total Assets $ 63,296 $ 6,232,706 $ 6,227,281 $ 68,721 LIABILITIES Due to other funds $ - $ - $ - $ - Due to other governmental units 1,793 10,289 10,279 1,803 Due to individuals 61,503 6,224,060 6,218,645 66,918 Total Liabilities $ 63,296 $ 6,234,349 $ 6,228,924 $ 68,721 27

266 CLERK OF THE CIRCUIT COURT AND COMPTROLLER COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - ALL AGENCY FUNDS YEAR ENDED SEPTEMBER 30, 2014 (Concluded) Balance Balance September 30, September 30, 2013 Additions Deductions 2014 GENERAL TRUST ASSETS Cash and cash equivalents $ 335,453 $ 976,174 $ 1,072,217 $ 239,410 LIABILITIES Cash bonds payable $ 326,602 $ 632,534 $ 727,020 $ 232,116 General trust payable 8, , ,415 7,294 Total Liabilities $ 335,453 $ 976,392 $ 1,072,435 $ 239,410 TOTALS - ALL AGENCY FUNDS ASSETS Cash and cash equivalents $ 4,271,536 $ 23,173,271 $ 23,748,515 $ 3,696,292 Accounts receivable 19,061 71,649 67,657 23,053 Total Assets $ 4,290,597 $ 23,244,920 $ 23,816,172 $ 3,719,345 LIABILITIES Accounts payable $ - $ 121,133 $ 121,133 $ - Cash bonds payable 326, , , ,116 Court registry payable 3,246,106 13,726,172 14,576,482 2,395,796 General trust payable 8, , ,415 7,294 Due to other governments 39, , ,167 48,859 Due to individuals 669,918 8,401,785 8,036,423 1,035,280 Total Liabilities $ 4,290,597 $ 23,383,388 $ 23,954,640 $ 3,719,

267 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Pam Childers, Clerk of Circuit Court and Comptroller Escambia County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements (hereinafter referred to as financial statements ) of each major fund and the aggregate remaining fund information of the Office of the Clerk of the Circuit Court and Comptroller of Escambia County, Florida (hereinafter referred to as Clerk ), as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Clerk s financial statements, and have issued our report thereon dated February 18, Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Clerk s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk s internal control. Accordingly, we do not express an opinion on the effectiveness of the Clerk s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 29

268 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this report is not suitable for any other purpose. Pensacola, Florida February 18,

269 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT ACCOUNTANTS REPORT ON EXAMINATION OF COMPLIANCE REQUIREMENTS IN ACCORDANCE WITH CHAPTER , RULES OF THE AUDITOR GENERAL We have examined the Office of the Clerk of the Circuit Court and Comptroller of Escambia County, Florida s (hereinafter referred to as the Clerk ) compliance with Florida Statute in regards to investments, and Florida Statutes and in regards to certain court-related functions for the year ended September 30, Management is responsible for the Clerk s compliance with those requirements. Our responsibility is to express an opinion on the Clerk s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Clerk s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk s compliance with specified requirements. In our opinion, the Clerk complied, in all material respects, with the aforementioned requirements for the year ended September 30, Pensacola, Florida February 18,

270 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com MANAGEMENT LETTER Honorable Pam Childers, Clerk of the Circuit Court and Comptroller Escambia County, Florida Report on the Financial Statements We have audited the financial statements ( financial statements ) of each major fund and the aggregate remaining fund information of the Office of the Clerk of the Circuit Court and Comptroller of Escambia County, Florida (hereinafter referred to as Clerk ), as of and for the year ended September 30, 2014, and the related notes to the financial statements, and have issued our report thereon dated February 18, Auditors Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter Rules of the Auditor General. Other Reports We have also issued our Independent Auditors Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountants Report on Examination of Compliance Requirements Performed in Accordance with Chapter , Rules of the Auditor General. Disclosures in those reports, which are dated February 18, 2015, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. No recommendations were made in the preceding annual financial report. Other Matters Section (1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. 32

271 Section (1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Clerk, and the Escambia County Board of County Commissioners and is not intended to be and should not be used by anyone other than these specified parties. February 18, 2015 Pensacola, Florida 33

272 CLERK S RESPONSE TO MANAGEMENT LETTER There were no comments which require management s written response. 34

273

274 FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION ESCAMBIA COUNTY, FLORIDA PROPERTY APPRAISER SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT

275 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT ESCAMBIA COUNTY, FLORIDA PROPERTY APPRAISER SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT CONTENTS Independent Auditors Report.. 1 Fund Financial Statements: Balance Sheet Governmental Fund... 3 Statement of Revenues, Expenditures, and Changes In Fund Balance Governmental Fund. 4 Notes to the Financial Statements. 5 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual General Fund 10 Notes to Required Supplemental Information 11 Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.. 12 Independent Accountants Report on Examination of Compliance Requirements in Accordance with Chapter , Rules of the Auditor General. 14 Management Letter Schedule of Findings and Responses.. 16

276 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITORS REPORT Honorable Chris Jones Escambia County Property Appraiser Escambia County, Florida Report on the Financial Statements We have audited the accompanying financial statements of the general fund of the Escambia County Property Appraiser, Escambia County, Florida (the Property Appraiser), as of and for the fiscal year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Property Appraiser s financial statements, as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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 auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1

277 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the general fund of the Property Appraiser as of September 30, 2014, and the respective changes in financial position thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of the general fund of the Property Appraiser. They do not purport to, and do not, present fairly the financial position of Escambia County, Florida as of September 30, 2014, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison schedule, as listed in the table of contents, be presented to supplement the financial statements. Such information, although not a required part of the financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the 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 financial statements, and other knowledge we obtained during our audit of the 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 Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report on our consideration of the Property Appraiser s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements and other matters included under the heading Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Property Appraiser s internal control over financial reporting and compliance. December 16, 2014 Pensacola, Florida 2

278 Financial Statements

279 PROPERTY APPRAISER BALANCE SHEET GOVERNMENTAL FUND SEPTEMBER 30, 2014 Major Fund General Fund Assets Cash and cash equivalents $ 254,666 Other assets 21,139 Total assets $ 275,805 Liabilities Accounts payable $ 38,002 Accrued liabilities 133,154 Due to other governmental units 104,649 Total liabilities 275,805 Fund Balance Unassigned: - Total fund blance - Total liabilities and fund balance $ 275,805 See accompanying notes to financial statements. 3

280 PROPERTY APPRAISER STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUND YEAR ENDED SEPTEMBER 30, 2014 Major Fund General Fund Revenues: Charges for services $ 14,337 Miscellaneous revenue 2,459 Total Revenues 16,796 Expenditures: Current: General government: Salaries and benefits 4,457,968 Operating expenditures 678,517 Capital outlay 90,817 Total Expenditures 5,227,302 Excess (Deficiency) of Revenues (Under) Expenditures (5,210,506) Other Financing Sources and Uses: Transfers in 5,314,903 Transfers out (104,397) Total Other Financing Sources and Uses 5,210,506 Net Change in Fund Balance - Fund Balance, October 1, Fund Balance, September 30, 2014 $ - See accompanying notes to financial statements 4

281 PROPERTY APPRAISER NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies The following is a summary of the significant principles and policies used in the preparation of these financial statements. A. Reporting entity The Escambia County, Florida Property Appraiser (Property Appraiser), is an elected constitutional officer as provided by Article VIII, Section 1 (d) of the Constitution of the State of Florida. The Property Appraiser s budget is submitted to the Escambia County Board of County Commissioners (the Board) for approval. The Board appropriates and distributes to the Property appraiser on a quarterly basis the funds necessary to operate the Property Appraiser s office. For financial reporting purposes, the Property Appraiser is deemed to be a part of the primary government of Escambia County, Florida (the County), and therefore, is included as such in the Escambia County, Florida, Comprehensive Annual Financial Report. B. Basis of presentation fund financial statements These financial statements have been prepared for the purpose of complying with Rules of the Auditor General, State of Florida, which require presentation of fund level only financial statements and permit omission of entity-wide full accrual financial statements and management s discussion and analysis. Therefore, these financial statements are intended to present only the financial position and changes in financial position of that portion of Escambia County, Florida, that relate to transactions of the Property Appraiser and are not intended to present the financial position and changes in financial position of Escambia County, Florida, taken as a whole. The Property Appraiser s financial records and accounts are maintained in accordance with the principles of fund accounting, whereby resources are classified for accounting and reporting purposes into funds to insure compliance with any special restrictions or limitations on the use of such resources. The Property Appraiser s general fund (a governmental fund type) is the sole operating fund of the Property Appraiser. No additional funds are required to be maintained. Fund Balance - Fund balances are classified either as non-spendable or as restricted, committed, assigned, and unassigned, based on the extent to which there are external and internal constraints on the spending. C. Measurement focus and basis of accounting The general fund is accounted for using the modified accrual basis of accounting. Revenues are recognized when they become susceptible to accrual that is when they are both measurable and available to finance expenditures of the current period. The Property Appraiser considers receivables collected within 60 days after year-end to be available and recognizes them as revenues of the current year. Expenditures generally are recognized under the modified accrual basis of accounting when the fund liability is incurred. However, expenditures for compensated absences are recognized when payments are made to employees. 5

282 PROPERTY APPRAISER NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies (Continued) D. Funding from the Board of County Commissioners Appropriations from the Board are recorded as transfers in on the Statement of Revenues, Expenditures and Changes in Fund Balance. In accordance with Florida Statutes, the General Fund s excess of revenues and transfers over expenditures is returned to the Board at year end and is reported as a transfer out on the Statement of Revenues, Expenditures and Changes in Fund Balance. 2. Cash deposits with financial institutions The investment of surplus funds is governed by the provisions of Florida Statute as to the type of investments that can be made. Deposits may be exposed to custodial credit risk, which is the risk of loss in the event of a bank failure. The Property Appraiser manages custodial credit risk by maintaining its deposits in financial institutions designated as Qualified Public Depositories by the State Treasurer. All deposits were fully insured through a combination of Federal depository insurance and participation of the financial institution in the multiple financial institution collateral pool as specified in Chapter 280, Florida Statutes. Accordingly, risk of loss due to bank failure is not significant. At September 30, 2014, the reported amount of the Property Appraiser s deposits was approximately $250,000, and the bank balance was approximately $300,000 consisting entirely of deposits in a checking account. 3. Transfers Transfers in consist of $5,314,903 from the Escambia County Board of County Commissioners, and transfers out represent excess appropriations and fees returned to the Board in the amount of $104, Due to/from other governments At September 30, 2014, the due to other governments totals $104,649 and mainly consists of excess appropriations and fees over expenditures payable to the Board in the amount of $104, Capital assets Capital assets (vehicles, equipment and other property costing at least $1,000 with a useful life of more than one year) are recorded as expenditures at the time of purchase. These assets are capitalized at cost and depreciated in Escambia County s government-wide financial statements. 6

283 PROPERTY APPRAISER NOTES TO FINANCIAL STATEMENTS 6. Retirement Plan Plan Description - The Property Appraiser participates in the Florida Retirement System (FRS), a cost sharing multiple-employer defined benefit pension plan, administered by the State of Florida. 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 Option Retirement Program (FRS Investment Plan). The effective date of the FRS Investment Plan was July 1, On July 1, 2011 the FRS became a contributory plan. The FRS provides retirement, disability and death benefits to members. The State of Florida issues a publicly available report that includes financial statements and required supplementary information for FRS. The report may be obtained at or may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P. O. Box 9000, Tallahassee, Florida For members hired before July 1, 2011 the FRS Pension Plan provides for the vesting of benefits after six years of creditable service. Members may retire at age 62, or thirty years of service regardless of age, whichever comes first. For members first enrolled after July 1, 2011 vesting occurs after eight years of credible service and age 65, or thirty-three years of service regardless of the age before 65. 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. Funding Policy - The FRS has six classes of membership. Only four of these classes are applicable to the Property Appraiser s eligible employees. The Property Appraiser is required to contribute at an actuarial determined rate. These rates are a percent of covered payroll. The four applicable classes, with descriptions and contribution rates in effect during the period ended September 30, 2014, 2013 and 2012 are as follows: Regular Class: 7.37% 6.95% 5.18% Members not qualifying for other classes. Senior Management Class: 21.14% 18.31% 6.30% Members of senior management who do not elect the optional annuity retirement program. Elected Officials Class: 43.24% 33.03% 10.23% Certain elected county officials. Deferred Retirement Option Program (DROP): 12.28% 12.84% 5.44% Members are enrolled in DROP from FRS The contribution requirements of the Property Appraiser and members are established and may be amended by FRS. The plan is contributory for employees requiring a 3% employee contribution. This is in addition to the contributions that are the obligation of the employer. The Property Appraiser s contributions to FRS for the years ended September 30, 2014, 2013 and 2012 were $336,013, $222,843 and $168,168, respectively, equal to the required contributions for each year. 7

284 PROPERTY APPRAISER NOTES TO FINANCIAL STATEMENTS 7. Other post-employment benefits (OPEB), other than pensions The Board offers post-employment health care benefits to all retired employees of the Property Appraiser s Office and their dependents. Participating retirees are required to reimburse the Board for 100% of the premium cost, which is netted against the premium payment, so that no net expense is initially recorded in the Board s financial statements. However, these retirees are receiving an implicit subsidy because the premium is a group rate which includes active, lower cost employees. This implicit subsidy has a cost which under GAAP is required to be disclosed in these financial statements. However, this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Property Appraiser s Office. Accordingly, these calculations and disclosures can be found in the County wide comprehensive annual financial report. 8. Risk management The County has a risk management program to insure claims against the Board, Constitutional Officers, and Santa Rosa Island Authority for the following types of risks: Workers Compensation The County is covered for workers compensation claims through a policy with the Florida Municipal Insurance Trust. Coverage limits under the policy include statutory limits, as well as $1,000,000 bodily injury for each accident and $1,000,000 bodily injury by disease for each employee with an aggregate $1,000,000 policy limit. Casualty and Property Casualty limits are self-insured for $200,000 per claim with a $300,000 aggregate limit. Property limits are $50,000 - $250,000 self insured retentions per occurrence with excess limits of $45 million including wind. The Property Appraiser participated in the County s insurance program during the year at a cost of $36,055. There also were no significant reductions in insurance coverage from the prior year and there have been no settlements which exceeded the Property Appraiser s insurance coverage in any of the past three fiscal years. 9. Accumulated Compensated Absences Employees may accumulate, subject to limitations, amounts of earned but unused sick leave, annual leave, and compensatory time, which will be paid upon separation from service. The amount of vested accumulated compensated absences payable (related to governmental fund activities) based upon the Property Appraisers paid-time-off (PTO) policy is reported as a liability in the statement of net position in the County s basic financial statements. That liability includes earned but unused vacation, sick and comp time as well as FICA taxes and retirement contributions related thereto. The change in accumulated compensated absences during the year is as follows: Balance 10/01/2013 $443,473 Increase 327,225 Decrease (318,644) Balance 09/30/2014 $452,054 8

285 PROPERTY APPRAISER NOTES TO FINANCIAL STATEMENTS 10. Litigation The Property Appraiser is contingently liable with respect to lawsuits and other claims which might be filed incidental to the ordinary course of operations. In the opinion of management, based on the advice of legal counsel, there are no lawsuits or claims outstanding which will have a material adverse effect on the financial position of the Property Appraiser s Office. 11. Subsequent events Property Appraiser has evaluated events and transactions for potential recognition or disclosure in the financial statements through December 16, 2014, the date the financial statements were available to be issued. No subsequent events have been recognized or disclosed. 9

286 Required Supplementary Information

287 PROPERTY APPRAISER GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2014 General Fund Budgeted Amounts Original Final Actual Variance with Final Budget Revenues: Charges for services $ 12,556 $ 12,556 $ 14,337 $ 1,781 Miscellaneous revenue - - 2,459 2,459 Total Revenues 12,556 12,556 16,796 4,240 Expenditures: Current: General government: Salaries and benefits 4,581,634 4,476,155 4,457,968 18,187 Operating expenditures 689, , ,517 32,261 Capital outlay - 90,817 90,817 - Reserved for contingencies 50,000 50,000-50,000 Total Expenditures 5,321,229 5,327,750 5,227, ,448 Excess (Deficiency) of Revenues Over (Under) Expenditures (5,308,673) (5,315,194) (5,210,506) 104,688 Other Financing Sources and Uses: Transfers in 5,308,673 5,315,194 5,314,903 (291) Transfers out - - (104,397) (104,397) Total Other Financing Sources (Uses) 5,308,673 5,315,194 5,210,506 (104,688) Net Change in Fund Balance Fund Balance, October 1, Fund Balance, September 30, 2014 $ - $ - $ - $ - See accompanying notes to required supplementary information. 10

288 PROPERTY APPRAISER NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2014 The Property Appraiser s Office operates under budget procedures pursuant to Florida Statutes. Annual budgets are legally adopted for the general fund on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is at the fund level. 11

289 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Chris Jones Property Appraiser Escambia County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Escambia County, Florida Property Appraiser (the Property Appraiser) as of and for the year ended September 30, 2014, and the related notes to the financial statements, and have issued our report thereon dated December 16, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Property Appraiser s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Property Appraiser s internal control. Accordingly, we do not express an opinion on the effectiveness of the Property Appraiser s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Property Appraiser s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 12

290 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Property Appraiser s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Property Appraiser s internal control and compliance. Accordingly, this report is not suitable for any other purpose. December 16, 2014 Pensacola, Florida 13

291 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT ACCOUNTANTS REPORT ON EXAMINATION OF COMPLIANCE REQUIREMENTS IN ACCORDANCE WITH CHAPTER , RULES OF THE AUDITOR GENERAL Honorable Chris Jones Property Appraiser Escambia County, Florida We have examined the Office of the Property Appraiser of Escambia County, Florida s (hereinafter referred to as Property Appraiser ) compliance with Florida Statute in regards to the investments for the year ended September 30, Management is responsible for the Property Appraiser s compliance with those requirements. Our responsibility is to express an opinion on the Property Appraiser s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Property Appraiser s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Property Appraiser s compliance with specified requirements. In our opinion, the Property Appraiser complied, in all material respects, with the aforementioned requirements for the year ended September 30, December 16, 2014 Pensacola, Florida 14

292 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com MANAGEMENT LETTER Honorable Chris Jones Property Appraiser Escambia County, Florida Report on the Financial Statements We have audited the financial statements of the general fund of the Office of the Property Appraiser of Escambia County, Florida, as of and for the fiscal year ended September 30, 2014, and the related notes to the financial statements, and have issued our report thereon December 16, Auditors Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter , Rules of the Auditor General. Other Reports We have issued our Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountants Report on Examination of Compliance Requirements in Accordance with Chapter , Rules of the Auditor General. Disclosures in those reports, which are December 16, 2014, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding audit report. Other Matters Section (1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section (1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Property Appraiser, Escambia County Board of County Commissioners, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. December 16, 2014 Pensacola, Florida 15

293 PROPERTY APPRAISER SCHEDULE OF FINDINGS AND RESPONSES September 30, 2014 There were no comments which require management s written response. 16

294

295 FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION ESCAMBIA COUNTY, FLORIDA SHERIFF SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT

296 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT ESCAMBIA COUNTY, FLORIDA SHERIFF SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT TABLE OF CONTENTS Independent Auditors Report Financial Statements: Required Supplementary Information: Other Supplementary Information: Combining and Individual Fund Financial Statements and Schedules:

297 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT ESCAMBIA COUNTY, FLORIDA SHERIFF SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT TABLE OF CONTENTS-(Continued) Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Accountants Report on Examination of Compliance Requirements in Accordance with Chapter , Rules of the Auditor General Management Letter Schedule of Findings and Responses

298 INDEPENDENT AUDITORS REPORT 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com Report on the Financial Statements Management s Responsibility for the Financial Statements Auditors Responsibility Government Auditing Standards

299 Opinions Emphasis of Matter Other Matters Required Supplementary Information Other Supplementary Information

300 Other Reporting Required by Government Auditing Standards Government Auditing Standards Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. Government Auditing Standards

301 Financial Statements

302 SHERIFF BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 Major Fund General Other Nonmajor Governmental Fund Funds Funds Assets Total Governmental Liabilities Fund Balance

303 SHERIFF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2014 Major Fund Other Nonmajor Total General Governmental Governmental Fund Funds Funds

304 SHERIFF STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES - AGENCY FUNDS SEPTEMBER 30, 2014 Assets Liabilities

305 SHERIFF NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies A. Reporting entity B. Basis of presentation fund financial statements Rules of the Auditor General, State of Floridafund level General Fund Special Revenue Funds Sheriff s Programs Fund

306 SHERIFF NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies (Continued) Commissary Fund Agency Funds C. Fund balance and flow assumptions Non-spendable Restricted Committed Assigned Unassigned

307 SHERIFF NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies (Continued) D. Measurement focus and basis of accounting Measurement Focus E. Funding Provided by Board of County Commissioners

308 SHERIFF NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies (Continued) F. Deferred outflows/inflows of resources deferred outflows of resources not deferred inflows of resources not 2. Deposits and Investments

309 SHERIFF NOTES TO FINANCIAL STATEMENTS 3. Receivables 4. Interfund receivables and payables 5. Due to / from other governments 6. Inventory 7. Capital Assets

310 7. Capital Assets (Continued) ESCAMBIA COUNTY, FLORIDA SHERIFF NOTES TO FINANCIAL STATEMENTS Governmental Activities: Balance Balance 10/01/13 Additions Deletions 09/30/14 Capital assets, being depreciated: Equipment $ 31,389,364 $ 3,606,828 $ (2,804,591) $ 32,191,601 Computer software 1,597,970 - (244,210) 1,353,760 Total capital assets, being depreciated $ 32,987,334 $ 3,606,828 $ (3,048,801) $ 33,545,361 Less accumulated depreciation for: Equipment $ (23,305,301) $ (3,525,163) $ 2,594,332 $ (24,236,132) Computer software (1,190,840) (180,651) 244,210 (1,127,281) Total accumulated depreciation $ (24,496,141) $ (3,705,814) $ 2,838,542 $ (25,363,413) Governmental activities capital assets, net $ 8,491,193 $ (98,986) $ (210,259) $ 8,181, Retirement plan Plan Description

311 SHERIFF NOTES TO FINANCIAL STATEMENTS 8. Retirement plan (Continued) Funding Policy Other postemployment benefit (OPEB) obligations, other than pensions

312 SHERIFF NOTES TO FINANCIAL STATEMENTS 10. Risk Management 11. Accumulated compensated absences 12. Federal and State Financial Assistance

313 SHERIFF NOTES TO FINANCIAL STATEMENTS 12. Federal and State Financial Assistance (Continued) 13. Fund Expenditure Details Account Description Law Enforcement Court Security Totals 14. Litigation 15. Commitments and Contingencies 16. Subsequent events

314 Required Supplementary Information

315 SHERIFF GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Original Final Actual Variance with Final Budget

316 SHERIFF NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

317 Other Supplementary Information

318 SHERIFF COMBINING BALANCE SHEET OTHER NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 Total Other Sheriff's Nonmajor Commissary Programs Governmental Fund Fund Funds Assets Cash and cash equivalents $ - $ 69,653 $ 69,653 Due from other governmental units - 13,442 Total assets $ - $ 83,095 $ 69,653 Liabilities Due to other funds $ - 13,442 $ 13,442 Unearned revenue - 69,653 69,653 Total liabilities - 83,095 83,095 Fund Balance Total fund balance Total liabilities and fund balance $ - $ 83,095 $ 83,095

319 SHERIFF COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2014 Total Other Sheriff's Nonmajor Commissary Programs Governmental Fund Fund Funds Revenues: Grant revenue $ - $ 265,416 $ 265,416 Judgments, fines and forfeitures - 75,743 75,743 Total Revenues - 341, ,159 Expenditures: Current: Public safety Salaries and benefits - 207, ,104 Operating expenditures 23,443 4,989 28,432 Capital outlay - 129, ,066 Total Expenditures 23, , ,602 Excess (Deficiency) of Revenues Over (Under) Expenditures (23,443) - (23,443) Other Financing Sources and Uses: Transfers in Transfers out (997,411) - (997,411) Total Other Financing Sources and Uses (997,411) - (997,411) Net Change in Fund Balance (1,020,854) - (1,020,854) Fund Balance, October 1, ,020,854-1,020,854 Fund Balance, September 30, 2014 $ - $ - $ -

320 SHERIFF SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (GAAP BASIS) AND ACTUAL - COMMISSARY FUND YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Original Final Actual Variance with Final Budget

321 SHERIFF SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (GAAP BASIS) AND ACTUAL - SHERIFF'S PROGRAMS FUND YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Original Final Actual Variance with Final Budget

322 SHERIFF COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES ALL AGENCY FUNDS SEPTEMBER 30, 2014 Agency Funds Evidence Flex Trust Trust Auction Assets Benefits Fund Fund Fund Liabilities

323 SHERIFF COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES ALL AGENCY FUNDS (Continued ) SEPTEMBER 30, 2014 Agency Funds General Employee Events Explorers' Fund TOTAL

324 SHERIFF COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES - ALL AGENCY FUNDS YEAR ENDED SEPTEMBER 30, 2014 FLEX BENEFITS Balance Balance September 30, September 30, 2013 Additions Deductions 2014 EVIDENCE TRUST FUND

325 TRUST FUND ESCAMBIA COUNTY, FLORIDA SHERIFF COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES - ALL AGENCY FUNDS YEAR ENDED SEPTEMBER 30, 2014 (Continued) Balance Balance September 30, September 30, 2013 Additions Deductions 2014 AUCTION FUND

326 SHERIFF COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES - ALL AGENCY FUNDS YEAR ENDED SEPTEMBER 30, 2014 (Continued) INMATE TRUST ACCOUNT Balance Balance September 30, September 30, 2013 Additions Deductions 2014 GENERAL EMPLOYEE EVENTS 26

327 SHERIFF COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES - ALL AGENCY FUNDS EXPLORERS' FUND YEAR ENDED SEPTEMBER 30, 2014 (Concluded) Balance Balance September 30, September 30, 2013 Additions Deductions 2014 TOTAL AGENCY FUNDS

328 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Government Auditing Standards Internal Control Over Financial Reporting deficiency in internal control material weakness significant deficiency

329 Compliance and Other Matters Government Auditing Standards Purpose of this Report Government Auditing Standards

330 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT ACCOUNTANTS REPORT ON EXAMINATION OF COMPLIANCE REQUIREMENTS IN ACCORDANCE WITH CHAPTER , RULES OF THE AUDITOR GENERAL

331 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com MANAGEMENT LETTER Report on the Financial Statements Auditors Responsibility Government Auditing Standards Other Reports Government Auditing Standards Prior Audit Findings Other Matters

332 Purpose of this Letter

333 SHERIFF SHERIFF S RESPONSE TO MANAGEMENT LETTER

334

335 FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION ESCAMBIA COUNTY, FLORIDA SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT

336 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT ESCAMBIA COUNTY, FLORIDA SUPERVISOR OF ELECTIONS SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT CONTENTS Independent Auditors Report... 1 Financial Statements Balance Sheet Governmental Funds... 3 Statement of Revenues, Expenditures, and Changes In Fund Balance Governmental Funds... 4 Notes to the Financial Statements... 5 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Grant Fund Notes to Required Supplementary Information Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statement Performed in Accordance with Government Auditing Standards Independent Accountants Report on Examination of Compliance Requirements in Accordance with Chapter , Rules of the Auditor General Management Letter Schedule of Findings and Responses... 17

337 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com Honorable David Stafford Supervisor of Elections Escambia County, Florida INDEPENDENT AUDITORS REPORT Report on the Financial Statements We have audited the accompanying financial statements of the general fund and the grant fund of the Escambia County, Florida Supervisor of Elections, as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Supervisor of Elections 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 auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the general fund and the grant fund of the Supervisor of Elections as of September 30, 2014, and the respective changes in financial position, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. 1

338 In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of the general fund and grant fund attributable solely to the operations of the Supervisor of Elections. They do not purport to, and do not, present fairly the financial position of Escambia County, Florida, as of September 30, 2014, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison schedule and related notes, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a required 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 Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report on our consideration of the Supervisor of Elections internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters included under the heading Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Supervisor of Elections internal control over financial reporting and compliance. December 17, 2014 Pensacola, Florida 2

339 Financial Statements

340 SUPERVISOR OF ELECTIONS BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 Major Funds General Fund Grant Fund Assets Due from other governmental units $ 100,716 $ 750 Total assets $ 100,716 $ 750 Liabilities Accounts payable $ 75,824 $ 750 Accrued liabilities 24,623 - Due to other governmental units Total liabilities 100, Fund Balance Unassigned: - - Total fund blance - - Total liabilities and fund balance $ 100,716 $ 750 See accompanying notes to financial statements. 3

341 SUPERVISOR OF ELECTIONS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2014 Major Funds General Fund Grant Fund Revenues: Grant revenue $ - $ 48,732 Charges for services 3,431 - Total Revenues 3,431 48,732 Expenditures: Current: General government: Salaries and benefits 1,139,074 - Operating expenditures 582,006 - Operating expenditures-grants - 48,732 Capital outlay 41,521 - Total Expenditures 1,762,601 48,732 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,759,170) - Other Financing Sources and Uses: Transfers in 1,759,170 - Total Other Financing Sources and Uses 1,759,170 - Net Change in Fund Balance - - Fund Balance, October 1, Fund Balance, September 30, 2014 $ - $ - See accompanying notes to financial statements. 4

342 1. Summary of Significant Accounting Policies ESCAMBIA COUNTY, FLORIDA SUPERVISOR OF ELECTIONS NOTES TO FINANCIAL STATEMENTS The following is a summary of the significant principles and policies used in the preparation of these financial statements. A. Reporting entity The Escambia County, Florida Supervisor of Elections is an elected constitutional officer as provided by Article VIII, Section 1 (d) of the Constitution of the State of Florida. The Supervisor of Elections budget is submitted to the Escambia County Board of County Commissioners (the Board) for approval. The Board appropriates and provides funding necessary to operate the Supervisor of Elections office. For financial reporting purposes, the Supervisor of Elections is deemed to be a part of the primary government of Escambia County, Florida (the County), and therefore, is included as such in the Escambia County, Florida, Comprehensive Annual Financial Report. B. Basis of presentation fund financial statements These financial statements have been prepared for the purpose of complying with Rules of the Auditor General, State of Florida, which require presentation of fund level only financial statements and permit omission of entity-wide full accrual financial statements and management s discussion and analysis. Therefore, these financial statements are intended to present only the financial position and changes in financial position of that portion of Escambia County, Florida, that relate to transactions of the Supervisor of Elections and are not intended to present the financial position and changes in financial position of Escambia County, Florida, taken as a whole. The Supervisor of Elections financial records and accounts are maintained in accordance with the principles of fund accounting, whereby resources are classified for accounting and reporting purposes into funds to insure compliance with any special restrictions or limitations on the use of such resources. The Supervisor of Elections maintains two governmental funds as follows: General Fund- Accounts for all financial resources except those required to be accounted for in other funds. Grant Fund Accounts for activities of various federal and state grants. Fund balances are classified either as non-spendable or as restricted, committed, assigned, and unassigned, based on the extent to which there are external and internal constraints on the spending. The general fund and grant fund are accounted for using the modified accrual basis of accounting. Revenues are recognized when they become susceptible to accrual that is when they are both measurable and available to finance expenditures of the current period. The Supervisor of Elections considers receivables collected within 60 days after year-end to be available and recognizes them as revenues of the current year. Expenditures generally are recognized under the modified accrual basis of accounting when the fund liability is incurred. However, expenditures for compensated absences are recognized when payments are made to employees. Unearned revenues reflect grant amounts collected before revenue recognition criteria are met. 5

343 SUPERVISOR OF ELECTIONS NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies (Continued) C. Funding from the Board of County Commissioners Appropriations from the Board are recorded as transfers in on the Statement of Revenues, Expenditures and Changes in Fund Balance. In accordance with Florida Statutes, the general fund s excess of revenues and transfers over expenditures is returned to the Board at year end and is reported as a transfer out on the Statement of Revenues, Expenditures and Changes in Fund Balance 2. Cash deposits with financial institutions The Supervisor of Elections does not maintain a separate cash account. The Escambia County Clerk of the Circuit Court and Comptroller, serving as the accountant for the Supervisor of Elections, records all cash activity using a pooled cash account of the Board of County Commissioners. The due from reflected on the Supervisor of Elections balance sheet represents the amount of cash held by the Board on behalf of the Supervisor of Elections. The Board manages custodial credit risk by maintaining its deposits in financial institutions designated as Qualified Public Depositories by the State Treasurer. All deposits were fully insured through a combination of Federal depository insurance and participation of the financial institution in the multiple financial institution collateral pool as specified in Chapter 280, Florida Statutes. Accordingly, risk of loss due to bank failure is not significant. 3. Due to/from other governments At September 30, 2014, the amounts due to other governmental units totaled $269 and was payable to the Board. The due from other governmental units totaled $100,716 and was receivable from the Board. 4. Capital assets Capital assets (vehicles, equipment and other property costing at least $1,000 with a useful life of more than one year) are recorded as expenditures at the time of purchase. These assets are capitalized at cost and depreciated in Escambia County s government-wide financial statements. 5. Retirement plan Plan Description The Supervisor of Elections participates in the Florida Retirement System (FRS), a cost sharing multiple-employer defined benefit pension plan, administered by the State of Florida. 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 Option Retirement Program (FRS Investment Plan). The effective date of the FRS Investment Plan was July 1, On July 1, 2011 the FRS became a contributory plan. The FRS provides retirement, disability and death benefits to members. The State of Florida issues a publicly available report that includes financial statements and required supplementary information for FRS. The report may be obtained at or may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida

344 SUPERVISOR OF ELECTIONS NOTES TO FINANCIAL STATEMENTS 5. Retirement plan (Continued) For members hired before July 1, 2011 the FRS Pension Plan provides for the vesting of benefits after six years of creditable service and age 62, or thirty years of service regardless of age, whichever comes first. For members first enrolled after July 1, 2011 vesting occurs after eight years of credible service. Members may retire at age 62, or thirty-three years of service regardless of the age before 65. 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. Funding Policy - The FRS has six classes of membership. Only four of these classes are applicable to the Supervisor of Elections eligible employees. The Supervisor of Elections is required to contribute at an actuarially determined rate. These rates are a percentage of covered payroll. The four applicable classes, with descriptions and contribution rates in effect during the period ended September 30, 2014, 2013 and 2012 were as follows: Regular Class: 7.37% 6.95% 5.18% Members not qualifying for other classes. Senior Management Class: 21.14% 18.31% 6.30% Members of senior management who do not elect the optional annuity retirement program. Elected Officials Class: 43.24% 33.03% 10.23% Certain elected county officials. Deferred Retirement Option Program (DROP): 12.28% 12.84% 5.44% Members are enrolled in DROP from FRS The contribution requirements of the Supervisor of Elections and members are established and may be amended by FRS. The plan is contributory for employees requiring a 3% employee contribution. This is in addition to the contributions that are the obligation of the employer. The Supervisor of Elections contributions for 2014, 2013 and 2012 were $87,507, $54,495 and $42,396 respectively, and equaled the required contributions for each year. 6. Other post employment benefits (OPEB), other than pensions The Board offers post-employment health care benefits to all retired employees of the Supervisor of Elections Office and their dependents. Participating retirees are required to reimburse the Board for 100% of the premium cost, which is netted against the premium payment, so that no net expense is initially recorded in the Board s financial statements. However, these retirees are receiving an implicit subsidy because the premium is a group rate which includes active, lower cost employees. This implicit subsidy has a cost which under GAAP is required to be disclosed in these financial statements. However, this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Supervisor of Elections Office. Accordingly, these calculations and disclosures can be found in the County-wide comprehensive annual financial report. 7

345 SUPERVISOR OF ELECTIONS NOTES TO FINANCIAL STATEMENTS 7. Risk management The County has a risk management program to insure claims against the Board, Constitutional Officers, and Santa Rosa Island Authority for the following types of risks: Workers Compensation The County is covered for workers compensation claims through a policy with the Florida Municipal Insurance Trust. Coverage limits under the policy include statutory limits, as well as $1,000,000 bodily injury for each accident and $1,000,000 bodily injury by disease for each employee with an aggregate $1,000,000 policy limit. Casualty and Property Casualty limits are self-insured for $200,000 per claim with a $300,000 aggregate limit. Property limits are $50,000 - $250,000 self insured retentions per occurrence with excess limits of $45 million including wind. The Supervisor of Elections participated in the County s insurance program during fiscal year 2014 at a cost of $2,764. There also were no significant reductions in insurance coverage from the prior year and there have been no settlements which exceeded the Supervisor of Elections insurance coverage in any of the past three fiscal years. 8. Accumulated compensated absences Employees may accumulate, subject to limitations, amounts of earned but unused paid time off, which will be paid upon separation from service. The amount of vested accumulated compensated absences payable based upon the Supervisor of Elections paid-time-off (PTO) policy is reported as a liability in the statement of net position in the County s basic financial statements. That liability includes earned but unused PTO as well as FICA taxes and retirement contributions related thereto. Compensated absences are paid from the General Fund. The change in accumulated compensated absences during the year was as follows: Compensated Absences Balance 10/01/2013 $ 139,368 Increases 122,220 Decreases (68,541) Balance 09/30/2014 $ 193, Commitments and contingencies The Supervisor of Elections receives federal and state financial assistance primarily in the form of capital and operating grants. The expenditure of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by grantor agencies. Disallowed costs, if any, resulting from such audits, may become liabilities of the Supervisor of Elections. However, in the opinion of management, disallowed costs, if any, will not have a material effect on the financial statements. 8

346 10. Related party transactions ESCAMBIA COUNTY, FLORIDA SUPERVISOR OF ELECTIONS NOTES TO FINANCIAL STATEMENTS During 2014, the Board of County Commissioners purchased capital assets totaling approximately $628,905 on behalf of the Supervisor of Elections. 11. Subsequent events The Supervisor of Elections has evaluated events and transactions for potential recognition or disclosure in the financial statements through December 17, 2014, the date the financial statements were available to be issued. No subsequent events have been recognized or disclosed. 9

347 Required Supplementary Information

348 SUPERVISOR OF ELECTIONS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2014 General Fund Budgeted Amounts Original Final Actual Variance with Final Budget Revenues: Charges for services $ - $ - $ 3,431 $ 3,431 Total Revenues - - 3,431 3,431 Expenditures: Current: General government: Salaries and benefits 1,153,706 1,174,511 1,139,074 35,437 Operating expenditures 706, , , ,882 Capital outlay 45,000 45,000 41,521 3,479 Total Expenditures 1,905,594 1,926,399 1,762, ,798 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,905,594) (1,926,399) (1,759,170) 167,229 Other Financing Sources and Uses: Transfers in 1,905,594 1,926,399 1,759,170 (167,229) Total Other Financing Sources (Uses) 1,905,594 1,926,399 1,759,170 (167,229) Net Change in Fund Balance Fund Balance, October 1, Fund Balance, September 30, 2014 $ - $ - $ - $ - See accompanying notes to required supplementary information 10

349 SUPERVISOR OF ELECTIONS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2014 Grant Fund Budgeted Amounts Original Final Actual Variance with Final Budget Revenues: Grant revenue $ - $ 48,732 $ 48,732 $ - Total Revenues - 48,732 48,732 - Expenditures: Current: General government: Operating expenditures grants - 48,732 48,732 - Total Expenditures - 48,732 48,732 - Net Change in Fund Balance Fund Balance, October 1, Fund Balance, September 30, 2014 $ - $ - $ - $ - See accompanying notes to required supplementary information 11

350 SUPERVISOR OF ELECTIONS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION The Supervisor of Elections operates under budget procedures pursuant to Florida Statutes. The budget is adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the fund level. 12

351 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIALSTATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable David Stafford Supervisor of Elections Escambia County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements (hereinafter referred to as financial statements ) of the general fund and the grant fund of the Supervisor of Elections of Escambia County, Florida (hereinafter referred to as Supervisor of Elections ), as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Supervisor of Elections financial statements, and have issued our report thereon dated December 17, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Supervisor of Elections internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Supervisor of Elections internal control. Accordingly, we do not express an opinion on the effectiveness of the Supervisor of Elections internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Supervisor of Elections financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 13

352 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this report is not suitable for any other purpose. December 17, 2014 Pensacola, Florida 14

353 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com INDEPENDENT ACCOUNTANTS REPORT ON EXAMINATION OF COMPLIANCE REQUIREMENTS IN ACCORDANCE WITH CHAPTER , RULES OF THE AUDITOR GENERAL Honorable David Stafford Supervisor of Elections Escambia County, Florida We have examined the Office of the Supervisor of Elections of Escambia County, Florida s (hereinafter referred to as the Supervisor of Elections ) compliance with Florida Statute in regards to the investments for the year ended September 30, Management is responsible for the Supervisor of Elections compliance with those requirements. Our responsibility is to express an opinion on the Supervisor of Elections compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Supervisor of Elections compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Supervisor of Elections compliance with specified requirements. In our opinion, the Supervisor of Elections complied, in all material respects, with the aforementioned requirements for the year ended September 30, December 17, 2014 Pensacola, Florida 15

354 MANAGEMENT LETTER 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com Honorable David Stafford Supervisor of Elections Escambia County, Florida Report on the Financial Statements We have audited the financial statements (hereinafter referred to as financial statements ) of the general fund and the grant fund of the Office of the Supervisor of Elections of Escambia County, Florida (hereinafter referred to as the Supervisor of Elections ), as of and for the year ended September 30, 2014, and the related notes to the financial statements, and have issued our report thereon dated December 17, Auditors Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter Rules of the Florida Auditor General. Other Reports We have issued our Independent Auditors Report on Internal Control Over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountants Report on Examination of Compliance Requirements in Accordance with Chapter , Rules of the Auditor General. Disclosures in those reports, which are dated December 17, 2014, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. No recommendations were made in the preceding annual financial audit report. Other Matters Section (1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section (1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Supervisor of Elections, Escambia County Board of County Commissioners, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. December 17, 2014 Pensacola, Florida 16

355 ANNUAL AUDIT REPORT SUPERVISOR OF ELECTIONS ESCAMBIA COUNTY, FLORIDA SCHEDULE OF FINDINGS AND REPONSES September 30, 2014 There were no comments which require management's written response. 17

356

357 FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION ESCAMBIA COUNTY, FLORIDA TAX COLLECTOR SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT

358 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT ESCAMBIA COUNTY, FLORIDA TAX COLLECTOR SEPTEMBER 30, 2014 WITH INDEPENDENT AUDITORS REPORT CONTENTS Independent Auditors Report... 1 Financial Statements: Balance Sheet Governmental Fund... 3 Statement of Revenues, Expenditures, and Changes In Fund Balance Governmental Fund... 4 Statement of Fiduciary Assets and Liabilities Agency Funds... 5 Notes to the Financial Statements... 6 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Notes to Required Supplementary Information Other Supplementary Information Combining Statement of Assets and Liabilities Agency Funds Combining Statement of Changes in Assets and Liabilities Agency Funds Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Accountants Report on Examination of Compliance Requirements In Accordance with Chapter , Rules of the Auditor General Management Letter Schedule of Findings and Responses... 21

359 Honorable Janet Holley Tax Collector Escambia County, Florida INDEPENDENT AUDITORS REPORT Report on the Financial Statements We have audited the accompanying financial statements of the general fund and the aggregate remaining fund information of the Office of the Tax Collector of Escambia County, (hereinafter referred to as Tax Collector ), as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Tax Collector s financial statements, as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the general fund and the aggregate remaining fund information of the Tax Collector as of September 30, 2014, and the respective changes in financial position, where applicable, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. 1

360 Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of the general fund, and the aggregate remaining fund information attributable to the Tax Collector. They do not purport to, and do not, present fairly the financial position of Escambia County, Florida, as of September 30, 2014, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison schedule and related notes, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a required 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. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Tax Collector s financial statements. The Combining Statement of Assets and Liabilities Agency Funds, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of these financial statements. The Combining Statement of Assets and Liabilities Agency Funds is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, The Combining Statement of Assets and Liabilities Agency Funds is fairly stated, in all material respects in relation to the financial statements taken as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report on our consideration of the Tax Collector s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters included under the heading Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Tax Collector s internal control over financial reporting and compliance. December 22, 2014 Pensacola, Florida 2

361 Financial Statements

362 TAX COLLECTOR BALANCE SHEET GOVERNMENTAL FUND SEPTEMBER 30, 2014 Major Fund General Fund Assets Cash and cash equivalents $ 540,630 Accounts receivable 84 Total Assets $ 540,714 Liabilities Accounts payable $ 215,005 Accrued liabilities 124,752 Due to other governmental units 153,027 Unearned revenue 47,930 Total liabilities 540,714 Fund Balance Total liabilities and fund balance $ 540,714 - See accompanying notes to financial statements. 3

363 TAX COLLECTOR STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUND YEAR ENDED SEPTEMBER 30, 2014 Major Fund General Fund Revenues: Charges for services $ 2,746,527 Miscellaneous revenue 125,154 Total Revenues 2,871,681 Expenditures: Current: General government: Salaries and benefits 5,356,922 Operating expenditures 1,506,602 Capital outlay 19,687 Total Expenditures 6,883,211 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,011,530) Other Financing Sources and Uses: Transfers in 4,164,144 Transfers out (152,614) Total Other Financing Sources and Uses 4,011,530 Net Change in Fund Balance - Fund Balance, October 1, Fund Balance, September 30, 2014 $ - See accompanying notes to financial statements 4

364 TAX COLLECTOR STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES - AGENCY FUNDS SEPTEMBER 30, 2014 Assets Cash and cash equivalents $ 8,349,949 Accounts receivable 258,524 Total Assets $ 8,608,473 Liabilities Accounts payable $ 442,650 Due to other governmental units 8,165,823 Total Liabilities $ 8,608,473 See accompanying notes to financial statements. 5

365 1. Summary of Significant Accounting Policies ESCAMBIA COUNTY, FLORIDA TAX COLLECTOR NOTES TO THE FINANCIAL STATEMENTS The following is a summary of the significant principles and policies used in the preparation of these financial statements. A. Reporting entity The Escambia County, Florida Tax Collector (Tax Collector) is an elected constitutional officer as provided by Article VIII, Section 1 (d) of the Constitution of the State of Florida. The Tax Collector s budget is approved by the Florida Department of Revenue and submitted to the Escambia County Board of County Commissioners (the Board) for approval. The Board pays a monthly fee to the Tax Collector for collection of property taxes based on a statutory formula. The remainder of the budget is funded by fees earned for providing services for other governmental agencies. For financial reporting purposes, the Tax Collector is deemed to be a part of the primary government of Escambia County, Florida (the County), and therefore, is included as such in the Escambia County, Florida, Comprehensive Annual Financial Report. B. Basis of presentation fund financial statements These financial statements have been prepared for the purpose of complying with Rules of the Auditor General, State of Florida, which require presentation of fund level only financial statements and permit omission of entity-wide full accrual financial statements and management s discussion and analysis. Therefore, these financial statements are intended to present only the financial position and changes in financial position of that portion of Escambia County, Florida, that relate to transactions of the Tax Collector and are not intended to present the financial position and changes in financial position of Escambia County, Florida, taken as a whole. The Tax Collector s financial records and accounts are maintained in accordance with the principles of fund accounting, whereby resources are classified for accounting and reporting purposes into funds to insure compliance with any special restrictions or limitations on the use of such resources. The Tax Collector s funds are defined as follows: Governmental Funds: The General Fund is the general operating fund of the Tax Collector. It is used to account for all financial resources except those required to be accounted for in other funds. The agency funds are used to account for assets held for individuals, private organizations, or other governments and consist primarily of taxes and fees collected but not distributed to other governments. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of the results of operations. Fund balances are classified either as non-spendable or as restricted, committed, assigned, and unassigned, based on the extent to which there are external and internal constraints on the spending. C. Measurement focus and basis of accounting The general fund is accounted for using the current resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become susceptible to accrual that is when they are both measurable and available to finance expenditures of the current period. The Tax Collector considers receivables collected within 60 days after year-end to be available and recognizes them as revenues of the current year. Expenditures generally are recorded when the related fund liability is incurred. However, expenditures for compensated absences are recognized when payments are made to employees. Fiduciary fund financial statements are reported using the accrual basis of accounting. 6

366 TAX COLLECTOR NOTES TO THE FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies (Continued) D. Funding from Board of County Commissioners Commissions from the Board are recorded as transfers in on the Statement of Revenues, Expenditures and Changes in Fund Balance. In accordance with Florida Statutes, the General Fund s excess of revenues and transfers over expenditures is returned to the Board at year end and is reported as a transfer out on the Statement of Revenues, Expenditures and Changes in Fund Balance. 2. Deposits and Investments The investment of surplus funds is governed by the provisions of Florida Statute as to the type of investments that can be made. Deposits may be exposed to custodial credit risk, which is the risk of loss in the event of a bank failure. The Tax Collector manages custodial credit risk by maintaining its deposits in financial institutions designated as Qualified Public Depositories by the State Treasurer. All deposits were fully insured through a combination of Federal depository insurance and participation of the financial institutions in the multiple financial institution collateral pool as specified in Chapter 280, Florida Statutes. Accordingly, risk of loss due to bank failure is not significant. At September 30, 2014, the reported amount of the Tax Collector s deposits was approximately $8.9 million, and the bank balance was approximately $9.3 million, consisting entirely of deposits in checking and saving accounts. 3. Interfund receivables, payables and transfers Interfund receivables and payables consist of amounts due to or from funds during the normal course of business. At September 30, 2014, there were no interfund receivables or payables within the Tax Collector s funds. Transfers in consist of $4,164,144 from the Board of County Commissioners, and transfers out (excess budget and fees to the Board) totaled $152, Due to/from other governments At September 30, 2014, the due to other governmental units totals $153,027, and is payable to the Board and is comprised mainly of excess fees over expenditures. 5. Capital assets Capital assets (vehicles, equipment and other property costing at least $1,000 with a useful life of more than one year) are recorded as expenditures at the time of purchase. These assets are capitalized at cost and depreciated in Escambia County s government-wide financial statements. 7

367 TAX COLLECTOR NOTES TO THE FINANCIAL STATEMENTS 6. Retirement Plan Plan Description The Tax Collector participates in the Florida Retirement System (FRS), a cost sharing multiple-employer defined benefit pension plan, administered by the State of Florida. 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 Option Retirement Program (FRS Investment Plan). The effective date of the FRS Investment Plan was July 1, On July 1, 2011 the FRS became a contributory plan. The FRS provides retirement, disability and death benefits to members. The State of Florida issues a publicly available report that includes financial statements and required supplementary information for FRS. The report may be obtained at or may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida For members hired before July 1, 2011 the FRS Pension Plan provides for the vesting of benefits after six years of creditable service. Members may retire at age 62, or thirty years of service regardless of age, whichever comes first. For members first enrolled after July 1, 2011 vesting occurs after eight years of credible service and age 65, or thirty-three years of service regardless of the age before 65. 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. Funding Policy - The FRS has six classes of membership. Only four of these classes are applicable to the Tax Collector s eligible employees. The Tax Collector is required to contribute at an actuarial determined rate. These rates are a percent of covered payroll. The four applicable classes, with descriptions and contribution rates in effect during the period ended September 30, 2014, 2013 and 2012 are as follows: Regular Class: 7.37% 6.95% 5.18% Members not qualifying for other classes. Senior Management Class: 21.14% 18.31% 6.30% Members of senior management who do not elect the optional annuity retirement program. Elected Officials Class: 43.24% 33.03% 10.23% Certain elected county officials. Deferred Retirement Option Program (DROP): 12.28% 12.84% 5.44% Members are enrolled in DROP from FRS The contribution requirements of the Tax Collector and members are established and may be amended by FRS. The plan is contributory for employees requiring a 3% employee contribution. This is in addition to the contributions that are the obligation of the employer. The Tax Collector s contributions to FRS for the years ended September 30, 2014, 2013 and 2012 were $385,233, $267,213, and $204,121 respectively, and were equal to the required contributions for each year. 8

368 TAX COLLECTOR NOTES TO THE FINANCIAL STATEMENTS 7. Other post-employment benefits (OPEB), other than pensions The Board offers post-employment health care benefits to all retired employees of the Tax Collector s Office and their dependents. Participating retirees are required to reimburse the Board for 100% of the premium cost, which is netted against the premium payment, so that no net expense is initially recorded in the Board s financial statements. However, these retirees are receiving an implicit subsidy because the premium is a group rate which includes active, lower cost employees. This implicit subsidy has a cost which under GAAP is required to be disclosed in these financial statements. However, this annual cost, the accrued obligation, and other required disclosures have been calculated for the County as a whole, and not separately for the Tax Collector s Office. Accordingly, these calculations and disclosures can be found in the County-wide comprehensive annual financial report. 8. Risk management The County has a risk management program to insure claims against the Board, Constitutional Officers, and Santa Rosa Island Authority for the following types of risks: Workers Compensation The County is covered for workers compensation claims through a policy with the Florida Municipal Insurance Trust. Coverage limits under the policy include statutory limits, as well as $1,000,000 bodily injury for each accident and $1,000,000 bodily injury by disease for each employee with an aggregate $1,000,000 policy limit. Casualty and Property Casualty limits are self-insured for $200,000 per claim with a $300,000 aggregate limit. Property limits are $50,000 - $250,000 self-insured retentions per occurrence with excess limits of $45 million including wind. The Tax Collector participated in the County s insurance program during fiscal year 2014 at a cost of $10,883. There also were no significant reductions in insurance coverage from the prior year and there have been no settlements which exceeded the Tax Collector s insurance coverage in any of the past three fiscal years. 9. Commitments and contingencies Operating leases The Tax Collector is committed to an operating lease for office space with noncancellable terms in excess of one year. Future minimum lease payments are as follows: 2014 Year Amount , , , , ,500 Thereafter 455,625 $1,468,125 Rent expense for the year ended September 30, 2014 was $479,243, which included a $130,000 settlement fee related to the termination of the Warrington Tax Collector office building lease. 9

369 10. Accumulated Compensated Absences ESCAMBIA COUNTY, FLORIDA TAX COLLECTOR NOTES TO THE FINANCIAL STATEMENTS Employees may accumulate, subject to limitations, amounts of earned but unused paid time off, which will be paid upon separation from service. The amount of vested accumulated compensated absences payable is reported as a liability in the statement of net position in the County s basic financial statements. That liability includes earned but unused paid time off as well as FICA taxes and retirement contributions related thereto. The change in accumulated compensated absences during the year is as follows: Balance, September 30, 2013 $ 669,002 Additions 386,475 Reductions (427,487) Balance, September 30, 2014 $ 627, Litigation The Tax Collector is contingently liable with respect to lawsuits and other claims which might be filed incidental to the ordinary course of operations. In the opinion of management, based on the advice of legal counsel, there are no lawsuits or claims outstanding which will have a material adverse effect on the financial position of the Tax Collector s Office. 12. Subsequent events The Tax Collector has evaluated events and transactions for potential recognition or disclosure in the financial statements through December 22, 2014, the date the financial statements were available to be issued. No subsequent events have been recognized or disclosed. 10

370 Required Supplementary Information

371 TAX COLLECTOR GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACUTAL YEAR ENDED SEPTEMBER 30, 2014 General Fund Budgeted Amounts Original Final Actual Variance with Final Budget Revenues: Charges for services $ 3,009,110 $ 3,009,110 $ 2,746,527 $ (262,583) Miscellaneous revenue 84,600 84, ,154 40,554 Total Revenues 3,093,710 3,093,710 2,871,681 (222,029) Expenditures: Current: General government: Salaries and benefits 5,558,540 5,513,853 5,356, ,931 Operating expenditures 1,492,435 1,517,435 1,506,602 10,833 Capital outlay - 19,687 19,687 - Total Expenditures 7,050,975 7,050,975 6,883, ,764 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,957,265) (3,957,265) (4,011,530) (54,265) Other Financing Sources and Uses: Transfers in 4,164,144 4,164,144 4,164,144 - Transfers out (206,879) (206,879) (152,614) 54,265 Total Other Financing Sources (Uses) 3,957,265 3,957,265 4,011,530 54,265 Net Change in Fund Balance Fund Balance, October 1, Fund Balance, September 30, 2014 $ - $ - $ - $ - See accompanying notes to required supplementary information. 11

372 TAX COLLECTOR NOTES TO REQUIRED SUPPLEMENTARY INFORMATION The Tax Collector s Office operates under budget procedures pursuant to Florida Statutes. An annual budget is adopted for the general fund on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is at the fund level. 12

373 Other Supplementary Information

374 TAX COLLECTOR COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUNDS SEPTEMBER 30, 2014 Agency Funds Assets Tax Fund Tag Fund TOTAL Cash and cash equivalents $ 7,444,291 $ 905,658 $ 8,349,949 Accounts receivable , ,524 Total Assets $ 7,444,542 $ 1,163,931 $ 8,608,473 Liabilities Accounts payable $ 260,797 $ 181,853 $ 442,650 Due to other governmental units 7,183, ,078 8,165,823 Total Liabilities $ 7,444,542 $ 1,163,931 $ 8,608,473 13

375 TAX COLLECTOR COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS YEAR ENDED SEPTEMBER 30, 2014 Balance Balance September 30, September 30, 2013 Additions Deductions 2014 TAX FUND ASSETS Cash and cash equivalents $ 3,087,644 $ 286,495,249 $ 282,138,602 $ 7,444,291 Accounts Recievable Total Assets 3,087, ,495, ,138,602 7,444,542 LIABILITIES Accounts payable $ 408,862 $ 13,700,806 $ 13,848,871 $ 260,797 Due to other governmental units 2,679, ,264, ,760,010 7,183,745 Total Liabilities $ 3,087,895 $ 327,965,528 $ 323,608,881 $ 7,444,542 TAG FUND ASSETS Cash and cash equivalents $ 788,902 $ 791,898,452 $ 791,781,696 $ 905,658 Accounts Recievable 300,163 30,151,675 30,193, ,273 Total Assets $ 1,089,065 $ 822,050,127 $ 821,975,261 $ 1,163,931 LIABILITIES Accounts payable $ 143,788 $ 13,003,318 $ 12,965,253 $ 181,853 Due to other governmental units 945,277 76,628,527 76,591, ,078 Total Liabilities $ 1,089,065 $ 89,631,845 $ 89,556,979 $ 1,163,931 14

376 TAX COLLECTOR COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS YEAR ENDED SEPTEMBER 30, 2014 Balance Balance September 30, September 30, 2013 Additions Deductions 2014 Total Agency ASSETS Cash and cash equivalents $ 3,876,546 $ 1,078,393,701 $ 1,073,920,298 $ 8,349,949 Accounts Recievable 300,414 30,151,675 30,193, ,524 Total Assets $ 4,176,960 $ 1,108,545,376 $ 1,104,113,863 $ 8,608,473 LIABILITIES Accounts payable $ 552,650 $ 26,704,124 $ 26,814,124 $ 442,650 Due to other governmental units 3,624, ,893, ,351,736 8,165,823 Total Liabilities $ 4,176,960 $ 417,597,373 $ 413,165,860 $ 8,608,473 15

377 INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIALSTATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Janet Holley Tax Collector Escambia County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements (hereinafter referred to as financial statements ) of the general fund and aggregate remaining fund information of the Tax Collector of Escambia County, Florida (hereinafter referred to as Tax Collector ), as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Tax Collector s financial statements, and have issued our report thereon dated December 22, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Tax Collector s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Tax Collector s internal control. Accordingly, we do not express an opinion on the effectiveness of the Tax Collector s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Tax Collector s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 16

378 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this report is not suitable for any other purpose. December 22, 2014 Pensacola, Florida 17

379 INDEPENDENT ACCOUNTANTS REPORT ON COMPLIANCE REQUIREMENTS IN ACCORDANCE WITH CHAPTER , RULES OF THE AUDITOR GENERAL We have examined the Office of the Tax Collector of Escambia County, Florida s (hereinafter referred to as Tax Collector ) compliance with Florida Statute in regards to the investments for the year ended September 30, Management is responsible for the Tax Collector s compliance with those requirements. Our responsibility is to express an opinion on the Tax Collector s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Tax Collector s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Tax Collector s compliance with specified requirements. In our opinion, the Tax Collector complied, in all material respects, with the aforementioned requirements for the year ended September 30, December 22, 2014 Pensacola, Florida 18

380 MANAGEMENT LETTER Honorable Janet Holley Tax Collector Escambia County, Florida Report on the Financial Statements We have audited the financial statements (hereinafter referred to as financial statements ) of the general fund and the aggregate remaining fund information of the Office of the Tax Collector of Escambia County, Florida (hereinafter referred to as Tax Collector ), as of and for the year ended September 30, 2014, and the related notes to the financial statements, and have issued our report thereon dated December 22, Auditors Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter Rules of the Florida Auditor General. Other Reports and Schedule We have issued our Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountants Report on Compliance Requirements in Accordance with Chapter , Rules of the Auditor General. Disclosures in those reports, which are dated December 22, 2014, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. No recommendations were made in the preceding annual financial audit report. Other Matters Section (1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section (1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. 19

381 Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Tax Collector, Escambia County Board of County Commissioners, and applicable Management and is not intended to be and should not be used by anyone other than these specified parties. December 22, 2014 Pensacola, Florida 20

382 TAX COLLECTOR SCHEDULE OF FINDINGS AND RESPONSES September 30, 2014 There were no comments which require management s written response. 21

383