3. PLEDGE OF ALLEGIANCE TO THE FLAG

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1 crty OF BARTOW CITY COIVlIVlISSIOI\l REGULAR MEETING MONDAY, JUNE 4, 2018 AT 6:00 P.M. (EST) OR AS SOON THEREAFTER AS POSSIBLE CITY HALL COMMISSION CHAMBERS, 450 NORTH WILSON AVENUE, BARTOW, FL CALL TO ORDER AGENDA 2. II\IVOCATION - Pastor Shirley Hayes-Williams, St. James AIVIE Church 3. PLEDGE OF ALLEGIANCE TO THE FLAG 4. PROCLAMATIONS AND SPECIAL PRESENTATIONS 4.01 Proclamation recognizing June 13-16, 2018 as LGBTQ Pride Week. Krissy Lally, President of the Lakeland Youth Alliance and Kerri McCoy, President of PFLAG of Polk County will accept the proclamation on behalf of Polk Pride. 5. GEI\IERAL PUBLIC COIVIIVIENT - At this time, the Commission will receive comments from the public regarding matters not appearing on this agenda. 6. CITY ANNOUNCEMENTS 7. REPORTS OF CHARTER OFFICERS 7.01 City IVlanager Communications ~ Fiber/Smart Metering Pilot Project Area 7.02 City Attorney Communications 8. AGENDA MODIFICATION/APPROVAL 9. PUBLIC COMMENT ON AGENDA ITEMS - At this time, the Commission will receive comments from the public regarding matters that appear on this agenda, not otherwise scheduled for a separate Public Hearing. 10. HEARINGS - FIRST AI\lD SECOI\ID READINGS AI\lD PUBLIC HEARII\IGS PUBLIC HEARING AND CONSIDERATION OF A REQUEST BY KMT FARM AND TIMBER COMPANY, LLC, A FLORIDA LIMITED LIABILITY CORPORATION, AND TAMPA ELECTRIC COMPANY, A FLORIDA CORPORATION, TO ENTER INTO A DEVELOPMENT AGREEMENT WITH THE CITY OF BARTOW TO ALLOW A UT[LITY-OWNED RENEWABLE GENERATION SYSTEM (E.G. SOLAR FARM) ON APPROXIMATELY 358 ACRES OF PROPERTY CURRENTLY OWNED BY KMT FARM AND TIIVIBER COIVlPAI\lY, LLC, A FLORIDA LIMITED LIABILITY CORPORATION. THE SITE IS LOCATED 01\1 THE SOUTH SIDE OF SMITH

2 City Commission Regular Meeting Monday, June 4, 6:00 p.m. Page 2 of 2 LANE, WEST OF U.S. HIGHWAY 98 NORTH, AND EAST OF E.F. GRIFFIN ROAD, IN SECTIONS 24 AND 25, TOWNSHIP 29S, RANGE 24E, POLK COUNTY FLORIDA. THE PROPOSED SYSTEM WILL GENERATE UP TO 74.9 MEGAWATTS OF ELECTRIC POWER, AND HAVE A MAXIMUM HEIGHT OF 15, EXCEPT FOR THE MAST ARM APPARATUS (LIGHTING ROD) WHICH HAS A MAXIMUM HEIGHT OF 100. NO POPULATION DENSITIES ARE PROPOSED FIRST READING AND CONSIDERATION OF ORDINANCE NO AN ORDINANCE OF THE CITY OF BARTOW, FLORIDA, REPEALING ORDINANCE AND DISSOLVING A COMMUNITY DEVELOPMENT DISTRICT, KNOWN AS THE SADDLE CREEK COMMUNITY DEVELOPMENT DISTRICT, PURSUANT TO CHAPTER 189 OF THE FLORIDA STATUTES, PROVIDING FOR SEVERABILITY AND PROVIDING FOR AN EFFECTIVE DATE UPON FINAL PASSAGE. 11. CONSENT AGENDA Approval of May 21, 2018 City Commission Regular Meeting minutes Approval of City Commissioner absence(s) for May 21, 2018; excusal(s): Vice Mayor William Simpson. 12. OTHER COMMISSION BUSINESS OLD BUSINESS None NEW BUSINESS Approval to accept the Annual Audit as presented by Purvis Gray and Company Approval to appoint a Voting Delegate to the 92nd Annual Florida League of Cities Conference being held August 16 through August 18, 2018 at the Diplomat Beach Resort, Hollywood, FL. 13. RESOLUTIONS - None 14. COMMISSIONER COMMENTS JAMES F. CLEMENTS TRISH PFEIFFER SCOTT SJOBLOM WILLIAM BILLY SIMPSON LEO E. LONGWORTH 15. ADJOURNMENT Please be advised that if you desire to appeal from any decisions made as a result of the above hearing or meeting, you will need a record of the proceedings and in some cases a verbatim record is required. You must make your own arrangements to produce this record. (Florida Statute ). If you are a person with a disability who needs any accommodation in order to participate in this proceeding, you are entitled, at no cost to you, to the provision of certain assistance. Please contact the City Clerk s Office at 450 N. Wilson Avenue, P.O. Box 1069, Bartow, Florida or phone (863) within 2 working days of your receipt of this meeting notification; if you are hearing or voice impaired, call Posted at City Hall, Bartow Public Library, and the City s website on May 31, 2018.

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5 ~roclamatton WHEREAS, the City of Bartow, Florida, is part of the global community of diverse cultures, races, creeds, genders and sexual identities; and, WHEREAS, Lesbian, Gay, Bisexual, Transgender and Questioning (LGBTQ) individuals, residents, students, workers and business owners in the Greater Bartow Area contribute to the vibrant, innovative, diverse, and culturally-inclusive community; and, WHEREAS, various advancements have been made with respect to equal rights and protections for all people, including members of the LGBTQ community, throughout the State of Florida and the United States of America; and, WHEREAS, PFLAG of Polk County, a local LGBTQ advocacy group, envisions a world where diversity is celebrated and all people are respected, valued and affirmed regardless of sexual orientation, gender identity, or gender expression; and, WHEREAS, the Lakeland Youth Alliance provides a safe space for LGBTQ youth and their straight allies in the Greater Polk County Area and community; and, WHEREAS, in celebration of the richness and diversity of the City of Bartow, Polk County, and the State of Florida, PFLAG of Polk County and the Lakeland Youth Alliance, along with other community organizations, businesses and individuals will conduct various cultural, educational and entertainment activities June 13-16, 2018, to focus attention on the importance of acceptance and respect for diversity among us. NOW THEREFORE, I, Leo E. Longworth, by the authority vested in me as Mayor of the City of Bartow, Florida do hereby proclaim June 13-16, 2018, as: LGBTQ PRIDE WEEK in honor of freedom from prejudice and bias in any form, and in recognition of those members of our community who constantly fight the battle for equal treatment for all citizens regardless of sexual orientation, gender identity, gender expression, race, color, creed, ethnic origin, religion, age or disability. DATED at Bartow, Florida, this 4th day of June, CITY OF BARTOW ATrEST WITH SEAL: Mayor Leo E. Longworth City Clerk Jacqueline Poole

6 Case #DA / Silver PD Solar Development Agreement Planning Department Staff Report P & Z Hearing Date: May 14, 2018 City Commission Dates: June 4, 2018 GENERAL INFORMATION Request: Applicants: Owner: Location: Review and recommendation to the City Commission of a request to enter into a Development Agreement with the City of Bartow to allow a Utilityowned Renewable Generation System (e.g. Solar Farm) within the Silver Planned Development (PD). KMT Farm and Timber Company, LLC Tampa Electric Company, a Florida Corporation KMT Farm and Timber Company, LLC South side of Smith Lane, west of U.S. Highway 98 North, and east of E.F. Griffin Road, in Sections 24 and 25, Township 29S, Range 24E, Polk County Florida. Project Size: 358 acres (+/-) Approval Authority: Sections through , Florida Statutes, the Florida Local Government Development Agreement Act ("Act"), authorize the City to enter into binding development agreements with persons having a legal or equitable interest in real property located within the City. The Act authorizes local governance by ordinance to establish procedure and equitable requirements to consider and enter into development agreements, to encourage a stronger commitment to comprehensive and capital facilities planning, to ensure the provision of adequate public facilities for development, to encourage the efficient use of resources, to reduce the economic cost of development, and to provide certainty to developers in the approval of development and assurances that they may proceed in accordance with existing laws and policies subject to the conditions of such development agreements. Pursuant to Section of the Act, the City has adopted Section of the Uniform Land Development Code (ULDC), establishing procedures and requirements to consider and enter into development agreements and further sets forth the requirements and standards to be used in the application, approval, and implementation of development agreements. STAFF ANALYSIS: The Development Agreement ( Agreement ) was prepared and submitted (See Attached) by Bart Allen, Peterson & Myers, P.A., P.O. Box 7608, Winter Haven, Florida 33883, on behalf of KMT Farm and Timber Company, LLC and Tampa Electric Company, a Florida Corporation. It was prepared for the purpose of satisfying Condition of Approval #16(H) of the Amended Land

7 Case #DA / Silver PD Solar Development Agreement May 14, 2018 Page 2 of 3 Use Plan approved by the City Commission on January 2, 2018 and Policies 1.1.8(b) and 2.7.2(k) of the Comprehensive Plan Future Land Use Element which requires the incorporation of an Agreement to further the development interests of all parties when consideration is given to incorporating a Utility-owned Renewable Generation Systems (URGS) in this project. The Silver Planned Development (PD) was approved by the City in 2004 to accommodate the owner s desired to establish a project with a mix of uses that would provide for orderly, infillgrowth, consistent with established objectives and policies. It was subsequently amended in June 2006 to add 9.8 acres, revise the LUP and modify specific Conditions of Approval. In September 2008 it was again amended to modify a specific COA to reflect payment in lieu of site dedication for a fire station, allow senior living as permitted use in Land Bay 8 and reflect a new plan received date. A Preliminary Subdivision Plan was approved in February 2005 and the Development Review Committee approved the Phase I Construction Plans in January During this time the owner also transferred property title to the Polk County School Board for the construction of Spessard Holland Elementary School and the Polk County Board of County Commissioners for the construction of Smith Lane and associated stormwater retention areas. Physical construction within the project commenced in 2008 when the developer constructed a lift station in the northern portion of the project to accommodate the flows received from the new school and future flows from the balance of the project. In June 2015 the PD was again amended to include Institutional land uses as a permitted use; modify Conditions of Approval to reflect land use changes and alter the intensity of land uses throughout the development and adjust acreages to reflect the proposed development layout. The most recent amendment occurred in January 2018 when the City Commission approved the addition of Utility-owned Renewable Generation Systems (e.g. URGS) as a permitted use. Once this Development Agreement is finalized, TECO plans to construct a URGS on the property with a maximum capacity not exceed 74.9 MW (AC). The City s Planning Director and City Attorney have met with the project s representatives on many occasions since January 2018, to discuss the submittal. The DA addresses items such as land use compatibility, development timeframes, operating standards, system maintenance, length of service expectations, decommissioning timeframes, and site restoration. The DA is intended to last 20 years at which time it will expire. It may be extended by mutual consent of the parties, subject to the results of a public hearing. Public notice of the request was published in the local newspaper prior to the Planning and Zoning Commission and City Commission hearings. Seventy-one property owners were identified within the 500 notification radius and noticed of the request. IMPACT ANALYSIS The Agreement and the development authorized by its execution must be consistent with the City's Comprehensive Plan and Unified Land Development Code. Subject to the review and consideration given to Future Land Use Element Policies 1.1.8(b) and 2.7.2(k) and the Amended

8 Case #DA / Silver PD Solar Development Agreement May 14, 2018 Page 3 of 3 Land Use Plan approved by the City Commission on January 2, 2018, it is the Planning Department staff s opinion that these requirements have been satisfied. If approved the City will inspect the project at least once every 12 months to determine if there has been demonstrated good faith compliance with the terms of the development agreement. Each annual review shall be incorporated into a written report which shall be submitted to the parties to the agreement and the state land planning agency. The report shall be limited to the information sufficient to determine the extent to which the parties are proceeding in good faith to comply with the terms of the development agreement. If the City finds, on the basis of substantial competent evidence, that there has been a failure to comply with the terms of the development agreement, the agreement may be revoked or modified by the City. This request is consistent with and assists the City in meeting Strategic Planning Goal #1 Financially Sound, High Performing City Organization; Goal #3 - Diverse, Expanding Local Economy Increasing Community Prosperity and Wealth and; and Goal #5 - Redevelop and Grow the City. STAFF RECOMMENDATION The terms of the Development Agreement are consistent with the City s Comprehensive Plan and ULDC as they relate to the review and approval of the URGS. It is the Planning Department staff s opinion that the standards to approve this application as requested by the applicant have been satisfied and that the Planning and Zoning Commission may recommend approval of this request to the City Commission. PLANNING AND ZONING COMMISSION RECOMMENDATION At its meeting of May 14, 2018, the Planning and Zoning Commission voted to recommend approval of this application to the City Commission.

9 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT is made and entered into this day of February, 2018 (the Effective Date ), by and among KMT FARM AND TIMBER COMPANY LLC, a Delaware limited liability company, whose address is 1001 East Telecom Drive, Boca Raton, Florida (the Owner ), or its successor or assigns, and TAMPA ELECTRIC COMPANY, a Florida corporation, whose address is 702 North Franklin Street, Tampa, Florida ( TECO ), or its successor or assigns, and THE CITY OF BARTOW, a political subdivision of the State of Florida, whose address is 450 South Broadway Avenue, Bartow, Florida (the City ) pursuant to the authority of Sections , Florida Statutes (2017), the Florida Local Government Development Agreement Act (the Act ). WITNESSETH WHEREAS, the Act authorizes local governance by ordinance to establish procedure and equitable requirements to consider and enter into development agreements with any person having a legal or equitable interest in real property located within its jurisdiction, to encourage a stronger commitment to comprehensive and capital facilities planning, to ensure the provision of adequate public facilities for development, to encourage the efficient use of resources, to reduce the economic cost of development, and to provide certainty to developers in the approval of development and assurances that they may proceed in accordance with existing laws and policies subject to the conditions of such development agreements; WHEREAS, the Act provides that the local government s laws and policies governing the development of the land at the time of the execution of the Development Agreement shall govern the development of the land for the duration of the Development Agreement until and unless subsequently adopted laws and policies are applied to the Development Agreement, but only after a public hearing has been held and specific determinations made as provided for in such Act; WHEREAS, the City of Bartow Unified Land Development Code (the ULDC ) provides, or will provide, for certain materials and information to be included in and made part of the Development Agreement, and further sets forth the requirements and standards to be used in the application, approval, and implementation of the Development Agreement; WHEREAS, Owner is the owner in fee simple of the lands located south of Smith Lane, west of U.S. Highway 98 South, and east of E. F. Griffin Road, within Section 25, Township 29, Range 24 East, located within City s jurisdiction (the Property ); WHEREAS, the Property is subject to that certain planned development, the Silver Planned Development Amended Land Use Plan dated Received December 13, 2004, as amended April 19, 2006, June 26, 2008, February 23, 2015, and October 16, 2017 (the Silver PD ); WHEREAS, TECO desires to construct a Utility-owned Renewable Generation Systems (URGS) on the Property (the Development ); Page 1 of 13

10 WHEREAS, Owner, TECO, and City desire to enter into this Development Agreement to establish the respective rights of Owner, TECO, and City in accordance with the terms and conditions of this Development Agreement; and WHEREAS, the Development and the Development Agreement are consistent with the City of Bartow 2030 Comprehensive Plan (the Comp Plan ). NOW THEREFORE, in consideration of the mutual terms, covenants, and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is mutually agreed as follows: ARTICLE I RECITALS AND DEFINITIONS 1.1 Recitals. The foregoing recitals are incorporated herein by reference as if recited in full and serve as factual stipulation upon which the parties agree is the basis of this Development Agreement. 1.2 Definitions. The capitalized terms contained herein and not otherwise defined herein shall have the meanings assigned to them in the ULDC and Comp Plan. The terms herein, hereof, and hereunder and words of similar import shall be defined as set forth in the above recitals or as specified in the following paragraphs. ARTICLE II CONDITIONS OF DEVELOPMENT AGREEMENT 2.1 Legal Description of the Development. A Land Use Plan for the overall Silver Planned Unit Development (the LUP ) is attached as Exhibit A and a copy of the legal description for the area of the URGS project area is attached as Exhibit B, respectively. 2.2 Duration of Agreement. The Development Agreement shall terminate the later of twenty (20) years or as provided in Section (B) of the ULDC, as amended, from Commercial Operation Date of the facility. This Development Agreement may be extended by mutual consent of the parties, subject to a public hearing in accordance with the notice requirements of the ULDC and as allowed in Sections and , Florida Statutes. 2.3 Land Use Designation and Permitted Development Uses. The land use designation of the Development is a Planned Development with Single Family Residential, Multi- Family Residential, Commercial, and Institutional mixed uses. 2.4 Public Utilities Water and wastewater services are currently available from the City of Bartow Utilities to serve the Single Family Residential, Multi-Family Residential, Commercial, and Institutional aspects of the Development. Requests for service shall be made concurrent with subsequent site development approvals pursuant to applicable City codes and ordinances. Page 2 of 13

11 2.4.2 Prior to issuance building permits, TECO shall dedicate to the City of Bartow the necessary utility easement, not to exceed twenty (25 ) feet in width, to allow the construction of up to two (2) wastewater lines as part of the project site, to allow the extension of the existing wastewater facilities owned by the City of Bartow located along the western property line in the E. F. Griffin Road right-of-way to the eastern property line lying adjacent to U.S. Highway Satisfaction of Concurrency Requirements. Due to the limited impacts to infrastructure anticipated from URGS, the Development, will be developed in accordance with the applicable provisions of the Comp Plan, ULDC, and this Development Agreement, and is anticipated to satisfy the Transportation concurrency requirements, as described in the ULDC, Comp Plan, and Florida Statutes. 2.6 Development Permits. Owner shall be required to secure all applicable local development permits for any proposed construction of the Development on the Property. Owner shall also obtain all necessary City, region, state, and federal approvals in connection with the construction of the Development on the Property. 2.7 Consistency with City of Bartow Comprehensive Plan. This Development Agreement and the proposed Development are consistent with the Comp Plan and ULDC. 2.8 Insufficiency of Agreement. In the event that this Development Agreement fails to address a particular permit, condition, term, or restriction, Owner shall not be relieved of the necessity of complying with the law governing said permitting requirements, conditions, terms, or restrictions. 2.9 Compliance with Applicable Standards. Any public facility, including water, wastewater, or transportation facility, designed and constructed by Owner shall be in compliance with all applicable City standards and requirements, and applicable region, state, and federal standards and requirements Consistency with Florida Statutes. This Development Agreement meets the requirements of applicable Florida Statutes. ARTICLE III AGREEMENTS BY CITY AND OWNER Pursuant to the terms and conditions set forth in this Development Agreement, City and Owner hereby consent and agree as follows: 3.1 General Provisions Any and all existing approvals for the Development, as may be subsequently modified, and any conditions associated therewith, approved by City subsequent to this Development Agreement, shall remain in full force and effect during the term of this Agreement. Page 3 of 13

12 3.1.2 Development shall conform to the Silver PD and to the following conditions of approval. Development based upon this approval shall comply with all other applicable federal, state, and local laws, ordinances, and regulations, which are incorporated herein by reference, except to the extent the applicable laws, ordinances, and regulations are expressly waived or modified by these conditions, or by action approved by City Financial/Ad Valorem Tax Provisions TECO will commit to maintaining the ad valorem tax revenue at minimum as generated under the current exemption levels established Florida Legislature in the event the exemption is increased. This commitment shall continue throughout the period of time the Property is utilized as an URGS. 3.3 Land Development Provisions Utility-owned Renewable Generation Systems (URGS) are permitted only in areas designated for low density residential and Parcel 4 subject to the following: A. Ground-mounted URGS that generate less than 75 megawatts as provided in the Power Plant Siting Act ( PPSA ), Chapter Sections , may be permitted subject to the standards of the ULDC, as may be amended; B. The PD approval for the URGS shall expire shall expire 30 years from Commercial Operation Date of the facility or January 31, C. Within 30 days of the beginning of each calendar year, the TECO shall provide a report demonstrating the URGS was operational and the system meets TECO s requirements as an operational unit by the Florida Public Service Commission for the prior calendar year.; D. If TECO notifies the City that the URGS did not meet the operational unit status of the Florida Public Service Commission, TECO shall provide a Facility Recovery Plan within 60 days E. At the earlier of either (1) the expiration of approval of the URGS or (2) within one year from TECO s notification to the City that the URGS did not meet the operational unit status of the Florida Public Service Commission and TECO intends to decommission the facility, the property owner shall decommission the facility and remove all panels, poles, or other equipment from the property within 180 days.; F. Upon decommissioning the site, the Property shall revert to the residential development approvals shown on the Silver PD; and G. Any modification to the conditions for the URGS or the addition of land to the Silver PD shall require a major modification to the Silver PD which shall be approved by the City Commission for the City of Bartow. Page 4 of 13

13 3.3.2 Prior to construction plan approval for any portion of the Development, TECO shall dedicate sufficient right-of-way to facilitate future expansion needs for E. F. Griffin Road. Said right-of-way dedication shall be consistent with standards established by Polk County for collector roadways. KMT shall be responsible for all access improvements associated with the project s southern two entrances to US Highway 98 South. Improvements may include but not be limited to turn lanes, median improvements, and traffic control devices. All such improvements shall be permitted through the State Department of Transportation prior to approval of site construction plans that rely on individual access points to US Highway 98 South Roadways/driveways utilized for emergency access to E. F. Griffin Road shall be stabilized in a manner that will support City emergency rescue equipment. Details and specifications shall be reviewed and approved concurrent with construction plan review and approval The landscape berms and buffers required by the terms and conditions of the settlement agreement reached in Frost v. Silver Companies, et. al. shall be constructed concurrently with site development activities associated with the adjoining land bays. Specific planting and irrigation plans shall be provided either prior to or submitted concurrently with construction plan review and approval. City shall not be responsible for enforcing the terms and conditions of the settlement agreement reached in Frost v. Silver Companies, et. al., with regards to tree preservation, landscape installation, and maintenance Existing billboards on the KMT s Property shall be removed by KMT prior to the issuance of a certificate of completion for the first phase of residential construction Future roadway and multi-model improvements shall be consistent with the long range transportation plans of Polk County and City The development of a URGS does not impact the density or intensity of the Silver PD and the property retains its low density residential approvals. At such time as the URGS is decommissioned, the subject property shall be recognized as low density residential. 3.4 Operational Provisions The Development s URGS shall be installed in a manner which minimizes adverse impacts of the system through appropriate design, siting, and screening in order to accommodate the growing need for such systems, while promoting and encouraging the growth of alternative energy sources Development Standards. A. Height. The Development s URGS shall not exceed fifteen (15 ) feet, as measured from the finished grade of the site to the highest projection of the system or supporting structure. Page 5 of 13

14 B. Setbacks. The Development s URGS equipment, structures, and access roads shall be set back a minimum distance of twenty-five (25 ) feet from the boundary of the project site, unless otherwise required by Section hereof. The minimum setback shall be increased to accommodate a buffer yard consistent with Section of the ULDC. Stormwater management facilities and underground utility corridors may be located within the setback yard. C. Security Barrier and Signage. The Development s URGS shall be enclosed by a six (6 ) foot high security barrier, consisting of a fence, wall, or a combination of both, and include warning signage consistent with applicable industry standards. The security barrier shall be installed on the inside of required landscape and buffer areas. When adjacent to residentially designated property or public rights of way, the security barrier shall be black, green, or brown in color. D. Landscape Buffers. The perimeter of the Development s URGS shall include landscape buffers consistent with the requirements of (G) of the ULDC, except that it shall be installed on the outside of the security barrier. E. Access. Internal access roads shall be constructed in a manner that is consistent with the City s Infrastructure Development Standards, including the ability to utilize alternative paving methods. F. Interconnection. Connection to the transmission line shall be made to the closest available point and as close to the eastern boundary of the project area as commercially practicable Operation and Maintenance. A. The Development s URGS shall be maintained throughout its working life in a manner consistent with industry practices and standards. An annual operating report shall be submitted to the City in a format that is mutually agreed upon prior to the system being placed in service. B. TECO shall implement a repair/recovery plan within 90 days for system components that are damaged or otherwise cease to function.. If the system ceases to function properly or is abandoned for more than one hundred twenty (120) days, without a recovery plan as provided Paragraph (D), it shall be decommissioned and all components disposed of according to industry practices and standards and the development site shall be restored to the condition that existed immediately following the initial site clearing and grading. C. TECO shall prepare an Emergency Response Plan and work with the City to establish the appropriate procedures in the event the City is required to respond to an emergency situation at the URGS Decommissioning. Upon the end of the term of operations, unless terminated earlier or extended pursuant to the terms of this Agreement, Owner shall be responsible for the Page 6 of 13

15 decommissioning of the project. Decommission shall be completed within 180 days following the end of the term of operations. Decommissioning shall include the removal and disposal of all material and equipment from the development site in a manner consistent with industry standards and practices and the restoration of the site to the condition that existed immediately following the initial site clearing and grading. ARTICLE IV MISCELLANEOUS PROVISIONS 4.1 Notice. Owner, TECO, and the City hereby consent and agree to comply with all standards and requirements for notices and hearings concerning this Development Agreement, as set forth in Chapter 9 of the ULDC City. Notices to the City shall be provided as follows: Mayor City of Bartow 450 N. Wilson Ave. Bartow, Florida Attn: City Manage, City Planner, City Clerk Owner. Notices to Owner shall be provided as follows: KMT Farm & Timber Company LLC Attn: Larry D. Silver 1001 E. Telecom Dr. Boca Raton, Florida with a copy to: John B. Bart Allen Peterson & Myers, P.A. P.O. Box 7608 Winter Haven, Florida TECO. Notices to TECO shall be provided as follows: Tampa Electric Company Attn: General Counsel 702 N. Franklin St. Tampa, Florida Amendment or Cancellation. This Development Agreement may be amended or canceled by mutual written consent of the parties to this Development Agreement, or by their successors in interest, in accordance with the provisions of Section the ULDC. Page 7 of 13

16 4.3 Recordation. Pursuant to Section , Florida Statutes, within fourteen (14) days after City approves and executes this Development Agreement, the Owner shall record the Development Agreement in the public records of Polk County. Owner shall pay the costs of recording this Development Agreement. Within fourteen (14) days after this Development Agreement is recorded, City shall submit this Development Agreement to the Florida Department of Economic Opportunity. If this Development Agreement is amended, canceled, modified, extended, or revoked, the Clerk of the City shall record notice of such action in the public records of Polk County and such recorded notice shall be submitted by the Clerk to the Florida Department of Economic Opportunity. 4.4 Applicable Law, Enforcement, Jurisdiction, and Venue. This Development Agreement shall be subject to the following provisions: This Development Agreement and the rights and obligations of City, TECO, and Owner hereunder shall be interpreted, governed by, construed under, and enforced in accordance with the applicable laws of the State of Florida, and the Laws of City pursuant to the ULDC, Comp Plan, and City Utilities Code, and any amendments thereto in effect on the effective date of this agreement. This Agreement may be enforced as provided in Section , Florida Statutes Venue for any litigation pertaining to the subject matter hereof shall be exclusively in the state courts in and for Polk County, Florida, or Federal Court in the Middle District of Florida, located in Tampa, Florida If any section, phrase, sentence, or portion of this Development Agreement is, for any reason, held to be invalid by any court of competent jurisdiction, such portion shall be deemed as a separate, distinct, and independent provision, and such holding shall not affect the validity of the remaining portions hereof The fact that this Development Agreement does not detail all laws, rules, regulations, permits, conditions, terms, and restriction that must be satisfied to complete the Development shall not relieve the Owner, TECO, City, or their respective successors in interest, of the obligation to comply with the law governing such permit requirements, conditions, terms and regulations, except as otherwise provided herein. 4.5 Captions and Paragraph Headings. Captions and paragraph headings contained in this Development Agreement are for convenience and reference only, and in no way define, describe, extend, or limit the scope of intent of this Development Agreement, nor the intent of any provision hereof. 4.6 Merger. This Development Agreement constitutes the entire understanding of the parties and the parties agree that no representation was made by or on behalf of either that is not contained in this Development Agreement and that in entering into this Agreement neither relied upon, or was entitled to rely upon, any representation not herein specifically set forth. It Page 8 of 13

17 supersedes any prior understandings, agreements, or obligations between them upon the subjects covered in this Agreement. 4.7 Attachments. All attachments attached hereto contain additional terms of this Development Agreement and are incorporated herein by reference. 4.8 Counterparts. This Development Agreement may be executed in several counterparts, each constituting a duplicate original, but all such counterparts constituting one and same Development Agreement. 4.9 Successors and Assigns. This Agreement may be assigned by Owner or TECO, or its successors, subject to the written consent of the City, which consent shall not be unreasonably withheld Effective Date and Duration. This Agreement shall become effective after it has been recorded in the public records of Polk County and thirty (30) days after it is received by the Florida Department of Community Affairs (the "Effective Date"). This Development Agreement shall remain in effect for a period of thirty (30) years from the Effective Date, accordance with Section , Florida Statutes. The parties hereto further acknowledge that the Development Agreement may be further extended by mutual agreement of the parties and in accordance with the notice requirements of Sections through of the ULDC, and as allowed under Section , Florida Statutes. IN WITNESS WHEREOF, the parties hereto, through their duly authorized representatives, have executed this Development Agreement on the day(s) and year set forth below. [SIGNATURES ON FOLLOWING PAGES] Page 9 of 13

18 CITY SIGNATURE PAGE CITY: MAYOR, CITY OF BARTOW ATTEST: Jacqueline Poole, Clerk By: By: Date: Approved for Legal Sufficiency: By: City Attorney s Office Page 10 of 13

19 OWNER SIGNATURE PAGE OWNER: KMT FARM AND TIMBER COMPANY LLC, a Delaware limited liability company Print Name: Witness #1 Print Name: Witness #2 By: Silver Capital Advisors, Inc., a Delaware corporation, its Manager By: Larry D. Silver, its President Date: STATE OF FLORIDA CITY OF POLK The foregoing instrument was signed, sealed, delivered and acknowledged before me this day of February, 2018, by Larry D. Silver, as President of Silver Capital Advisors, Inc., a Delaware corporation, as the Manager of KMT FARM AND TIMBER COMPANY LLC, a Delaware limited liability company, on behalf of the company. Such person is personally known to me or produced as identification. (NOTARY SEAL) Notary Name: My Commission Expires:

20 TECO SIGNATURE PAGE TECO: TAMPA ELECTRIC COMPANY, a Florida corporation Print Name: Witness #1 By:, its Date: Print Name: Witness #2 STATE OF FLORIDA CITY OF POLK The foregoing instrument was signed, sealed, delivered and acknowledged before me this day of February, 2018, by, as of TAMPA ELECTRIC COMPANY, a Florida corporation, on behalf of the company. Such person is personally known to me or produced as identification. (NOTARY SEAL) Notary Name: My Commission Expires:

21 List of Attachments Exhibit A Exhibit B Land Use Plan of the Development Property Legal Description 13 of 13

22 EXHIBIT A Silver Planned Development Amended Land Use Plan

23 EXHIBIT B Silver PD Solar Legal Description PARCEL 1: A parcel of land being a portion of Sections 24 and 25, Township 29 South, Range 24 East and Section 30, Township 29 South, Range 25 East, all in Polk County, Florida, being described as follows: Commence at the Northwest corner of the Southeast 1/4 of the Northwest 1/4 of said Section 24; thence South 89 52'52" East, along the North line of said Southeast 1/4 of the Northwest 1/4, a distance of feet to the Westerly right-of-way line of State Road 700 (West. U.S. Highway 98); thence South 30 47'58" East, along said Westerly right-of-way line, feet to the Point of Beginning; thence South 30 51'26" East, along said Westerly right-of-way line, feet; thence South 40 30'10" West, feet; thence South 50 13'50" West, feet; thence South 23 00'19" East, feet to a point on a non-tangent curve to the left, having a radius of feet, a central angle of 32 06'50", a chord bearing of North 75 11'59" East, and a chord distance of feet; thence Easterly along the arc of said curve, feet to the point of tangency; thence North 59 08'34" East, feet to said Westerly rightof-way line; thence South 30 51'26" East, along said Westerly right-of-way line, feet; thence South 59 08'34" West, feet to the point of curvature of a curve to the right, having a radius of feet, a central angle of 23 45'25", a chord bearing of South 71 01'16" West, and a chord distance of feet; thence Westerly along the arc of said curve, feet; thence South 26 59'24" East, feet; thence South 76 22'18" East, feet; thence North 54 57'35" East, feet; thence North 72 09'18" East, feet to said Westerly right-of-way line; thence South 30 51'26" East, along said Westerly right-of-way line, feet; thence South 63 25'33" West, feet; thence South 28 20'44" West, feet; thence South 00 00'00" West, feet; thence South 89 45'58" East, feet to said Westerly right-of-way line; thence South 30 51'26" East, along said Westerly right-of-way line, feet to the North line of the South 1/2 of said Section 30; thence North 89 59'32" West, along said North line, feet to the East line of said Section 25; thence South 00 33'46" East, along said East line, feet to the South line of the North 1/2 of the Southeast 1/4 of the Southeast 1/4 of said Section 25; thence North 89 54'36" West, along said South line, feet to the West line of said North 1/2 of said Southeast 1/4 of the Southeast 1/4 of Section 25; thence North 00 34'02" West, along said West line, feet to the South line of the Northwest 1/4 of the Southeast 1/4 of said Section 25; thence North 89 51'47" West, along said South line, feet to the Southwest corner of said Northwest 1/4 of the Southeast 1/4 of Section 25; thence North 89 52'32" West, along the South line of the Northeast 1/4 of the Southwest 1/4 of said Section 25, a distance of feet; thence South 00 35'36" East, feet; thence North 89 58'14" West, feet; thence North 00 34'44" West, feet; thence North 89 52'13" West, feet to the East right-ofway line of E.F. Griffin Road; thence North 00 33'20" West, along said East right-of-way line, feet to the North line of the South 264 feet of the Northeast 1/4 of the Northwest 1/4 of said Section 25; thence South 89 40'28" East, along said South line, feet to the West line of the Northwest 1/4 of the Northeast 1/4 of said Section 25; thence North 00 34'19" West, along said West line, feet to the South line of the North 264 feet of said Northeast 1/4 of the Northwest 1/4 of Section 25; thence North 89 34'47" West, along said South line, feet to said East right-of-way line; thence North 00 33'20" West, along said East rightof-way line, feet to the North line of the North 264 feet of said Northeast 1/4 of the

24 Northwest 1/4 of said Section 25; thence South 89 34'47" East, along said North line, feet to the West line of the Southwest 1/4 of the Southeast 1/4 of said Section 24; thence North 00 29'51" West, along said West line, feet to the North line of said Southwest 1/4 of the Southeast 1/4 of Section 24; thence South 89 40'25" East, along said North line, feet to the Point of Beginning. LESS and EXCEPT that portion conveyed to Lakeland Regional Health Systems Inc. recorded in Official Records Book 9589, Page 2. PARCEL 2: A portion of the South 1/4 of the Southeast 1/4 of the Southwest 1/4 of Section 24, Township 29 South, Range 24, East, Polk County, Florida. PARCEL 3: A parcel of land being a portion of Section 25, Township 29 South, Range 24 East, Polk County, Florida, being described as follows: Commence at the Northwest corner of the Southeast 1/4 of the Northwest 1/4 of said Section 24; thence South 89 52'52" East, along the North line of said Southeast 1/4 of the Northwest 1/4, a distance of feet to the Westerly right-of-way line of State Road 700 (U.S. Highway 98); thence South 30 47'58" East, along said Westerly right-of-way line, feet; thence South 30 51'26 " East, along said Westerly right-of-way line, feet to the Point of Beginning; thence South 59 08'34" West, feet to the point of curvature of a curve to the right, having a radius of feet, a central angle of 23 45'25", a chord bearing of South 71 01'16" West, and a chord distance of feet; thence Westerly along the arc of said curve, feet; thence South 26 59'24" East, feet; thence South 76 22'18" East, feet; thence North 54 57'35" East, feet; thence North 72 09'18" East, to said Westerly right-of-way line, feet; thence North 30 51'26" West, along said Westerly right-of-way line, feet to the Point of Beginning. PARCEL 4: A parcel of land being a portion of Section 25, Township 29 South, Range 24 East and Section 30, Township 29 South, Range 25 East, all in Polk County, Florida, being described as follows: Commence at the Northwest corner of the Southeast 1/4 of the Northwest 1/4 of said Section 24; thence South 89 52'52" East, along the North line of said Southeast 1/4 of the Northwest 1/4, a distance of feet to the Westerly right-of-way line of State Road 700 (U.S. Highway 98); thence South 30 47'58" East, along said Westerly right-of-way line, feet; thence South 30 51'26" East, along said Westerly right-of-way line, feet to the Point of Beginning; thence South 63 25'33" West, feet; thence South 28 20'44" West, feet; thence South 00 00'00" West, feet; thence South 89 45'58" East, feet to said Westerly right-of-way line; thence North 30 51'26" West, along said Westerly rightof-way line, feet to the Point of Beginning. PARCEL 5: The North 1/2 of the Southwest 1/4 of the Southeast 1/4 and the Southeast 1/4 of the Southwest 1/4 of the Southeast 1/4 of Section 25, Township 29 South, Range 24 East, Polk County, Florida. PARCEL 6: The Southwest 1/4 of the Southwest 1/4 of the Southeast 1/4 of Section 25, Township 29 South, Range 24 East, Polk County, Florida. PARCEL 7: The East 25 acres of the Southeast 1/4 of the Southwest 1/4 of Section 25, Township 29 South, Range 24 East, Polk County, Florida; LESS AND EXCEPT the North 1040 feet of the West 535 feet thereof.

25 PARCEL 8: The North 1040 feet of the West 535 feet of the East 25 acres of the Southeast 1/4 of the Southwest 1/4 of Section 25, Township 29 South, Range 24 East, Polk County, Florida. PARCEL 9: A portion of the South 1/4 of the Southeast 1/4 of the Southwest 1/4 of Section 24, Township 29 South, Range 24, East, Polk County, Florida.

26 ORDINANCE NO AN ORDINANCE OF THE CITY OF BARTOW, FLORIDA, REPEALING ORDINANCE AND DISSOLVING A COMMUNITY DEVELOPMENT DISTRICT, KNOWN AS THE SADDLE CREEK COMMUNITY DEVELOPMENT DISTRICT, PURSUANT TO CHAPTER 189 OF THE FLORIDA STATUTES, PROVIDING FOR SEVERABILITY AND PROVIDING FOR AN EFFECTIVE DATE UPON FINAL PASSAGE. WHEREAS, the City of Bartow has previously adopted Ordinance , by which the Saddle Creek Development District (the District ) was created pursuant to the requirements of Chapter 190, Florida Statutes; and WHEREAS, the District has become inactive, it does not own any property, assets, or have any outstanding obligations, it has not issued any bonds, and it has not undertaken to construct any infrastructure projects. As such, the District s Board of Supervisors has unanimously adopted a Resolution formally declaring the District to be inactive pursuant to the requirements of section (1)(a)(6), Florida Statutes and transmitted the same to the Florida Department of Economic Opportunity ( DEO ); and WHEREAS, the DEO has followed the necessary statutory steps to declare the District to be inactive, including publication of a notice of intent to declare the District inactive, and no objections were received. Accordingly, on April 30, 2018, the DEO changed the District s status to inactive; and WHEREAS, the DEO notified the City of Bartow by letter of May 10, 2018 of this declaration and informed the City of the requirement to dissolve the District pursuant to the requirements of section (4), Florida Statutes, and provide documentation to the DEO of such action; NOW, THEREFORE, Be it enacted by the People of the City of Bartow: Section 1. Pursuant to the requirements of section (4), Florida Statutes, Ordinance Number is hereby repealed and the Saddle Creek Community Development District is accordingly hereby dissolved. 1

27 Section 2. To the extent that any references exist to the Saddle Creek Community Development District in the Code of Ordinances of the City of Bartow or the Unified Land Development Code of the City of Bartow after the effective date of this ordinance, all such references are hereby rendered null and void and may be stricken from such Codes. Section 3. If any provision or portion of this ordinance is declared by a court of competent jurisdiction to be void, unconstitutional, or unenforceable, then all remaining portions and provisions of this ordinance shall remain in full force and effect. Section 4. Any scrivener s error created as a result of the passage of this ordinance may be corrected by City of Bartow staff, without further legislative action, so long as the intent of this ordinance is preserved, by filing a revised copy thereof with the City Clerk s office with the terms Staff Revised and the revision version number in the style of the ordinance. Section 5. This ordinance shall take effect on June 18, 2018, immediately following final adoption by the City Commission. Upon final adoption, the City Clerk is directed to transmit documentation of the action of the City to the DEO. INTRODUCED AND PASSED on first reading at the Regular meeting of the City of Bartow City Commission held this day of June, PASSED AND ADOPTED on second reading at the Regular meeting of the City of Bartow City Commission held this day of June, ATTEST: CITY OF BARTOW: City Clerk Jacqueline Poole Approved as to correctness and form: Mayor Leo E. Longworth Approved as to substance: City Attorney Sean R. Parker City Manager George A. Long 2

28 Rick Scott GOVERNOR F LORIDA DEPARTMENT" ECONOMIC OPPORTUNITY May 10, 2018 ~5~Ft.d ~ S e.p~ ~a<.j~-; (!C.:c:!..D~'~ Cissy Proctor EXECUTIVE DIRECTOR OFFICE OF THE MAY 1 k CITY MA NAGE R The Honorable James F. Clements Mayor, City of Bartow 450 North Wilson Avenue Bartow, Florida Re: Declaration of Inactive Status of the Saddle Creek Community Development District Dear Mayor Clements: The Florida Department of Economic Opportunity (DEO) administers Chapter 189, Florida Statutes (the Uniform Special District Accountability Act). This act charges DEO's Special District Accountability Program with duties and responsibilities related to special districts, including declaring special districts inactive for dissolution under certain circumstances. The purpose of this letter is to notify you that the Saddle Creek Community Development District ("District"), an independent special district established by City of Bartow Ordinance , pursuant to Chapter 190, Florida Statutes, has become inactive and must be dissolved by the City Commission. In a letter dated March 5, 2018, (enclosed), Mr. Jonathan T. Johnson, the District's registered agent, notified DEO that pursuant to section (1 )(a)6., Florida Statutes, the District's Board of Supervisors unanimously adopted a resolution declaring the District inactive. When such notification occurs, section , Florida Statutes, requires DEO to declare the special district inactive. This process involves publishing a notice of proposed declaration of inactive status in a newspaper of general circulation in the county in which the special district is located, requiring any party objecting to the inactive status to file an objection pursuant to Chapter 120, Florida Statutes, within 21 days. On April 4, 2018, the District published the enclosed notice in The Ledger. On April 30, 2018, DEO determined that no objections were filed and changed the District's status from active to inactive. Section (4), Florida Statutes, requires the entity that created a special district declared inactive to dissolve the special district by repealing its enabling laws. Accordingly, please repeal City Ordinance , which established the District and provide documentation of that action to DEO. Florida Department,of Economic Opportunity I Caldwell Building I 107 E. Madison Street I Tallahassee, FL I I An equal opportunity employer/program. Auxiliary aids and service are available upon request to individuals with disabilities. All voice telephone numbers on this document may be reached by persons using TTY md equipment via the Florida Relay Service at 711.

29 The Honorable James F. Clements May 10,2018 Page 2 of 2 Thank you in advance for your assistance with this matter. If you have any questions, please contact Jack Gaskins Jr., at Sin erely, ~,~ Enclosures J~ es D. Stansbury, Chief Breau of Community Planning and Growth cc: Mr. Jonathan T. Johnson (via )

30 Hopping Green & Sams Attorneys and Counselors MAR 9 ZOIB March 5,2018 Department of Economic Opportunity Division of Community Development Special Districts Accountability Program 107 E. Madison Street, MSC-160 Tallahassee, Florida Attn: Mr. Jack Gaskins, Jr. RE: Saddle Creek Community Development District Dear Mr. Gaskins: I serve as the duly appointed registered agent of the Saddle Creek Community Development District ("District"). The purpose of this Jetter is to inform the Department of Economic Opportunity (the "Department") that the District's Board of Supervisors has adopted a resolution declaring that the District is inactive pursuant to section (1)(a)6., Florida Statutes. According to section , Florida Statutes, the Department shall declare a special district inactive after that district's governing body provides documentation that it has unanimously adopted a resolution declaring that the district is inactive, notice of the proposed inactive status has been published and a 21-day appeals period has passed without any appeal by a member of the public. A certified copy of Resolution declaring the Saddle Creek Conununity Development District inactive and a certified copy of the draft minutes of the February 27,2018, meeting of the Board of Supervisors of the District showing that the resolution was unanimously adopted are attached to this letter. Also attached is a draft Notice of Proposed Declaration of Inactive Status that we prepared on behalf of the majority landowner of the lands located within the District and will coordinate the publishing of once you determine the appropriate action with respect to this District. Once a district has been declared inactive section (3). Florida Statutes, requires that a notice of declaration of inactive status be sent to the chair of the governing body of the local general-purpose government that created that district. After it has been detennined that the district has no outstanding obligations, the entity that created the district must dissolve it by repealing its enabling laws or by other appropriate means. In this case, the District was established by the City Commission of the City of Bartow, Florida. The District does not have any property, assets or outstanding obligations, has not issued Post Offic.e Box 6526 Tallahassee, Florida S. Monroe Street, Suite 300 (32301) fax

31 Mr. Gaskins March Page20f2 any bonds, and has not undertaken to construct any infrastructure improvements. As the District's registered agent and on behalf of the majority landowner of the lands located within the District, I would respectfully request that. after the appropriate notice period, the Department declare the District inactive. the Mayor of the City of Bartow be notified that the District is inactive and the District be dissolved pursuant to section Florida Statutes. Should you require any additional information, please contact me at your convenience. I can be reached at (850) Enclosures Sincerely, d!~ Registered Agent & Attorneys and CounsalOlS

32 Certification 1, Jonathan T. Johnson, Registered Agent of th~ Saddle Creek Community Development District, do hereby certify that the attached is a true and correct copy of Resolution unanimously adopted by quorum of the Board of Supervisors for the Saddle Creek Community Development District at a duly noticed meeting on February 27, STATE OF FLORIDA COUNTY OF LEON th The instrument was acknowledged before me this 5 day of March, 2018, by Jonathan T. Johnson, who is personally known to me. Q) KAREN F. JUSEVlTCH!.: Corn mlsblon if FF I... TlNfIIII',..... ~ Explrel November 25, 2018 No.L-'~ _

33 RESOLUTION A RESOLUTION OF THE BOA-tID OF SlJPERVISORS OF THE SADDLE CREEK COMMUNITY DEVELOPMENT DISTIllCI' DECLARING THE SADDLE CREEl{ COMMUNITY DEVELOPMENT DiSTRICT INACTrVE; REQUESTING THAT THE FLORIDA DEPARTMENT OF ECONOMIC OPFORTIJNITY DECLARE THE SADDLE CREEK COMMUNITY DEVELOPMENT DISTRICT INACTIVE; DIRECTING DISTRICT COUNSEL TO TAKE APPROPRIATE ACTION TO OBTAll~ A DECLA-lU1T10N TIlAT THE SADDLE CREEK cor~ DEVELOPMENT DISTRICT IS INACTIVE AND TO DISSOLVE THE SADDLE CREEK COMl\tmNITY DEVELOPMENT DISTRICT IN ACCORD WITH FLORIDA LAW; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTiVE DATE. WHEREAS, the Saddle Creek Community Development District (the "District") was established by Ordinance No of the City Commission of the City of Bartow. Florida (the "Ordinance"). pursuant to Chapter 190, Florida Statutes; and WHEllEAS, the District is located wholly within the boundaries of the City of Bartow,: Florida (the "City"); and WHEREAS, the District operations are funded solely by KMT Farm and Timber Company, LLC, the landholder of the majority of all real property within. the District ("the Landowner"); and WHER.Ef..8, the District has not taken any actions regarding planned community development services for the lands located within the District and has not levied any special assessments against the assessable real property located within the District for the purposes of funding any-planned community development services; and WHEREAS, the District's Board of Supervisors has determined that based upon information provided to it by the Landowner, and the current economic conditions and the level, of improvements already completed within the District, the planned community development services to be provided to the lands within the boundaries of the District may be efficiently and effectively provided by-means other than by the District; and WHEREAS, the District, based upon the foregoing, does not anticipate engaging in community development activities for the foreseeable future; and 1- Page 1 of ~

34 WHEREAS, the District's Board of Supervisors finds that it is in the best interest of the District and the District's landowners that the District be declared inactive pursuant to Chapter (1), Florida Statutes; and WHEREAS, the tenninatlon of the District will not harm or otherwise injure any interests of the landowners of the District, nor harm nor otherwise injure any interests of any other party within or without the District; and WHEREAS, the District's Board of Supervisors fmds that it is in the best interest of the District and the District's landowners that the District be dissolved and that the planned coldjilunity development services be provided by means other than by the District; and WHEREAS, the District's Board of Supervisors desires that the Florida Department of Economic Opportunity declare the District inactive and send a notice of de.claration of inactive status to the Mayor of the City of Bartow and direct the City to dissolve the District by repealing the Ordinance or by. other appropriate means in accordance with Section , Florida Statutes. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE SADDLE CREEK COMMUNITY DEVELOPMENT DiSTRICT: SECTION 1. INCORPORATION OF WHEREAS CLAUSES. All of the above representations, findings. and determinations contained within the Whereas Clauses of this Resolution are recognized as true and accurate, and are expressly incorporated into this Resolution. SECTION 2. DECLARATION OF INACTIVITY. The District's Board of Supervisors hereby unanimously declares that the District is inactive pursuant to Section (1)(a)6. Florida Statutes. SECTION 3. REQUEST FOR ACTiON. The District hereby requests that the Department of Economic Opportunity declare the District inactive and send a notice of declaration of inactive status to the Mayor of the City of Bartow and direct the City to dissolve the District by repealing the Ordinance or by other appropriate means in accordance with Section , :pjoridastatutes. SECTION 4. DIRECTION TO DISTRICT COUNSEL. District Counsel is hereby directed to take the appropriate actions to transmit this Resolution to the Florida Department of Economic Opportunity, to publish the appropriate notice, and to take any other steps necessary to effectuate the orderjy termination of the District. SECTION 5. SEVERABILITY. The invalidity or unenforceability of anyone or more provisions of this Resolution shall not affect the Validity or enforceability of the remaining portions of this Resolution, or any part thereof. Page20f 3

35 SECTION 6. E..ii'FECTIVE DATE. This Resolution shall take effect immediately upon the passage and adoption of this Resolution by the Board of Supervisors of the Saddle Creek Community Development District. PASSED AND ADOPTED in public session this 27 th day of February, Secretaryl Assistant Secretar:Yi Page 3 of 3

36 April 10, 2018 Via Certified U.S. Mail Jonathan T. Johnson Hopping Green & Sams, P.A. 119 S. Monroe Street, Suite 300 Tallahru;see, Florida RE: Saddle Creek Community Development District Dear Mr. 10hnson: As the duly appointed registered agent of the Saddle Creek Community Development District (UDistrict"), the purpose of this leller is [0 provide you with a copy of the Notice of Proposed Declaration of inactive Status of 1he District as required by section (l)(b). Florida Statutes. Per the enclosed affidavit of publication. the notice was published in The Ledger on April 4, Should you require any additional infonnation, please contact me at your convenience. I can be rcached at (850) ' Sii/i Enclosure cc: Jack Gaskins. Dept. of Economic Opponunity L~n F. Juse J Paralegal

37 AFFIDAVIT OF PUBLICATION THE LEDGER Lakeland, Polk County, Florida STATE OF FLORIDA) COUNTY OF POLK) Before the undersigned authority personally appeared Leslie Colon, who on oath says that she is an Account Executive for Advertising at The Ledger, a daily newspaper published at Lakeland in Polk County, florida; thai the attached copy of advertisement, being 11 NOTICE OF DECLARATION in the matter of INACTrvE STATUS Concerning SADDLE CREEK end was published in said newspaper in the issues of 4 4; 1018 Affiant further says that said The Ledger is a newspaper published at Lakeland, in said Polk County. Florida, and that the said newspaper has heretofore been continuously published in said Polk County, Florida, daily, and has been entered as second class matter at the post office in Lakeland, in said Polk County, Florida, for a period of one year next preceding the first publication of the attached copy of advertisement; and affiant further says that she has neither paid nor promised any person, firm or corporation any discount, rebale, commission or refund for the purpose of securing this advertisement for publication in the said ne 'paper- n to and subscribed before me this 4th day of April, A.D Leslie Colon Advertising Account Executive Who is personally known to me. r~ Notary Public (Seal) PATRICIA ANN RouSE MY CO!.!'-IISS10N 1/ GO ~0311l2 EXPIRES: Ot.;!ober ndo<! t hru liola1y Publk U~d~lW!Ittrt

38 ORDINANCE NO AN ORDINANCE OF THE CITY OF BARTOW, FLORIDA, ESTABLISHING A COMMUNITY DEVELOPMENT DISTRICT, TO BE KNOWN AS THE SADDLE CREEK COMMUNITY DEVELOPMENT DISTRICT, PURSUANT TO CHAPTER 190, FLORIDA STATUTES; NAMING THE DISTRICT; DESCRIBING THE EXTERNAL BOUNDARIES OF THE DISTRICT; DESCRIBING THE FUNCTIONS AND POWERS OF THE DISTRICT; DESIGNATING FIVE PERSONS TO SERVE AS THE INITJAL MEMBERS OF THE DISTRICT'S BOARD OF SUPERVISORS; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE UPON FINAL PASSAGE. ) Whereas, Bartow 98 Development Corporation ("Petitioner"), having obtained written consent to the establishment of the Saddle Creek Development District (the "District") by the owners of one-hundred percent (100%) of the real property to be includ.ed in the District, petitioned the City Commission (the "City Commission") of the City of Bartow, Florida (the "City"), to adopt an ordinance establishing the District pursuant to Chapter 190, Florida Statues; and Whereas, the Petitioner is a corporation authorized to conduct business in the State of Florida whose address is 1001 East Telecom Drive, Boca Raton, FL 33431, and Whereas, all interested persons and affected units of general-purpose local government were afforded an opportunity to present oral and written corn.trients on the petition at a duly noticed public hearing conducted by the City Commission on March 5, 2007, and Whereas, upon consideration of the record established at that hearing, the City Commission determined that the statements within the Petition are true and correct, that the establishment of the District is not inconsistent with any applicable element or portion of the state comprehensive plan or the City's comprehensive plan, that the land within the District is of

39 sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as a functionally interrelated community, that the District is the best alternative available for delivering community development services and facilities to the area that win be served by the District, that the community development services and facilities of the District wi1l not be incompatible with the capacity and uses of existing local and regional community development services and facilities, and that the area that win be served by the District is amendable to separate special-district governance, and Whereas, the establishment ofthe District shall not act to amend any land development approvals and/or regulations governing the land area to be included within the District, and Whereas, the establishment of the District will constitute a timely, efficient, effective, responsive and economic way to deliver community development services in the area described in the petition, and Whereas, the City Commission has determined that the initial members ofthe District's Board of Supervisors set forth in Section 6 of this ordinance are residents of the State of Florida and citizens of the United States of America. NOW, THEREFORE, BE IT ENACTED BY THE CITY COMMISSION OF THE CITY OF BARTOW, FLORIDA: Section 1. Authority. This ordinance is adopted in compliance with and pursuant to the Uniform Community Development District Act of 1980 codified in Chapter 190, Florida Statutes. Section 2. District Name. There is hereby created a community development district situated entirely within the City of Bartow, Florida, which shall be known as the "Saddle Creek

40 Community Development District", and which shall be referred to in this ordinance as the "District". Section 3. District External Boundaries. The external boundaries of the District are described in Appendix A attached hereto, said boundaries encompassing areas, more or less. Section 4. District External Boundaries. The powers and functions of the District are described in Chapter 190, Florida Statutes. Consent is hereby given to the District's Board of Supervisors to plan, establish, acquire, construct or reconstruct, enlarge or extend, equip, operate, and maintain systems and facilities described and authorized by Section (2) (a) (d). Notwithstanding the foregoing, the adoption and passage of this Ordinance approving the Petition for the establishment of a Community Development District shall not be construed to delegate, authorize, or in any way consent to the Community Development District (District) established hereunder to engage in the ownership and operation of a water and/or wastewater facility(s) which would allow the District to engage in the wholesale or retail sale of water, wastewater and/or, re~use water services, or provide garbage services and/or any other municipal services absent the express written consent and/or agreement of the City. Section 5. Termination of District. In the event that the Community Development District established hereunder is terminated for any reason, the City shall in no way be required to accept ownership and/or the maintenance responsibility for the road rights of way, stormwater management and drainage systems and street lighting that are necessary for the development in the District without the City's express written consent. In the event oftermination, the District shall be responsible for ensuring the transfer of such ownership and maintenance responsibilities to an appropriate entity other than the City as authorized by law.

41 Section 6. Board of Supervisors. The five persons designated to serve as initial members of the District's Board of Supervisors are as follows: Jesse Holshouser 2101 Oakmont Terrace Coral Springs, FL Neil Carson 2593 Hampton Circle South Delray Beach, FL Marvin Bolinger 6161 Via Venetia North Delray Beach, FL Dennis Weiss 4208 Tuscany Way Boynton Beach, FL Marvin Satisky Northway Circle Boca Raton, FL Section 7. Severability. Ifany provision of this ordinance, or the application thereo( is finally determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such provision shall be deemed to be severable and the remaining provisions shall continue in full force and effect provided that the invalid, illegal or unenforceable provision is not material to the logical and intended interpretation of this ordinance. Section 8. After passage on first reading, at least three correct copies of this Ordinance in the form in which it has been passed on first reading shall be made available for public inspection in the office of the City Clerk, and there shall be published in the Polk County Democrat, a newspaper published and of general circulation in the City of Bartow, a notice describing this Ordinance in brief and general terms and stating that it is available for public inspection in the office of the City Clerk, together with the time and place, when and where it will be considered for final passage. Such publication shall be at least ten days prior to the time advertised. Section 9. After final passage, there shall be published in the Polk County Democrat, a newspaper published and of general circulation in the City of Bartow, a notice describing this

42 Ordinance in brief and general tenus and stating that it is available for public inspection in the office of the City Clerk, and this Ordinance shall take effect upon final passage. PASSED ON FIRST READING_--"'M... a... r... c.u.h-..l.5-1-'_2"-0,...,0... 7"-- PASSED AND ENACTED ON SECOND READING March 19, 2007 ATTEST WITH SEAL: CITY OF BARTOW By: L~ ( MayorRosi~ Approved as to correctness an

43 DESC RIPTIOI\: A parcel of land being a portion of Sections 24 and 25, Township 29 South, Range 24 East and Section 30, Township 29 South, Range 25 East, all in Polk County, Florida, being described as follows: Commence at the northwest corner of the Southeast 1/4 of the Northwest 1/4 of said Section 24; thence South 89' 52'52" East. along the north line of said Southeast 1/4 of the Northwest 1/4, a distance of feet to the westerly right-of-way line of State Rood 700 (U.S. Highway 98); thence South 30' 47'58" East, along soid westerly right-of-way line, feet to the Point of Beginning; thence continue South 30' 47'58" East, along soid westerly right-of- way line, feet; thence South 30' 51'26" East, along said westerly rightof-way line, feet; thence South 40' 30'10" West, feet; thence South 50' 13'50" West, feet; thence South 23' 00'19" East, feet to a point on a non-tangent curve to the left hoving a radius of feet, a central angle of 32' 06'50", a chord bearing of North 75' 11'59" East, and a chord distance of feet; thence easterly along the arc of said curve feet to the Point of Tangency; thence North 59' 08'34" East, feet to said westerly right-of-way line; thence South 30' 51'26" Eost, along said westerly right-of-way line, feet; thence South 59' 08'34" West, feet to the Point of Curvature of a curve to the right having a radius of feet, a central angle of 23' 45'25", a chord bearing of South 71' 01'16" West, and a chord distance of feet; thence westerly olong the arc of soid curve feet; thence South 26' 59'24" Eost feet; thence South 76' 22'1 East, feet; thence North 54' 57'35" East, feet; thence North 71' 09'18" East, feet to said westerly right-of-way line; thence South 30' 51'26" Eost, along soid westerly right-of-woy line, feet; thence South 63' 25'33" West, feet; thence South 28' 20'44" West, feet; thence South 00' 00'00" West, feet; thence South 89' 45'58" East, feet to said westerly right-ot-way line; thence South 30' 51'26" Eost, along soid westerly right-of-way line, feet; thence North 89' 59 West feet to the east line of said Section 25; thence South 00' 33'46" East, along soid east line, feet; thence North 89' 54'36" West feet to the west line of the Southeast 1/4 of the Southeast 1/4 of said Section 25; thence South 00' 33'52" East, along said west line, feet to the south line of said Section thence North 89' 57'09" West, along soid south line, feet; thence North 89' 59'12" West, feet to the west line of a parcel recorded in Official Records Book 5466, Poge 1049, Public Records of Polk County, Florida; thence North 00' 34'42" West, olong said west line, feet; thence North 89' 58'14" West, feet; thence North 00' 34'44" West, feet; thence North 89' 52'1 West, feet to the eost right-or-way line of E.F. Griffin Rood; thence North

44 00' 33'20" West, along said east right-of-way line, feet; thence South 89' 40'28" East, feet; thence North 00' 34'19" West, feet; thence North 89' 34'47" West, feet to said east right-of-way line; thence North 00' 33'20" West, along said east right-of- way line, feet; thence North 00' 32'09" West, along said east right-of-way line, feet to the north line of said Section 25; thence South 89' 35'50" East, along said north line, feet; thence North 00' 29'51" West, feet; thence North 89' 40'27" West, feet to said east right-of-way line; thence North 00' 32'08" West, along said east right-of-way line, feet; thence South 89' 34'47" East feet to the Point of Curvature of a curve to the right having a radius of feet, a central angle of 19' 23'06", a chord bearing of South 79' 53'14" East, and a chord distance of feet; thence easterl y along the arc of said curve feet to the Point of Tangency; thence South 70' 11'41" East, feet to the Point of Curvature of a curve to the left having a radius of feet, a central angle of 27" 07'06", a chord bearing of South 83' 45'14" East, and a chord distance of feet; thence easterly along the arc of said curve feet to a point on a nontangent curve to the left having a radius of feet, a central angle of 81' 58'11", a chord bearing of South 38' 53'11" West, and a chord distance of feet; thence southwesterly along the orc of said curve feet to the Point of Tangency; thence South 02' 05'54" East, feet to the Point of Curvature of a curve to the left having a radius of feet, a central angle of 50' 22'20", a chord bearing of South 27' 17'04" East, and a chord distance of feet; thence southeasterly along the arc of said curve feet to the Point of Tangency; thence South 52' 28'14" East, feet to the Point of Curvature of a curve to the right having a radius of feet, a central angle of 29' 34'38", a chord bearing of South 37" 40'55" East, and a chord distance of feet; thence southeasterly along the arc of said curve feet; thence North 58' 29'05" East, feet to the Point of Beginning. Said parcel containing acres, more or less.

45 CITY OF BARTOW CITY COMMISSION REGULAR MEETING MONDAY, MAY 21, 2018, 6:00 P.M. (EST) CITY HALL COMMISSION CHAMBERS, 450 N. WILSON AVE., BARTOW, FL33830 MINUTES The City Commission of the City of Bartow met in a Regular Meeting on Monday, May 21, 2018, at 6:00 p.m. in the Commission Chambers located at City Hall, 450 N. Wilson Avenue, Bartow, FL Notice of this meeting was posted at City Hall, Bartow Public Library and on the City's website on May 4, CALL TO ORDER Mayor Longworth called the meeting to order at 6:00 p.m. He noted that Vice Mayor Simpson was in the hospital and wished him a speedy recovery. Mayor Longworth dispensed with the roll call attendance was as follows: Commissioners Present: Commissioner James F. Clements Commissioner Trish Pfeiffer Commissioner Scott Sjoblom Mayor Leo E. Longworth Commissioners Absent: Vice Mayor William "Billy" Simpson Staff IVlembers Present: City IVlanager George Long City Attorney Sean Parker Planning Director Bob Wiegers City Clerk Jacqueline Poole 2. INVOCATION Pastor Jim Hatch, First Presbyterian Church of Bartow gave invocation. 3. PLEDGE OF ALLEGIANCE TO THE FLAG The Commissioners and audience gave the Pledge of Allegiance to the Flag. 4. PROCLAMATIONS AND SPECIAL PRESENTATIONS 5.01 Issuance of proclamation recognizing May 2018 as Teen Pregnancy Prevention Month. Being accepted by Ray Clay, TPP Youth Program

46 City Commission Regular Meeting Minutes Monday, May 21, 2018 at 6:00 p.m. Page 2 of 6 Specialist, Healthy Start Coalition of Highlands, Hardee and Polk Counties. City Attorney Parker read the proclamation in its entirety. Mayor Longworth presented it to TPP Youth Program Specialist, Mr. Ray Clay. He commended the Healthy Start Coalition for its program and bringing teen pregnancy prevention awareness to the community. Mr. Clay thanked the City for proclaiming Mayas Teen Pregnancy Awareness Month. He said even though the rate of teen pregnancy is decreasing that much work still needs to be done. He revealed that the Annual Teen Summit on May 1th had 166 teen participants who learned about themselves and about prevention of teen pregnancy Issuance of proclamation recognizing May 20-26, 2018 as Public Works Week. Being accepted by Bartow Public Works Director Russ Martin. City Attorney Parker read the proclamation in its entirety. Mayor Longworth presented it to Public Works Director Russ Martin. Mayor Longworth stated that Public Works does a great job and thanked them for all they do for the community. He stated that the Commission is honored to proclaim May as Public Works Week Issuance of proclamation recognizing May 20-26, 2018 as Municipal Clerk's Week. Being accepted by Bartow City Clerk Jacgueline Poole. City Attorney Parker read the proclamation in its entirety. Mayor Longworth presented it to City Clerk Jacqueline Poole. Mayor Longworth stated like all employees of Bartow that the City Clerk's Office is dedicated and committed to excellence. He stated that all the Commissioners work often with the City Clerk's Office. He said the City Clerk's Office is also very involved in the local and state municipal clerk's associations. 5. GENERAL PUBLIC COMMENT - At this time, the Commission received comments from the public regarding matters not appearing on this agenda. City Attorney Parker reminded all public speakers addressing the City Commission during anytime set aside for public comment to please refrain from making any personal attacks, derogatory comments, commenting on any items under litigation or under investigation, or any other matters that do not fall within the purview of the City Commission. In addition, please fill out a speaker card and give to the City Clerk when you proceed to the podium. Please state your name and address before you begin your remarks.

47 City Commission Regular Meeting Minutes Monday, May 21, 2018 at 6:00 p.m. Page 3 of 6 Mayor Longworth opened the general public comment period. Gerald J. Cochran, 1615 North St., Bartow. Mr. Cochran commented that nothing has changed at Mary Holland Park. He stated that the pavilions need more tables, there was standing water, some trees stumps sticking out of the ground, and fire ants are still present. He said he should not have to report it every single year. He said is a disgrace, that many people use that park. He said the park is a disgrace compared to the golf course. He also said there should not be a fee to use the pavilions at the park. With no further comments, Mayor Longworth closed the public comment period. 6. CITY ANNOUNCEMENTS Commissioner Pfeiffer announced that she would postpone her town hall meeting until the fall. 7. REPORTS OF CHARTER OFFICERS 7.01 City Manager Communications City Manager Long reported on the most recently published FI"lEA survey on electric rates. He said April was the first month under the City's rate reduction. The data reflected that Bartow had the overall lowest cost in the state for the month of April (A copy of the report is attached therein and is described as Exhibit A) City Attorney Communications City Attorney Parker gave an update on the PRWCjSWFWrvlD permit issuance situation. He said the City has engaged the services of Attorney Ralph DeMeo and his associate. He stated that as of 3:00 p.m., May 21, 2018 the following entities have filed petitions to challenge the permit issuance with the SWFWMD office - PRWC, Polk County, Winter Haven, Bartow, Ft. Meade, Lakeland and Wauchula. The district will review the petitions to see if they substantially comply with the filing requirements and will evaluate on their own if the petitions have a standing. He said that there is some consensus between the attorney's involved that SWFWMD may reject that standing issue, which then would trigger a series of events if they were to deny the standing of any of the petitioners. It would then possibly be assigned to administrative law judge for an administrative hearing. He said all the petitions might be consolidated into one matter. He said there is a conference call scheduled Thursday for all the attorneys involved to discuss a common interest agreement to work together. City Manager Long added that because there is a cost associated with the petition, during the PRWC board meeting last week there was a discussion on how that cost would be allocated among the PRWC members. He said the board collectively

48 City Commission Regular Meeting Minutes Monday, May 21, 2018 at 6:00 p.m. Page 4 of6 decided to attach responsibility for putting together a recommendation and bringing it back to the board for review. 8. AGENDA MODIFICATION/APPROVAL MOTION was made by Commissioner Clements, seconded by Commissioner Pfeiffer to approve the agenda as published. VOTE TO THE MOTION WAS AS FOLLOWS: AYE: Clements, Pfeiffer, Sjoblom, Longworth NAY: None Motion carried. 9. PUBLIC COMMENT ON AGENDA ITEMS - At this time, the City Commission received comments from the public regarding any matters on this agenda, not otherwise scheduled for a separate Public Hearing. Mayor Longworth opened the Public Comment period for items on the agenda that are not scheduled for a public hearing. With no comments l Mayor Longworth closed the public comment period. 10. PUBLIC HEARINGS - FIRST AND SECOND READINGS - None 11. CONSENT AGENDA Approval of May 7, 2018 City Commission Regular Meeting minutes Approval to appoint Lenora Peterson to the Beautification Advisory Board. The term will expire May Approval of City Commissioner absence(s) for May 7, 2018; excusal(s): none. MOTION was made by Commissioner Clements, seconded by Commissioner Pfeiffer to approve the Consent Agenda as presented. Commissioner Clements said the City appreciates the years of service that Ms. Peterson has given during her time on the Beautification Advisory Board as well as her service to the community. VOTE TO THE MOTION WAS AS FOLLOWS:

49 City Commission Regular Meeting Minutes Monday, May 21, 2018 at 6:00 p.m. Page 5 of 6 AYE: Clements, Pfeiffer, Sjoblom, Longworth NAY: None Motion carried. 12. OTHER COMMISSION BUSINESS OLD BUSINESS - None NEW BUSINESS - None 13. RESOLUTIONS - None 14. COMMISSIONER COMMENTS COMMISSIONER CLEMENTS Commissioner Clements said as the Alternate to PRWC board he filled in for Commissioner Simpson last week. He said it was amazing to him that the City has to spend money on the SWFWMD issue, even though he knows it is necessary. He said there are laws in place about water consumption by coastal counties to the detriment of interior counties. He felt that SWFWMD approved the permit in a sneaky way that the interior counties were not notified until it happened. He said now the cities have to hire attorneys to intercede for their communities and make sure that resource is not taken away from us for the next fifty years. Commissioner Clements announced that the Youth Villa Luncheon was Wednesday, May 23, 2018 at the Bartow Civic Center. Tickets are on sale for $10. CommiSSioner Clements reminded everyone that Memorial Day is May 28, He said it was a time to reflect the Fallen Heroes of the community. Commissioner Clements mentioned that the Youth Villa received a $100K grant from Sheriff Grady Judd for a transition cottage. He said this would allow the youth to stay and get support as long as they stay in school. He applauded Sheriff Judd COMMISSIONER PFEIFFER Commissioner Pfeiffer thanked BPD for their efforts in trying to find a suspect for the case involving the disturbed grave at Palm Cemetery. She said she has spoken with the family and said they have been touched by the outpouring care and concern from the community. She said she hopes that the City can one day assume that cemetery. She also said she would like improvements made at all Bartow cemeteries.

50 City Commission Regular Meeting Minutes Monday, May 21, 2018 at 6:00 p.m. Page 6 of COMMISSIONER SJOBLOM Commissioner Sjoblom wished Vice Mayor Simpson a speedy recovery. He also pointed out the Rev. Stephens was in the audience tonight. He said he had the pleasure of attending Rev. Stephens' one-year anniversary with Mt. Gilboa Church. He thanked him for his spiritual investment in the community VICE MAYOR SIMPSON Vice Mayor Simpson was absent MAYOR LONGWORTH Mayor Longworth had no further comments. 15. ADJOURNMENT With no further business to discuss, Mayor Longworth adjourned the meeting at 6:54 p.m. ATTEST: Mayor Leo E. Longworth City Clerk Jacqueline Poole (seal)

51 G Purvis ray&. C_om_Qa~ COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE The Honorable Mayor and Members of the City Commission City of Bartow Bartow, Florida This letter is being written in compliance with the AICPA 's Statement on Auditing Standards No. 114, "The Auditor's Communication with Those Charged with Governance." It is intended to be a detailed "report" of the audit results, and includes the matters generally of interest to audit committees. Because you do not have an audit committee, it is presented to your Governing Board. Findings and comments in this letter, unless otherwise noted, did not reach the level where they were required to be reported in the management letter, or in the report on internal control and/or compliance. We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Bartow, Florida (the City), for the year ended September 30, Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter to you dated September 15, Professional standards also require that we communicate to you the following information related to our audit. QuaJitative Aspects of Accounting Practices Accounting Policies Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. The following accounting pronouncement was adopted during 2017: Governmental Accounting Standards Board Statement No. 75, Accounting and Financial Reportingfor Postemployment Benefits Other Than Pensions. This Statement requires, for the first time, that employers report the Other Post Employment Benefit Plan (OPEB) liability and related deferred inflows/outflows, on their statements of net position. In connection with the implementation of this standard, the City decreased its beginning net position by $11,570,393 which is disclosed in Note 14. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Certified Public Accountants P.O. Box ' 222 N.E. Is! Street Cainesville, Florida ' (352j : FAX (352) 37B 2505 Laurt'l Ridge Professional Center' 2347 S.t:. 17th Stice! Ocala, Florida (352) fax (352) East College,\venue Tallahass(>Ic~, Florida (850l FAX (850) Lakewood Ranch Blvd. N., Suite 101 Sarasota, florida ( fax (941) ,\\L\\ll[RS or 'I'\\[~ICAN N,,1l F~ORIDA INSr!TU res or CERTIfIED l'ufluc MlMllm or,imlrlc,\n ['--:STITl'TL ur n~flnrd PUBLIC,\CCOUN1ANTS PRIv"IT[ COW'ANI[, ANIl 'X.C 1%ICTlI.T,[CIION,

52 The Honorable Mayor and Members of the City Commission City of Bartow Bartow, Florida Qualitative Aspects of Accounting Practices (Continued) Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates may be particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City's financial statements were: Unbilled Revenue-The unbilled utility revenue calculation is based on the number of days from the last meter read date in the year through year-end, times the subsequent month's billing. The balance at September 30, 2017, is $2,241,905 and is included in the accounts receivable in the Electric, Sanitation, Water, and Wastewater Funds (Note I.D). Accounts and Notes Receivable-Accounts and notes receivable are reduced by an allowance for uncollectible accounts, where appropriate. In governmental funds, in 2017, the entire balance of code enforcement fines receivable ($393,277) has been offset by an allowance for uncollectibles because the realizable value cannot be reasonably estimated. In the enterprise funds, the allowance for uncollectible utility accounts receivable ($37,577) is based on one-twelfth ofthe current year's actual write-offs plus the over 120-day delinquent receivables. In addition, an allowance of$351,033 in the enterprise funds offsets certain stormwater fees receivable being disputed by several governmental entities. Finally, certain notes receivable in the Community Redevelopment Agency (CRA), totaling $420,640, have been partially offset by an allowance for uncollectibles of $418,140 because the notes can be forgiven if certain conditions are met (and they are expected to be met) (Note I.D). Depreciation-The City uses straight-line depreciation and industry guidelines for useful lives. Depreciation expense totaled $6,042,790 for 2017, and accumulated depreciation was $116,102,171 at September 30, 2017 (Note 6). Self-Insured Workers' Compensation Accrual-The City's accrued claims (known and unknown) at September 30, 2017, were $685,814 (Note 12), and were based on an actuarial study conducted by Casualty Actuarial Consultants, Inc., dated December 22, The number is the consultant's "estimated required reserves" at September 30,2017, per Table 8, section B of their report. Please see the report for the significant assumptions that went into the development of that figure. Accrued Compensated Absences-The City'S liability for accrued compensated absences is $2,209,743 at September 30,2017 (Note 7). The portion that represents earned but unused vacation and compensatory time is accrued based on the number of hours accumulated by each employee times their year-end pay rate, and including estimated payroll taxes. The accrual for compensated absences also includes a component for sick leave, which is paid at termination only under certain circumstances, and in varying percentages based on length of employment. Fair Values-Fair values for all City and Pension Fund investments were based on readily-available market quotes. 2

53 The Honorable Mayor and Members of the City Commission City of Battow Bartow, Florida Qualitative Aspects of Accounting Practices (Concluded) Accounting Estimates (Concluded) Pension Lia bilities-the City has three pension plans and under Governmental Accounting Standards Board Statement No. 68, management has accrued a net pension liability ($14,773,804), related deferred outflows ($5,822,667), and deferred inflows ($541,343), all of which were determined by separate actuarial valuations of each plan performed as of October 1, 2016, by Foster & Foster, Inc. The actuary used a measurement date of September 30, 2016, for the City's reporting date of September 30, 2017, as pennitted under Governmental Accounting Standards Board Statement No. 71. These balances, as well as certain pension disclosures and required supplementary information, are based on actuarial assumptions which, if changed, could significantly affect the reported or disclosed atllounts (Note 9). OPEB-The unfunded accrued actuarial liability for OPEB at September 30,2017, was $26,522,732, as determined by an actuarial report prepared by Foster & Foster, Inc., as of October 1,2016, (the latest valuation). The 2017 OPEB expense was $2,405,477 and the deferred outflows of resources at September 30,2017, was $2,714,315 (Note 10). There are significant underlying assumptions in the actuarial report, which if changed, would significantly affect the reported amounts. We evaluated the key factors and assumptions used to develop the above described estimates in determining that they are reasonable in relation to the financial statements taken as a whole. Financial Statement Disclosures The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole. Disagreements with Management For purposes ofthis letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested celiain representations from management that are included In the management representation letter dated May 30,

54 The Honorable Mayor and Members of the City Commission City of Bartow Bartow, Florida Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on celtain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditors' opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. It is our understanding that management employed the services of another accountant (Mike Brynjulfson) to assist with the yearend closeout, financial report preparation, and other accounting matters. To our knowledge, all consultations with outside accountants were properly coordinated. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occuned in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the management discussion and analysis (MD&A) and the required supplementary information other than MD&A, as listed in the table of contents [collectively, the required supplementary information (RSI)], which is RSI that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on other supplementary information a<; listed in the table of contents, which accompanies the financial statements but is not RSI. With respect to this supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the other supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. Restriction on Use This information is intended solely for the use of the Mayor, Members of the City Commission, and management of the City, and is not intended to be, and should not be, used by anyone other than these specified parties. Q,h~, ~ ad. e.~, ;d May 30, 2018 () Sarasota, Florida 4

55 FINANCIAL STATEMENTS AND AUDITORS' REPORTS September 30, 2017

56 City of Bartow, Florida TABLE OF CONTENTS FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis 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 - 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 - Governmental Funds to the Statement of Activities.... Statement of Net Position - Proprietary Fund.... Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Fund.... Statement of Cash Flows - Proprietary Fund.... Statement of Fiduciary Net Position - Fiduciary Funds..... Statement of Changes in Fiduciary Net Position - Fiduciary Funds.... Notes to Financial Statements.... Required Supplementary Information Budgetary Comparison Schedule - General Fund.... Budgetary Comparison Schedule - Community Redevelopment Agency.... Schedule of Changes in Net Pension Liability and Related Ratios - General Employees' Retirement Trust Fund... Notes to the Schedule of Changes in Net Pension Liability and Related Ratios General Employees' Retirement Trust Fund... Schedule of Changes in Net Pension Liability and Related Ratios - Police Officers' Retirement Trust Fund... Notes to the Schedule of Changes in Net Pension Liability and Related Ratios Police Officers' Retirement Trust Fund... Schedule of Changes in Net Pension Liability and Related Ratios - Firefighters' Retirement Trust Fund... Notes to the Schedule of Changes in Net Pension Liability and Related Ratios - Firefighters' Retirement Trust Fund... Schedule of Contributions - All Pension Trust Funds... Notes to Schedule of Contributions - All Pension Trust Funds.... Schedule of Changes in the Total OPEB Liability and Related Ratios

57 City of Bartow, Florida TABLE OF CONTENTS Other Supplementary Information Combining Balance Sheet- Non-major Governmental Funds.... Combining Statement of Revenues, Expenditures and Changes in Fund Balances- Non-major Governmental Funds.... Budgetary Comparison Schedule - Transportation Fund.... Budgetary Comparison Schedule - Fire Services Fund.... Combining Statement of Net Position - Non-major Enterprise Funds.... Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Non-major Enterprise Funds.... Combining Statement of Cash Flows - Non-major Enterprise Funds.... Combining Statement of Fiduciary Net Position - Pension Trust Funds.... Combining Statement of Changes in Fiduciary Net Position - Pension Trust Funds.... GOVERNMENTAL AUDITING SECTION Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.... Independent Accountant's Report on Compliance with Section , Florida Statutes.... Management Letter

58 FINANCIAL SECTION

59 G p urv is ray&. C_offi_Qany The Honorable Mayor and Members of the City Commission City of Bartow Bartow, Florida INDEPENDENT AUDITORS' REPORT Report on the Financial Statements We have audited the accompanying financial statements of the govelnmental activities, the business-type activities, each major fund, and the aggregate remaining fund infolmation ofthe City of Bartow, Florida (the City), as of and for the year ended September 30,2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements 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 ofthe Police Officers' Pension Plan or the Firefighters' Pension Plan, which represent 43% and 20%, respectively, of the assets and expenditures/deductions of the aggregate remaining fund information. Those statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Police Officers' Pension Plan and the Firefighters' Pension Plan, is based solely on the reports of the other auditors. 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. The financial statements of the Police Officers' Pension Plan and the Firefighters' Pension Plan were not audited in accordance with Government Auditing Standards. An audit involves perfonning procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe 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. Certified Public Accountants p.o. Box N.E. 151 Slrf'el Gainesville, Florida (352) ;~7H-24(j 1 FAX (352) S Laurel Ridge Professional Center 2347 S.L 17th Street florida (352) fax (]52) East College Avenue. Tallahassee, Florida (WiO) FAX (B5(l) Lakewood r~anch Blvd. N., Suite 101 Sarasota, Florid.l (941) FAX (941) ~I[Mn[RS or A,\1[RIC\,'i lind florida I'<SFCUTr5 III ttrnnw PUHIIC ICCOUNT,INTS.\if,\\I;(K or AMlRIC,I" I.N5T1TUT[ ur URTIFIm rubuc.'\cccli,'t.. I"!'i Plll\'Aff Ul.\lrA '.''') ""'[) 'U:. PR.\cTICT 5fe1lClN,

60 The Honorable Mayor and Members of the City Commission City of Bartow Baltow, Florida INDEPENDENT AUDITORS' REPORT (Continued) Auditors' Responsibility (Concluded) 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 repolts of other auditors, the financial statements refelted to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2017, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter Implementation of New Accounting Standards As discussed in Note 14 to the financial statements, during the CUlTent year, the City adopted Governmental Accounting Standards BOal'd (GASB) Statement No Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. These statements require for the first time, that employers report the Other Postemployment Benefit Plan (OPEB) liability and related defelted inflows/outflows, on their statements of net position. In connection with the implementation of this standard, the City decreased its beginning net position by $11,570,393. Our opinion is not modified with respect to this matter. Other Matters Required Supplementmy Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and other required supplementary information as listed in the table of contents (collectively, the required supplementary information), be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by GASB, 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 and the other auditors 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 infonnation for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The other supplementary information is presented for purposes of additional analysis and is not a required pmt of the basic financial statements. 2

61 The Honorable Mayor and Members ofthe City Commission City of Bartow Bartow, Florida Other Matters (Conclut/ed) INDEPENDENT AUDITORS' REPORT (Cone/ut/erO Other Information (Concluded) The other supplementary information is the responsibility of management and was derived from, and relates directly to, the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and celiain 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 by us and other auditors. In our opinion, based on our audit, the procedures perfonned as described above, and the reports of the other auditors, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated May 30, 2018, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. O~,~a,.d~,ld May 30, 2018 () Sarasota, Florida 3

62 MANAGEMENTS DISCUSSION AND ANALYSIS September 30,2017 The Management's Discussion and Analysis (MD&A) is designed to provide an objective and easy to read analysis of the City's financial activities. The analysis is designed to assist the reader in focusing on significant financial issues, provide an overview of the City's financial activity, identify the changes in the City's financial position (its ability to address the next and subsequent year challenges), identify any material deviations from the financial plan (the approved budget), and identify individual fund issues of concern. Since the Management's Discussion and Analysis is designed to focus on the current year's activities, resulting changes, and currently known facts, please read it in conjunction with the City's financial statements and independent auditors' report (beginning on Page 1). Financial Highlights The City's assets (plus deferred outflows of resources) exceeded its liabilities (plus deferred inflows of resources) at the close of fiscal year 2017 by $80,925,506 (net position). Of this. amount, $7,249,844 (unrestricted net position) may be used to meet the City's ongoing obligations. The City's total net position increased by $2,385,812 during the year or a 3% increase compared to the restated prior year net position. Net position for governmental activities increased by $1,195,975, while the business-type activities' net position increased by $1,189,837. In addition, the City decreased the beginning net position of governmental activities by $8,907,470 and business-type activities by $2,662,923 in connection with the implementation of Governmental Accounting Standards Soard Statements No. 75 (GASS 75). Total combined revenues resulting from governmental activities and business-type activities increased $131,819 or.2% when compared to the prior year. Total combined expenses resulting from governmental activities and business-type activities increased $4,134,121 or 7% when compared to the prior year. At the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $21,489,649 an increase of $2,906,474 or 16% for the year. The City's business-type activities transferred $9,916,751 to cover the cost of governmental activities not funded by taxes or user fees. This is the same amount as prior year transfer. During the current year, the City implemented the provisions of GASS Statement 75 - Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Accordingly, beginning net position and beginning other post-employment benefit liability was restated to reflect the change in accounting principles as follows: o The previously reported October 1, 2016 balances of the governmental activities' other post-employment benefit liability was increased by $8,907,470 and the business-type activities' other post-employment benefit liability was increased by $2,662,923. The restatement was a result of implementation of GASS Statement 75. 4

63 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements focus on both the City as a whole (government-wide) and on the major individual funds. Both perspectives (government-wide and major fund) allow the user to address relevant questions, broaden a basis for comparison (year to year or government to government) and enhance the City's accountability. The Statement of Net Position and Statement of Activities seek to give the user a combined overview of the City's financial position. The financial statements use accrual accounting (which focuses on economic resources) in the government-wide statements, while maintaining modified accrual accounting (which focuses on current financial resources-budget basis) at the fund level (governmental funds only). This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide Financial Statements The government-wide financial statements consist of a Statement of Net Position and a Statement of Activities. Both statements represent an overview of the City as a whole, separating its operations between governmental and business-type activities. The governmental activities of the City include general government, law enforcement, fire control, building and zoning, public works, transportation, library, parks and recreation, and community development. The business-type activities of the City consist of electric, water, wastewater, sanitation, stormwater, information technology and airport services. All information is presented utilizing the economic resources measurement focus and accrual basis of accounting. This method better matches revenues and expenses to the period in which the revenue is earned and the expense incurred. The City's Community Redevelopment Agency is shown as a "blended" component unit of the City, which is a governmental unit over which the City can exercise influence and/or may be obligated to provide financial subsidy. Blending refers to the fact that the component unit's funds and balances are combined with those of the primary government for financial reporting. Fiduciary funds, such as pension trust funds, are excluded from the government-wide financial statements as they represent funds legally set aside for use by the employee groups they benefit. Florida law requires municipalities to fund pension plans on an actuarially sound basis, making it important for the user to study the fund financial statements as well as the related notes. The Statement of Net Position presents information on all the City's assets (plus deferred outflows of resources) and liabilities (plus deferred inflows of resources), with the difference between the two reported as net position. The focus of the Statement of Net Position (the "unrestricted net position") is designed to be like bottom line results for businesses. This statement combines and consolidates governmental fund current resources (short-term spendable resources) with capital assets and long-term obligations. Over time, the increase or decrease in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year, focusing on both the gross and net cost of various activities, both governmental and business-type, that are supported by the government's taxes and other general revenues. This is intended to summarize and simplify the user's analysis of the cost of various governmental services and/or subsidy by various business-type activities. 5

64 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over the resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The funds of the City can be divided into three categories: governmental, proprietary, and fiduciary funds. Traditional users of governmental financial statements may find the fund financial statement presentation more familiar. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City'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 City's near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains four separate governmental funds - the General Fund, the Community Redevelopment Agency (CRA) Fund, the Transportation Fund, and the Fire Services Fund. The first two are considered major funds. Information is presented separately for the two major funds in the Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balance which can be found by referring to the table of contents of this report. The Transportation and Fire Services Funds have been combined in the column entitled "non-major governmental funds" on these two statements. Separate schedules of the two non-major funds can be found in the "Other Supplementary Information" section by referring to the table of contents of this report. The City adopts an annual appropriated budget each year in September. Budgetary comparison statements have been provided to demonstrate compliance with the budget. These can be found for the General Fund and the CRA Fund in the "Required Supplementary Information" section by referring to the table of contents of this report. The basic governmental funds financial statements can be found by referring to the table of contents of this report and the presentation is on the current financial resources measurement focus. This is the way the financial plan (the budget) is typically developed. The flow and availability of liquid resources is a clear and appropriate focus of any analysis of a government. Funds are established for various purposes and the fund financial statements allow the demonstration of sources and uses and/or budgeting compliance for each fund. 6

65 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 Proprietary Funds. The City maintains only one of the two proprietary fund types. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements, only in more detail. The City uses enterprise funds to account for its electric, water, wastewater, sanitation, information technology, stormwater, and airport activities. The basic proprietary fund financial statements can be found by referring to the table of contents of this report. On those pages, the Sanitation, Information Technology, and Stormwater Funds are combined and shown as non-major funds. Combining statements for these three funds can be found in the "Other Supplementary Information" section by referring to the table of contents of this report. The other proprietary fund type known as internal service funds is an accounting device used to accumulate and allocate costs internally among a government's various functions. The City does not presently utilize internal service funds. Fiduciary Funds. Fiduciary funds are used to account for pension resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City's own programs. While these funds represent trust responsibilities of the government, these assets are restricted in purpose and do not represent discretionary assets of the government. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements and combining statements for the individual pension plans can be found by referring to the table of contents of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found by referring to the table of contents of this report. Infrastructure assets. The City has elected to record and depreciate its infrastructure, rather than use the optional "modified approach". The City's roads, sidewalks and drainage networks were determined to be significant enough to record. 7

66 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 GOVERNMENT-WIDE FINANCIAL ANALYSIS Summary of Net Position. As noted earlier, net position may serve over time as a useful indicator of a government's financial position. At the end of the current year, the City's net position was $80,925,506. The following table reflects a summary of net position compared to the prior year. For additional information, see the Statement of Net Position by referring to the table of contents of this report. Statement of Net Position (Summary) as of September 30, Governmental Activities Business-type Activities Total Primar:{ Government Current and other assets $24,137,826 $ 20,505,566 $48,440,991 $ 43,366,776 $72,578,817 $ 63,872,342 Capital assets 22,829,814 23,187,620 66,755,907 65,182,856 89,585,721 Total assets 46,967,640 43,693, ,196, ,164, ,242,818 Deferred outflows 6,714,749 4,848,743 2,357,187 1,676,232 9,071,936 6,524,975 Current liabilities 1,843,857 1,106,580 13,425,575 8,791,949 15,269,432 9,898,529 Non-current liabilities 35,410,356 22,952,736 39,089,837 34,895,982 74,500,193 57,848,718 T ota Ilia bilities 37,254,213 24,059,316 52,515,412 43,687,931 89,769,625 67,747,247 Deferred inflows 445, ,680 95, , , ,459 Net position: Net investment in capital assets 20,487,570 20,581,376 41,822,016 39,557,642 62,309,586 60,139,018 Restricted 3,997,989 3,522,270 7,368,087 6,207,946 11,366,076 9,730,216 Unrestricted (8,503, 121l (409,713) 15,752,965 20,650,566 7,249,844 20,240,853 Total net position $15,982,438 $ 23,693,933 $64,943,068 $ 66,416,154 $80,925,506 $ 90,110,087 At September 30, 2017, approximately 77% of the City's net position reflects its investment in capital assets (land, buildings, improvements, infrastructure, vehicles and equipment) net of any related debt used to acquire those assets that is still outstanding, compared to 67% for the prior year. The City uses these capital assets to provide services to citizens; consequently, this component of net position is not available for future spending. Although the City's investment in 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. Approximately 14 % of the City's net position represents resources that are subject to external restrictions on how they may be used. That compares to 11 % in the prior year. The remaining balance of unrestricted net position, $7,249,844 or 9% of the City's net position in 2017 may be used to meet the City's ongoing obligations to citizens and creditors. This is a decrease in unrestricted net position of $12,991,009 or 64% for the year. Total beginning net position of the City decreased by $11,570,393 or 13% due to a restatement in connection with the implementation of GASB 75. Total net position of the City increased by $2,385,812 because of operations. 8

67 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 Statement of Activities. The following table reflects a summary of the Statement of Activities which can be found by referring to the table of contents of this report. Statement of Activities (Summary) For the year ended September 30, Governmental Activities Business-t)l:l!e Activities Total Primal)[ Government Revenues: Program Revenues: Charges for services $ 2,337,136 $ 2,466,704 $53,480,446 $52,010,215 $55,817,582 $54,476,919 Operating grants/contrib. 925,038 1,076, ,038 1,076,979 Capital grants/contrib. 223, ,031 1,882,381 3,516,534 2,106,103 3,817,565 General revenues: Property taxes - General 1,891,024 1,826,910 1,891,024 1,826,910 Property taxes - CRA 782, , , ,681 Pub SIoC tax/franchise fees 2,708,527 2,640,093 2,708,527 2,640,093 Transportation fuel taxes 997, , , ,861 State shared rel.enue 1,868,600 1,786,975 1,868,600 1,786,975 Other {11,250~ 598, , ,225 Total revenues 11,838,984 55,960,904 68,052,027 67,920,208 Expenses: GOl.emmental activities: General gol.emment 2,613,300 2,831,859 2,613,300 2,831,859 Law enforcement 5,826,326 5,932,936 5,826,326 5,932,936 Fire control 2,801,454 2,334,020 2,801,454 2,334,020 Building and zoning 401, , , ,432 Public works 1,041,707 1,252,176 1,041,707 1,252,176 Transportation 1,392,044 1,381,430 1,392,044 1,381,430 Library 1,259,437 1,136,136 1,259,437 1,136,136 Parks and recreation 4,934,333 4,702,345 4,934,333 4,702,345 Community redel.elopment 481, , , ,586 Interest on long-term debt 60,941 66,290 60,941 66,290 Business-type activities: Electric 28,573,197 25,107,206 28,573,197 25,107,206 Water 4,086,573 4,244,476 4,086,573 4,244,476 Wastewater 3,942,095 3,861,209 3,942,095 3,861,209 Sanitation 2,600,478 2,610,190 2,600,478 2,610,190 Stormwater 489, , , ,917 Information technology 320, , , ,824 Airport 4,842,474 4,305,062 4,842,474 4,305,062 Total expenses 20,811,899 20,628,210 44,854,316 40,903,884 65,666,215 61,532,094 Transfers in (out) 9,916,751 9,916,751 {9, 916, 751} (9,916,751) Change in Net Position 1,195,975 1,127,525 1,189,837 5,260,589 2,385,812 6,388,114 Net position - Beginning (restated) 14,786,463 22,566,408 63,753,231 61,155,565 78,539,694 83,721,973 Net position - Ending $15,982,438 $23,693,933 $64,943,068 $66,416,154 $80,925,506 $90,110,087 Governmental activities On the Statement of Activities as referred to in the table of contents of this report, general revenues including transfers are reported separately after the total net expenses of the City's functions, ultimately arriving at the change in net position for the year. The City has in place fees and charges that are designed to recover in part or in whole the cost of providing services. Florida case law prevents recovery of more than the cost of services provided, except for proprietary activities. In operating grants and contributions were received for general government, law enforcement, fire control and library. In 2017, capital grants and contributions were received for general government, law enforcement. transportation and parks & recreation. 9

68 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30, 2017 During 2017, governmental activities net position increased by $1,195,975 compared to an increase in 2016 of $1,127,525, a net increase of $68,450. However, this required transfers from business-type activities of $9,916,751 in both years, to achieve these results. Overall, total revenues-governmental activities were up $252,139 or 2%, total expenses were up $183,689 or 1 %, and transfers are unchanged. Following are key changes in the statement of activities from 2016 to 2017: Charges for service decreased $129,568 or 5% in 2017 compared to Operating grants and contributions were down $151,941 or 14% in 2017 compared to Capital grants and contributions were down $77,309 or 26% in 2017 compared to 2016, caused primarily by decreased capital grants. Property taxes are up $62,129 or 2% in 2017 compared to The City's millage rate decreased slightly from in 2016 to in 2017, but valuations were up in the City as a whole due to the continued improvement in the economy. Remaining program and general revenues were down $548,828 or 10% for various reasons. On the expense side: General government expenses decreased by $218,559 or 8% in 2017 compared to Law enforcement expenses decreased by $106,610 or 2% in 2017 compared to The main cause of this decrease is attributable to reduced payroll expenses. Fire control expenses increased by $467,434 or 20% in 2017 compared to The main cause of this increase is attributable to increased pension expense, increased OPEB expense and increased depreciation expense. Public works expenses decreased by $210,469 or 17% in 2017 compared to Parks and recreation expenses increased by $231,988 or 5% in 2017 compared to Remaining program expenses decreased by $19,905 or 1% in 2017 compared to The extent of governmental fund reliance on proprietary fund transfers emphasizes the need for tighter controls on governmental fund spending. Slight fluctuations in the weather have a substantial impact on utility revenues and the ultimate transfers to support governmental activities. Growing personnel and operating costs in the service-oriented governmental funds make it difficult to adapt quickly to fluctuating utility revenues and profit margins. This lack of flexibility emphasizes the need for increased reserves and controlling costs. Business-type activities Business-type activities experienced an increase in net position of $1,189,837 compared to an increase of $5,260,589 in the prior year, a decrease of $4,070,752. This is after the transfer supporting governmental activities discussed above. Revenues decreased $120,320 or.2% from 2016 to 2017, and expenses increased by $3,950,432 or 10%. Power costs in the City's Electric Fund are up $791,450. The City purchased more kilowatt hours, but fuel prices were down in 2017 which more than offset the increased consumption. And because the City uses a power cost adjustment in its retail electric rates, those fuel cost reductions were passed on to the City's customers, causing revenues to drop by a similar amount. 10

69 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 Charges for services revenue increased by $1,470,231 or 3% while capital grants and contributions decreased by $1,634,153 or 46% due to decreased impact fee and capital grant revenue. Operating income for all business-type activities is down $2,955,933 or 24% for the year. This is mainly caused by a $3,950,432 increase in expenses which were mainly a result of hurricane related expenses due to the effects of Hurricane Irma that hit the City on September 9,2017. FINANCIAL ANALYSIS OF THE CITY'S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental Funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. The City reports the General Fund and the Community Redevelopment Agency as major governmental funds. At the end of the current fiscal year, the City's governmental funds reported a combined fund balance of $21,489,649. Of this amount, $164,014 or 1% is non-spendable, $3,997,989 or 19% is legally restricted for specific purposes, $1,125,927 or 5% has been assigned by the City Commission for fire services ($148,819) and amounts to be used during the fiscal year ($977,108), and $16,201,719 or 75% is unassigned and available for spending at the City's discretion. Following is a discussion of individual major governmental funds. General Fund. The General Fund is the chief operating fund of the City. At year end, unassigned and assigned fund balance of the General Fund totaled $17,178,827, and total fund balance was $18,165,900. This represents 112% and 119% respectively, of total General Fund expenditures for the year ended September 30, In the General Fund, the change in fund balance for the year improved from an increase of $2,313,136 in 2016 to an increase of $2,479,338 in 2017, an improvement of $166,202. Following is a summary of the changes from 2016 to 2017: Revenues are up $41,340 or.4%. The revenue category that was up the most was tax revenue, which increased $141,534 or 3%. The revenue categories that declined the most are licenses and permit revenue, which declined $65,603 or 21% due to decreased building permit and other construction related fees and "other" revenue, which declined $73,332 or 12% mainly due to decreased impact fee revenue. Expenditures are down $182,108 or 1 %. The expenditure categories that changed the most include public safety, which is down $230,203 or 4%, physical environment which is down $268,959 or 22% and general government, which is up $312,337 or 11%. Public safety decreased mainly due to lower payroll related expenses, physical environment decreased due to lower repair and maintenance expenses and general government expenses increased mainly due to increased pension costs. Transfers out to the Fire Services Fund increased from $1,457,081 in 2016 to $1,514,327 in

70 MANAGEMENTS DISCUSSION AND ANALYSIS September 30, 2017 The Community Redevelopment Agency. The Community Redevelopment Agency (CRA) was created by City Ordinance No pursuant to Florida Statutes Chapter 163. To satisfy the requirements of Section (8) of the Florida Statutes, the CRA is included in the primary government's report as a major fund. The CRA receives the incremental ad valorem taxes from the County and the City, generated by the increase in property values within the redevelopment area. The CRA's property taxes are levied under the taxing authority of the City and are included as part of the City's total tax levy. The CRA board consists of seven citizens appointed by the City Commission. At year end, total fund balance in the CRA Fund totaled $844,471. The change in fund balance for the year declined from a decrease of $42,267 in 2016 to an increase of $121,409 in 2017, an increase of $163,676. Following is a summary of the changes from 2016 to 2017: Revenues were up $3,810 or 8% and expenditures decreased by $159,866 or 19%. While revenues were basically flat, economic environment expenditures decreased due to decreased repair and maintenance and related non-capital improvement expenditures. Proprietary Funds. The City's proprietary funds provide essentially the same type of information found in the government-wide financial statements, but presented by fund, and is in more detail. The City's proprietary funds consist of seven enterprise funds, four of which are reported as major funds. An overall picture of the operating results of the combined enterprise funds was addressed above in the discussion of the City's business-type activities. Following are the highlights of the changes from 2016 to 2017, by major fund: In the Electric Fund, the change in net position declined from an increase of $1,176,449 in 2016 to a decrease of $1,816,087 in 2017, a decline of $2,992,536. The decline was attributable to a 1 % increase in sales and a 14% increase in operating expenses. The increase in operating expenses was mainly caused by costs caused in response to Hurricane Irma. In the Water Fund, the change in net position improved from an increase of $654,145 in 2016 to an increase of $1,105,244 in 2017, an improvement of $451,099. Charges for services increased by $212,379 or 5% and operating expenses decreased by $315,800 or 10%. In the Wastewater Fund, the change in net position declined from an increase of $1,136,780 in 2016 to an increase of $985,855 in 2017, a decline of $150,925. Charges for services increased by $167,313 or 4% and operating expenses increased by $90,048 or 2%. Capital contributions decreased by $218,108 or 25%. In the Airport Fund, the change in net position declined from an increase of $1,685,642 in 2016 to a decrease of $21,930 in 2017, a decrease of $1,707,572. Charges for services increased by $426,547 or 12%, and operating expenses increased $527,073 or 12%. The main change was a decrease in capital grants of $1,606,735. In the combined Non-Major Funds, the change in net position improved from an increase of $607,573 in 2016 to an increase of $936,755 in 2017, an improvement of $329,182. Operating revenues increased by $210,133 or 5%, and operating expenses increased $24,046 or 1 %. Combining statements can be found in the "Other Supplementary Information" section of the financial statements. 12

71 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 Fiduciary Funds. The City uses Fiduciary Funds to report assets held in a trustee or agency capacity that are, therefore, not available to support City programs. The City maintains three single-employer defined benefit pension plans for its employees. The three pension plans reported $54,260,368 of net position restricted for pension benefits at September 30, This is an increase of $5,586,895 or 11 % for the year. The combined funds reported net investment income of $5,597,441 for Combining statements can be found in the "Other Supplementary Information" section of the financial statements. GENERAL FUND BUDGETARY HIGHLIGHTS The General Fund budgetary comparison schedule can be found in the "Required Supplementary Information" section of the financial statements. As shown on that schedule, the original 2017 General Fund budget anticipated using $1,278,130 of beginning fund balance during Amendments to the original budget during 2017 increased anticipated revenues and reduced anticipated expenditures, resulting in a projected surplus (final budget) of $1,707,461, and included the following: The original budget for revenues and other financing sources was increased by $14,355. The budget amendments increased the "other" revenue by $12,500, increased the tax revenue budget by $184,855 and decreased the intergovernmental revenue budget by $183,000. The original budget for expenditures and transfers out was reduced by $2,971,236. Amendments included reductions to the general government budget totaling $1,086,343 (mostly commission and finance departments), reductions to public safety of $285,490 ($185,990 - police department and $99,500 - fire department), reductions to the culture/recreation budgettotaling $753,317, and reductions to the physical environment ("public works") budget totaling $778,086. Actual results for 2017 added $2,479,338 to beginning fund balance and were $771,877 better than the final budget discussed above. Actual revenues came in $101,758 or 1 % less than the final amended budget. No single category was significantly over or under budget. Expenditures came in $740,276 or 5% lower than the final amended budget, spread across all departments. 13

72 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30, 2017 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The City's investment in capital assets includes land, buildings and improvements, infrastructure, and equipment, net of accumulated depreciation. The City's investment in capital assets for its governmental and business-type activities as of September 30,2017, totals $89,585,721 (net of accumulated depreciation), an increase of $1,215,245 for the current year. Governmental net additions were $1,174,159 and depreciation was $1,531,965 for a net decrease of $357,806. Business-type net additions were $6,083,876 and depreciation was $4,510,825, for a net increase of $1,679,900. Following is a schedule of capital assets at the end of the current and prior year: Capital Assets Activity (net of accumulated depreciation) as of Septerrber 30, Governmental Activities Bus iness-tllp.e Activities Total Primarll Government Land $ 6,248,994 $ 5,660,094 $ 1,662,582 $ 1,662,582 $ 7,911,576 $ 7,322,676 Buildings and irrprovements 14,925,971 14,998, ,609, ,607, ,535, ,606,303 Equipment 6,836,971 6,935,686 11,961,765 10,720,682 18,798,736 17,656,368 Infrastructure 30,138,516 29,909,574 30,138,516 29,909,574 Construction in progress 111,482 1,191 1,192,195 2,769,074 1,303,677 2,770,265 Accumulated Depreciation (35,432,120) (34,317,827) (80,670,051 ) (76,576,883) (110,894,710) Total $ 22,829,814 $ 23,187,620 $66,755,907 $ 65,182,856 Capital asset net additions during 2017 included the following: Governmental Activities: Various equipment - $246,026 Road infrastructure - $228,942 Land - $588,900 Civic Center roof improvements - $110,291 Business-type Activities: Electric fund $982,706 Waterfund - $109,099 Wastewater fund - $2,768,431 Airport fund - $1,374,414 Sanitation fund - $771,275 Information technology fund - $92,800 Stormwater fund - $92,000 Additional information on the City's capital assets can be found in Note 6 of the Notes to the Financial Statements. 14

73 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 Long-term obligations. At the end of the current fiscal year, the City's long-term obligations totaled $76,717,999 compared to $69,419,111 at the end of 2016 as restated. Long-term obligations include long-term debt and estimated workers compensation claims, other post-employment benefit liability, net pension liabilities and accumulated compensated absences. Long-term debt consists of bonds and notes. The previously reported October 1, 2016 balances of the governmental activities' other post-employment benefit liability was increased by $8,907,470 and the business-type activities' other post-employment benefit liability was increased by $2,662,923. The restatement was a result of implementation of GASB Statement 75. Long-Term Obligations as of September 30, Governm ental Activities Business-type Activities Total Primary Government (restated} (restated} {restated} Bonds and notes payable $ 2,342,244 $ 2,606,243 $30,183,662 $ 27,867,372 $ 32,525,906 $ 30,473,615 Es timated workers col1llensation claims 685, , , ,554 Other post el1llloyment benefits 19,512,433 15,980,574 7,010,299 5,720,586 26,522,732 21,701,160 Net pension liability 11,544,778 11,262,989 3,229,026 3,193,178 14,773,804 14,456,167 Col1llensated absences 1,325,087 1,302, ,769 2,209,743 2,080,615 Total $ 35,410,356 $ 31,860,206 $ 37,558,905 $ 76,717,999 $ 69,419,111 At the end of the current fiscal year, the City's long-term debt totaled $32,525,906, compared to $30,473,615 at the end of 2016, an increase of $2,052,291. Of the year-end balance, $2,342,244 was in governmental activities and $30,183,662 was in business-type activities. The net increase in longterm debt for 2017 was attributable to scheduled principal payments, amortization of bond discounts and the issuance of the Airport Revenue Note, Series 2016 for $2,900,000. Scheduled principal payments were $263,999 in governmental activities and $583,710 in business-type activities. 15

74 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2017 Long-term obligations other than long-term debt consist of obligations related to workers compensation claims, other post-employment benefits (OPEB), accrued compensated absences and net pension liabilities. At the end of the current fiscal year, the City's long-term obligations other than long-term debt totaled $44,192,093 compared to $38,945,496 at the end of 2016 as restated. Of the year-end balance, $33,068,112 was in governmental activities and $11,123,981 was in business-type activities. The net OPEB obligation increased by $4,821,572 during 2017 and the net pension liability increased by $317,637. Factors considered in preparing the City's fiscal year budget were: The unemployment rate for the Central Florida area as of October 2017 was 3.2% compared to 3.9% state-wide and 4.1% nationally. The operating millage rate for the fiscal year decreased from $ to $ per $1, of taxable value. The taxable value of commercial and residential property increased $43,746,384 or 6.93% in the 2017 tax year. This is % below the point at which City property values peaked nine years ago. The Fire Assessment enacted in 2009 was set at a level to recover 25% of the cost of fire services. Water and Sewer rates will remain unchanged beginning October Annual adjustments had been preset through the fiscal year ending September 30, There were no changes to Solid Waste rates. Electric rates will be adjusted to reflect savings expected to be realized under new power supply contracts. The new power supply costs begin in January 2018 and it is projected that the average net savings to the customer will be 11.4%. Base rate adjustments will take effect on April 1, Additional information can be found under Ordinance No and in the 2017 Electric Rate Study. Stormwater rates remained the same for Rates increased slightly in for the first time in 10 years following an engineering Study. The City has relied on attrition to reduce its workforce. Some positions have been permanently eliminated and those changes were incorporated into the budget. This budget continues to reflect the City's Strategic Plan which relies on the prioritization of City services to allocate resources. The City's population has increased slightly to approximately 19,499 in No material increases or decrease is expected for the fiscal year. REQUEST FOR INFORMATION This financial report is designed to provide users with a general overview of the City of Bartow's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, P. O. Box 1069, Bartow, Florida or telephone (863) You can also access our website at 16

75 STATEMEI\JT OF NET POSITION SEPTEMBER 30, 2017 Primary Government Governmental Business-type Activities Activities Total ASSETS Equity in pooled cash and cash equivalents $ 18,697,283 $ 22,535,844 $ 41,233,127 Im.estment securities 896, ,182 Receivables, current: Customer accounts, net 401,652 6,801,255 7,202,907 Intergovemmental and other 541, , ,891 Notes receivable, net 2,500 2,500 Inventory and prepaids 161,514 1,412,421 1,573,935 Restricted assets: Equity in pooled cash and cash equivalents 4,255,693 16,356,223 20,611,916 Customer receivable 77, , ,359 Capital assets: Non-depreciable 6,360,476 2,854,777 9,215,253 Depreciable, net 16,469,338 63,901,130 80,370,468 TOTAL ASSETS 46,967, , ,164,538 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 4,713,587 1,109,080 5, Deferred outflows - loss on refunding 534, Deferred outflows related to OPES TOTAL DEFERRED OUTFLOWS OF RESOURCES 6,714,749 2,357,187 9,071,936 LIABILITIES Accounts payable and accrued expenses ,897,996 6,353,272 Construction costs payable 112, ,425 Accrued wages 127,394 68, ,907 Due to other governments 233, ,070 Unearned revenue 9,223 2,912, ,833 Accrued interest payable 18, , ,678 Customer deposits 2,972,441 2,972,441 Long-term obligations: Due within one year 2, ,484,874 Due in more than one year , TOTAL LIABILITIES ,412 89,769,625 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 445, ,343 NET POSITION Net investment in capital assets 20,487, ,016 62,309,586 Restricted for: General govemment facilities ,193 Community redevelopment 841, ,971 Transportation 2,328, ,825 Municipal Airport activities 1,247,626 1,247,626 Debt service 1,358, Water and wastewater improvements 4,761,944 4,761,944 Unrestricted 15,752,965 7,249,844 TOTAL NET POSITION $ 64,943,068 $ 80,925,506 The accompanying notes are an integral part of these financial statements 17

76 STATEMENT OF ACTIVITIES For the year ended September 30, 2017 Proeram Revenues Net (Expense) Revenue and Indirect Operating Capital Changes in Net Position Expense Charges for Grant and Grant and Governmental Business-Type FUNCTIONS/PROGRAMS ~enses Allocation Services COntributions Contributions Activities Activities Total PRIMARY GOVERNMENT: Governmental activities: General government $ 3,478,783 $ (865,483) $ 55,712 $ 13,541 $ 52,661 $ (2,491,386) $ $ (2,491,386) Law enforcement 5,826, , ,956 7,195 (5,440,127) (5,440,127) Fire control 2,801, ,709 98,314 (2,143,431 ) (2,143,431) Building and zoning 401, ,866 (163,152) (163,152) Public works 1,074,101 (32,394) (1,041,707) (1,041,707) Transportation 1,392, ,425 79,049 (1,201,570) (1,201,570) Library 1,259,437 18, ,227 (706,439) (706,439) Parks and recreation 4,934,333 1,253,605 84,817 (3,595,911 ) (3,595,911 ) Communitydevelopment 481,339 (481,339) (481,339) Interest on long-term debt 60,941 Total governmental activities 21,709,776 (897,877) Business-type activities Electric 28,211, ,662 35,696,824 64,526 7,188,153 7,188,153 Water 3,937, ,225 4,776, ,790 1,018,460 1,018,460 Wastewater 3,789, ,131 4,820, ,723 1,524,308 1,524,308 Sanitation 2,471, ,249 3,253, , ,830 Stormwater 437,540 51, ,219 92, , ,053 Information technology 266,349 53, ,104 (89,229) (89,229) Airport 4,842,474 Total business-type activities 43,956, ,877 TOTAL PRIMARY GOVERNMENT $ 65,666,215 $ 55,817,582 $ 925,038 $ 2,106,103 $ (17,326,003) $ 10,508,511 $ (6,817,492) GENERAL REVENUES Taxes: property taxes, levied for general purposes 1,891,024 1,891,024 Property taxes, levied for com m unity redevelopment purposes 782, ,696 Public service taxes and franchise fees 2,708,527 2,708,527 Fuel taxes levied for transportation purposes 997, ,921 State shared revenue 1,868,600 1,868,600 Investment earnings 57, , ,874 Miscellaneous 178, , ,721 Gain on disposal of capital assets 120,295 58, ,941 TRANSFERS 9,916,751 (9,916,751) Total general revenues and transfers 18,521,978 (9,318,674) 9,203,304 CHANGE IN NET POSITION 1,195,975 1,189,837 2,385,812 NET POSITION, beginning of year, previously reported 23,693,933 66,416,154 90,110,087 Restatement (Note 14) (8,907,470) (2,662,923) (11,570,393) NET POSITION, beginning of year, as restated 14,786,463 NET POSITION, end of year $ 15,982,438 The accompanying notes are an integral part of these financial statements 18

77 BALANCE SHEET - GOVERNMENTAL FUNDS September 30, 2017 Community Non-major General Redevelopment Governmental Fund Agenc~ Funds Total ASSETS Equity in pooled cash and cash equivalents $ 18,697,283 $ 969,273 $ 1,535,937 $21,202,493 Receivables, net Customer accounts, net 401, ,652 Intergo\ernmental and other 358, , ,635 Notes receivable 2,500 2,500 In\entory 144, ,200 Prepaid expenditures 15,680 1,634 17,314 Due from other funds 104, ,796 Restricted assets: Cash and cash equivalents 827, ,290 1,750,483 Customer receivables 43,820 TOTAL ASSETS $ 2,687,417 LIABILITIES Accounts payable 1,282,922 22, ,848 1,455,276 Accrued payroll 112,923 14, ,394 Accrued claims payable 685, ,814 Due to other go\ernments 233, ,070 Due to other funds 104, ,796 Unearned re\enue TOTAL LIABILITIES 2,323, , ,319 2,615,573 DEFERRED INFLOWS OF RESOURCES Unavailable re\enue 93,580 43, ,400 FUND BALANCE Nonspendable: In\entory 144, ,200 Prepaids 15,680 1,634 17,314 Notes receivable 2,500 2,500 Restricted for: Transportation impro\ements 923, ,290 Transportation activities 1,405,535 1,405,535 Facilities impro\ements 827, ,193 Rede\elopment 841, ,971 Assigned to: Fire services 148, ,819 Subsequent year budget 977, ,108 Unassigned 16,201,719 TOTAL FUND BALANCES 18,165,900 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE $ 2,687,417 $24,242,622 The accompanying notes are an integral part of these financial statements 19

78 RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION September 30,2017 Amounts reported for governmental activities in the statement of net position are different because: FUND BALANCES - TOTAL GOVERNMENTAL FUNDS Capital assets used in go'l. rnmental activities are not financial resources and, therefore, are not reported in the go'l. rnmental funds. Re'l. nues not recei'l. d within the "availability" period are deferred at the fund le'l. l and recognized in the statement of activities Deferred outflows of resources represent an consumption of net position or fund balance that applies to a future period(s) and, therefore, are not reported in the go'l. rnmental funds Deferred inflows of resources represent an increase in net position or fund balance that applies to a future period(s) and, therefore, are not reported in the go'l. rnmental funds Interest payable on long-term debt does not require current financial resources and therefore, is not reported as a liability in go'l. rnmental funds. Long-term liabilities (including bonds and notes payable, compensated absences liability, estimated workers' compensation claims, OPES obligation, and net pension liabilities) are not due and payable in the current period and, therefore, are not reported in the go'l. rnmental funds. This is the amount of the long-term obligations This is the amount of workers' camp liability recorded at the fund le'l. l NET POSITION OF GOVERNMENTAL ACTIVITIES $ 21,489,649 22,829, ,400 6,714,749 (445,738) (18,894) (35,410,356) 685,814 $ 15,982,438 The accompanying notes are an integral part of these financial statements 20

79 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the year ended September 30, 2017 REVENUES: Community Non-major General Redevelopment Governmental Fund Agenc:l Funds Taxes $ 4,739,442 $ 782,696 $ 1,094,345 $ 6,616,483 Licenses and permits 239, ,531 Intergovernmental revenue 2,333, ,136 2,508,746 Charges for services 1,460, ,575 2,126,736 Fines and forfeitures 96, ,847 Other 532,639 Total revenues 9,402,155 EXPENDITURES: General government 3,051,235 3,051,235 Public safety 5,451,101 2,150,171 7,601,272 Physical environment 944, ,500 Economic environment 138, , ,307 Transportation 1,041,161 1,041,161 Culture/recreation 5,254,730 5,254,730 Capital outlay 397,706 42, ,814 Debt service 239, ,072 Total expenditures 15,325, ,410 3,233,440 19,235,091 EXCESS (DERCIENCy) OF REVENUES OVER EXPENDITURES 121,409 (1,208,600) (7,010,277} OTHER ANANCING SOURCES (USES) Transfers in 9,916,751 1,514,327 11,431,078 Transfers (out) {1,514,327l TOTAL OTHER ANANCING SOURCES (USES) 8,402,424 1,514,327 NET CHANGE IN FUND BALANCE 2,479, , ,727 2,906,474 FUND BALANCE, beginning of year 15,686,562 18,583,175 FUND BALANCE, end of year $ 18,165,900 $ 844,471 $ 2,479,278 $ 21,489,649 The accompanying notes are an integral part of these financial statements 21

80 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the year ended September 30, 2017 Amounts reported for governmental a ctivities in the statement of net activities are different because: NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 2,906,474 Go~mmental funds report capital outlay as expenditures. Howe~r, in the statement of actilaties, the cost of these assets is allocated o~r their estimated usefulli~s and reported as depreciation expense. This is the amount of capital assets recorded in the current period. This is the amount of depreciation recorded in the current period. 1,174,159 (1,531,965) Re~nue not recei~d within the "availability" period are not reported as re~nues at the fund le~1 and are recognized as re~nue in the statement of actilaties. This represents the change caused by the "availability" criterion Long-term obligations including bonds and notes payable, compensated absences and other post-employment benefit obligations are reported as liabilities in the go~mment-wide statement of net position but are not reported as liabilities in the go~rnmental funds because they do not require the use of current financial resources: This is the repayment of bond principal reported as expenditures in go~mmental funds. This is the change in accrued interest payable on long-term obligations. This is the change in accrued compensated absences during the year. This is the change in the net OPEB liability during the year. This is the change in deferred outflows related to OPEB Pension expense is reported in the statement of actilaties which differs from pension expenditures as reported in the go~mmental finds: 8, ,999 2,129 (22,241) (3,531,859) 2,001,162 This amount represents the change in deferred inflows related to pensions. This amount represents the change in deferred outflows related to pensions. This amount represents the change in the net pension liability. CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES The accompanying notes are an integral part of these financial statements 22

81 STATEMENT OF NET POSITION - PROPRIETARY FUND September 30, 2017 Business Type Activities - Entererise Funds Electric Water Wastewater Airport Non-major Fund Fund Fund Fund Funds Total ASSETS Current assets: Equityin pooled cash and cash equivalents $10,579,999 $3,094,052 $ 2,564,893 $ 2,836,411 $ 3,460,489 $ 22,535,844 Investment securities 896, ,182 Receivables: Customers, net 5,024, , ,482 29, ,064 6,801,255 Intergovernmental and other 4, ,893 1, ,256 Inventory and prepaids 1,164, ,428 10,158 89,351 34,355 1,412,421 Total current assets 16,768,215 4,649,726 3,335,744 3,184,280 3,941,993 31,879,958 Noncurrent assets: Restricted assets: Equity in pooled cash and cash equivalents 2,625,550 5,735,566 5,095,107 2,900,000 16,356,223 Customer receivable 118,431 86, ,810 Capital assets: Non-depreciable 329, ,875 87,056 1,827, ,685 2,854,777 Depreciable, net 9,731,396 13,530,567 19,820,082 16,830,780 3,988,305 63,901,130 Total noncurrent assets 12,686,708 19,780,439 25,088,624 21,558,179 4,202,990 83,316,940 Total assets 29,454,923 24,430,165 28,424,368 24,742,459 8,144, ,196,898 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 525, , , ,219 1,109,080 Deferred outflows refunding loss 534, ,954 Deferred outflows related to OPEB 292,725 90,227 80, ,436 Total deferred outflows of resources 818, , , ,436 LIABILITIES Current liabilities: Accounts payable 4,168,320 21, ,014 80, ,253 4,897,996 Construction costs payable 112, ,425 Accrued wages 34,775 7,502 7,216 8,534 10,486 68,513 Uneamed revenue 2,766, ,912 2,912,610 Com pensated absences 128, ,981 Bonds and notes payable, current 84,120 1,373, , ,000 2,088,825 Total current liabilities 4,287,215 1,402,808 3,309, , ,739 10,209,350 Noncurrent liabilities: Liabilities payable trom restricted assets: Customer deposits 2,625, ,891 2,972,441 Interest payable 5, ,933 22,561 10, ,784 Com pensated absences 339, , ,200 46,287 86, ,674 Post employment obligation payable 2,897, , ,270 1,285,234 1,244,481 7,010,298 Net pension liability 1,480, , , ,609 3,229,028 Bonds and notes payable, noncurrent portion 653,624 18,496,205 6,249,008 2,696,000 28,094,837 Total noncurrent liabilities 8,002,954 20,224,301 7,593,938 4,384,751 2,100,118 42,306,062 Total liabilities 12,290,169 21,627,109 10,903,762 5,065,515 2,628,857 52,515,412 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 16,618 19,531 95,605 NET POSI110N Net investment in capital assets 9,323,414 (3,481,376) 13,231,234 18,545,754 4,202,990 41,822,016 Restricted for: Debt retirement 1,290,000 68,517 1,358,517 Utility system improvements (expendable) 2,437,753 2,324,191 4,761,944 Unrestricted 3,355,454 2,113,481 1,247,626 17,000,591 Total net position $3,601,831 $17,737,423 $19,793,380 $ 64,943,068 The accompanying notes are an integral part of these financial statements 23

82 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - PROPRIETARY FUND September 30, 2017 Business Ty:~e Activities - Enter~rise Funds Electric Water Wastewater Airport Non-major Fund Fund Fund Fund Funds Total OPERATING REVENUES: Charges for services $ 35,696,824 $ 4,776,243 $ 4,820,680 $ 4,035,068 $ 4,151,631 $ 53,480,446 Total operating income 35,696~4 4,776, ,820,68(1 4,035,068 4,151,631 53,480,446 OPERATING EXPENSES: Personnel services 2,651, , ,539 1,346,223 1,062,874 6,633,323 Purchased power 20,273,912 20,273,912 Operating expenses 4,692,543 1,877,464 1,928,175 2,280,406 1,964,555 12,743,143 Depreciation 935, ,151 1,164,928 1,205, ,548 4,510,825 Total operating expenses 28,554,002 3,574,447 3,790,642 4,832,135 3,409,977 44,161,203 OPERATING INCOME 7,142,822 1,201,796 1,030,038 (797,067} 741,654 9_,319,243 NONOPERATING REVENUE (EXPENSE) Investment revenue 34,771 31,691 21,463 21,674 4, ,534 Interest expense (19,195) (512,126) (151,453) (10,339) (693,113) Gain on disposal of property 54,846 3,800 58,646 Other, net 222,894 55,093 40,084 12,460 94, ,897 Total nonoperating revenues (expense) 293,316 (425,342) (89,906) 23, ,101 (95,036) INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 776, ,132 (773,272) 844,755 9,224,207 CAPITAL CONTRIBUTIONS Capital grants and contributions 64, , , ,342 92,000 1,536,550 Impact fees 345,831 Total capital contributions 1,882,381 TRANSFERS OUT (9,316,751 ) (600,000) (9,916,751) CHANGE IN NET POSITION (1,816,087) 985,855 (21,930) 936,755 1,189,837 NET POSITION, beginning of year, previously reported 21,297,471 2,720,102 16,855,740 20,226,760 5,316,081 66,416,154 Restatement (Note 14) (1,544,059) (223,515) (104,172) (411,450) (379,727) (2,662,923) NET POSITION, beginning of year, as restated 19,753,412 2,496,587 16,751,568 19,815,310 4,936,354 63,753,231 NET POSITION, end of year $ 17,937,325 $ 3,601,831 $ 17,737,423 $ 19,793,380 $ 5,873,109 $ 64,943,068 The accompanying notes are an integral part of these financial statements 24

83 STATEMENT OF CASH FLOWS - PROPRIETARY FUND For the year ended September 30,2017 Business Tl'ee Activities Enterprise Funds Electric Water Wastewater Airport Non-major Fund Fund Fund Fund Funds CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers $ 34,895,693 $ 4,712,024 $ 4,619,279 $ 4,113,946 $4,059,269 Payments to suppliers (23,083,907) (1,925,346) (1,833,001) (1,994,509) (1,605,478) Payments for salaries and benefits (2,388,750) (1,194,504) (965,904) Netcash flows from operating aculoiues 9,423, ,933 1,487,887 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers to other funds (9,316,751) (600,000) Increase (decrease) in deposits 111,407 59,139 Net cash Hows from noncapital financing acuioities (9,205,344) (600,000) 59,139 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets, net of related payables (982,706) (109,100) (3,073,512) (1,501,351 ) (864,075) Principal paid on notes, bonds and lease obligations (83,153) (82,845) (153,059) Interest paid on borrowings and other debt costs (19,866) (228,745) (417,712) Proceeds from long-term debt 2,900,000 Proceeds from the sale of assets 54,846 78,320 28,530 3,800 Capital contributions and 1m pact fees rece;"",d, net of change in related receivables 64, ,793 1,033,286 (1,085) Net cash Hows from capital and related financing actiloities (966,353) (20,577) 2,431,935 (861,360) CASH FLOWS FROM INVESTING ACTIVITIES Interest on in"",sted funds 34,771 37,729 21,463 34,134 4,935 Other income 222,894 55,093 40,084 94,366 Net cash flows from in"",sting actiloities 257,665 92,822 61,547 34,134 99,301 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (490,996) 2,051,275 (1,345,565) 3,450, ,828 CASH AND CASH EQUIVALENTS, beginning of year 9,005,565 CASH AND CASH EQUIVALENTS, end of year $ 7,660,000 Re conciliation of ope rating income (loss) to net cas h provided (used) by operating activities: Operating income (loss) $ 7,142,822 $1,201,796 $ 1,030,038 $ (797,067) $ 741,654 Adjustments to reconcile operating income to net cash proloided (used) by operating actiloities: Depreciation expense 935, ,151 1,164,928 1,205, ,548 (Increase) decrease in in"",ntof}' and prepaids (57,390) (21,659) 6, ,534 (Increase) decrease in accounts receivable (801,131) (64,219) (201,401) 4,029 (92,362) Increase (decrease) in accounts payable 1,939,938 (26,223) 88,692 16, ,077 Increase (decrease) in accrued wages and compensated absences 53,227 14,154 29,452 14,710 13,540 Increase (decrease) in OPEB liability and related elements 231,650 60,606 55, ,008 91,962 Increase (decrease) in pension elements (21,772) (7,576) (5,291) (8,532) Increase (decrease) in unearned re"",nue and other 74,849 Net cash flows from operating activities 9,423,036 2,168, ,933 Total $ 52,400,211 (30,442,241 ) (5,974,851) 15,983,119 (9,916,751 ) 170,546 (9,746,205) (6,530,744) (319,057) (666,323) 2,900, ,496 2,058,928 (2,391,700) 133, , ,469 4,390,683 $ 9,319,243 4,510, ,967 (1,155,084) 2,377, , ,559 (43,171) As shown in the Accompanying Financial Statements Equity in cash and in"",stments $ 10,579,999 $ 3,094,052 $ 2,564,893 $2,836,411 $ 3,460,489 Restricted equityln cash and investments 2,625,550 5,735,566 5,095,107 2,900,000 Total cash and cash equivalents $13,205,549 $8,829,618 Noncash financing and Investing activities: Donated land $ $ 22,535,844 16,356,223 The accompanying notes are an integral part of these financial statements 25

84 STATEMENT OF FIDUCIARY NET POSITION - FIDUCIARY FUNDS September 30, 2017 Pension Trust Funds ASSETS Receivables: City and plan members $ 386,847 State of Florida 242,916 Accrued income 102,493 Total receivables 732,256 Prepaid expenses 130,272 Im.estments, at fair value: Short-term money market funds 943,677 Fixed income mutual funds 16,632,637 Equity securities 36,213,768 Total im.estments 53,790,082 Total assets 54,652,610 LIABILITIES Benefits payable 150,964 Total Liabilities 150,964 NET POSITION Restricted for pension benefits $ 54,260,368 The accompanying notes are an integral part of these financial statements 26

85 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION - FIDUCIARY FUNDS For the year ended September 30, 2017 ADDITIONS Contributions: City Plan members State of Florida Total contributions Investment income Less investment expenses: Performance evaluation Custodial fees Investment management fees Total investment expenses Net investment income Total additions DEDUCTIONS Administrative expenses: Legal Administrator fee Actuarial Travel, training and other Accounting Insurance Audit Total administrative expenses Payments to retirees and participants Total deductions CHANGE IN NET POSITION $ Pension Trust Funds 2,624, , ,916 3,335,079 5,778,452 66,875 30,564 83, ,011 5,597,441 8,932,520 34,739 24,850 70,916 18,592 16,465 6,738 13, ,720 3,159,905 3,345,625 5,586,895 NET POSITION, beginning of year NET POSITION, end of year $ 48,673,473 54,260,368 The accompanying notes are an integral part of these financial statements 27

86 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.s. GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing U.S. GAAP for state and local governments through its statements (GASBS) and Interpretations (GASBI). The more significant accounting policies established by GAAP and used by the City are discussed below. A. REPORTING ENTITY The City of Bartow, Florida (the "City") is a municipal corporation governed by a board of five (5) elected commissioners and was established by a special act of the Florida legislature, laws of the State of Florida Chapter , House Bill No As required by GAAP, the financial statements of the reporting entity include those of the City (the primary government) and its component units. The City has one blended component unit, the Bartow Community Redevelopment Agency (the "CRA"). The CRA was created by City Ordinance No pursuant to Chapter 163, Florida Statutes. The CRA is presented in the financial statements of the City as a special revenue fund. The CRA does not issue a separate set of financial statements. These financial statements include the accounts and transactions of the following entities, which do not satisfy the definition of component units because they are not legally separate from the City: City of Bartow Municipal Firefighters' Retirement Trust Fund established pursuant to Florida Statute Chapter 175 and Ordinance No City of Bartow Municipal Police Officers' Retirement Trust Fund established pursuant to Florida Statute Chapter 185 and Ordinance No City of Bartow General Employees' Retirement Plan established pursuant to Ordinance No Related organizations are those legally separate entities for which the City is responsible for appointing the board members or Trustees and for which the City is not otherwise financially accountable. These organizations are not included in the primary government's financial statements as they are not considered to be part of the financial reporting entity. The only entities meeting these criteria are the Bartow Housing Authority (the "Housing Authority") and the Bartow Employees Internal Revenue Code (IRC) Section 457 deferred compensation plan. The Housing Authority is a Corporation established to provide affordable housing. The Bartow Employees I.R.C. 457 Deferred Compensation Trust Fund is a trust fund established solely for the benefit of the plan participants. All record keeping, administration and investing activities are handled by a third-party administrator. B. BASIS OF PRESENTATION The basic financial statements consist of the government-wide financial statements and fund financial statements. 28

87 NOTES TO FINANCIAL STATEMENTS September 3D, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont...) Government-wide Financial Statements - The required government-wide financial statements are the Statement of Net Position and the Statement of Activities, which report information on all of the nonfiduciary activities of the City. The effects of interfund activity have been removed from these statements. The City's fiduciary funds are also excluded from the government-wide financial statements since by definition these assets are being held for the benefit of a third party and cannot be used to fund activities or obligations of the government. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from Business-type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment, including depreciation. The City does not allocate the interest expense of governmental fund debt or indirect costs such as finance, personnel, legal, etc. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Fund Financial Statements - The financial transactions of the City are recorded in individual funds. Each fund is accounted for by providing a separate set of self-balancing accounts that comprises its assets, liabilities, deferred inflows and outflows of resources, fund equity, revenues and expenditures/expenses. The emphasis in fund financial statements is on the major funds in either the governmental or business-type activities categories. GASB Cod. Sec 2200 sets forth minimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category or the governmental and enterprise combined) for the determination of major funds. Each major fund is presented in a separate column and all non-major funds are aggregated and presented in a single column. The City's fiduciary funds are presented in the fund financial statements by type (pension trust funds only) but as noted above are not included in the government-wide statements. Funds are classified into three categories: governmental, proprietary and fiduciary. The funds used by the City are as follows: Governmental Funds: The focus of the governmental funds' measurement (in the fund statements) is upon determination of financial position and changes in financial position (sources, uses, and balances of financial resources) rather than upon net income. The following is a description of the governmental funds of the City. Reported as Major Funds: General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. 29

88 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont...) Bartow Community Redevelopment Agency (the "CRA") was created by City Ordinance No A pursuant to Florida Statutes chapter 163. In order to comply with the audit requirements of Section (8), Florida Statutes, the City electively added the Bartow CRA as a major fund. The purpose of the CRA is to eliminate and prevent the spread of blight throughout the redevelopment area pursuant to the City of Bartow City Commission findings of blight, Chapter 163, Part III, of the Florida Statutes (The Florida Community Redevelopment Act) and the City of Bartow Community Redevelopment Plan adopted by the City of Bartow City Commission. The CRA receives the incremental ad valorem taxes generated in future years by the increase in property values in the redevelopment area. The CRA's property taxes are levied under the taxing authority of the City and are included as part of the City's total tax levy. The CRA's Board members consist of seven citizens appointed by the City Commission. Reported as Non-Major Governmental Funds: Transportation Fund is a special revenue fund of the City. It is used to account for all transportation revenues and the related expenses incurred for street and road construction, maintenance and repair. Fire Service Fund is a special revenue fund used to account for the proceeds of the City's fire services assessment and the cost of providing fire services to area residents. Proprietary Funds: The focus of proprietary fund measurement is upon determination of operating income, changes in net position, financial position, and cash flows. The generally accepted accounting principles applicable are those similar to businesses in the private sector. The following is a description of the proprietary funds of the City. Reported as lviajor Enterprise Funds: Electric Fund is used to account for operations associated with providing electric service to its customers inside and outside the City. The Electric Fund is a distribution utility, with no significant power generation assets. Water Fund is used to account for the operations associated with potable water supply, treatment, transmission and distribution services to area residents. Wastewater Fund is used to account for the operations associated with sewer collection, treatment and disposal services to area residents. Airport Fund is used to account for the operations associated with the costs and revenues of the Bartow Municipal Airport Development Authority. 30

89 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont...) Reported as Non-Major Enterprise Funds: Sanitation Fund is used to account for the operations associated with solid waste collection and disposal services for the residents of the City. Information Technology is used to account for the operations associated with fiber optic installation and broad band services to area residents. Stormwater Fund is used to account for the operations associated with the collection and distribution of stormwater. Fiduciary Funds: Fiduciary Funds are used to report assets held in a trustee or agency capacity for others and therefore are not available to support City programs. The reporting focus is on net position and changes in net position and are reported using accounting principles similar to proprietary funds. The City's fiduciary funds are presented in the fiduciary fund financial statements by type. Since by definition these assets are being held for the benefit of a third party (other local governments, private parties, pension participants, etc.) and cannot be used to address activities or obligations of the government, these funds are not incorporated into the government-wide statements. Pension trust funds are the only fiduciary fund type of the City. The City has three Pension Trust Funds which accumulate resources to provide retirement benefits to City employees. The three pension trust funds are the Police Officers' Retirement Trust Fund, Firefighters' Retirement Trust Fund, and the General Employees' Retirement Plan Pension Trust Fund. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The government-wide financial statements, the proprietary fund financial statements and the 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 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 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of longterm debt and acquisition under capital leases are reported as other financing sources. Property taxes, franchise and public service taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual as revenue of the current period. 31

90 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (conl) 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). All other revenue items are considered to be measurable and available only when cash is received by the government. Imposed nonexchange resources (property taxes, fines) are reported as deferred inflows if received before the tax is levied or before the date when use is first permitted. Government mandated nonexchange transactions and voluntary nonexchange transactions are reported as liabilities until the eligibility requirements (excluding time requirements) are met and as deferred inflows if received before time requirements are met and all other eligibility requirements have been satisfied. Proprietary fund operating revenues generally result from producing or providing potable water and wastewater collection, treatment and disposal services to area residents. Operating expenses for these operations include all costs related to providing the service or product. These costs include billing and collection, personnel and purchased services, repairs and maintenance, depreciation, materials and supplies, and other expenses directly related to costs of services. All other revenue and expenses not meeting these definitions are reported as nonoperating revenues and expenses. D. ASSETS, LIABILITIES, DEFERRED OUTFLOWSIINFLOWS OF RESOURCES AND NET POSITION/FUND BALANCE CASH AND CASH EQUIVALENTS - The City maintains a central pooled cash account that is used by all operating funds of the City. In addition, deposits and investments are separately held by certain enterprise funds and the pension trust funds. Interest income earned in the pooled cash and investments account is allocated to the individual funds based on their respective monthly balances. Each fund's equity in pooled cash is recorded on its respective balance sheet in the caption "equity in pooled cash and cash equivalents." Amounts, if any, reported as deficits in pooled cash do not represent actual overdrawn balances in any bank account, but merely report a negative cash balance in the particular fund. The financial statement caption "equity in pooled cash and cash equivalents" includes all deposits with banks and financial institutions including certificates of deposit and all highly-liquid investments (with original maturities of three months or less), including repurchase agreements, short-term commercial paper and investments in state pools. INVESTMENTS - Securities owned are reported at their quoted market value. Investments in pooled accounts, such as certain of the pension fund investments and the state pools are reported at fair value based on market prices provided by the money managers. Purchases and sales of investments are reflected on trade dates. Net realized gains or losses on sales of investments are based on the cost of investments applied on a first-in, first-out basis and are reflected in current operating results. CUSTOMER ACCOUNTS RECEIVABLE - The City accrues unbilled service of its enterprise funds representing the estimated value of service from the last billing date to year-end, which totaled $2,241,905 at September 30, A reserve for doubtful accounts is maintained in each fund equal to the value of the customer receivables that are not expected to be collected. As of September 30, 2017, business-type activities and governmental activities reserves for doubtful accounts totaled $388,610 and $395,122, respectively. Receivables are reported in the financial statements net of the reserve for doubtful accounts. 32

91 !'JOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont...) NOTES RECEIVABLE - In the Community Redevelopment Agency, represents loans to property owners to fund property improvements and are secured by first mortgage liens on the related properties with payment terms extending to six years. In some cases, the notes will be forgiven if certain conditions are met by the property owner. Certain of the loans are non-interest bearing and have been discounted to reflect a 5% annual interest rate which is being amortized to income over the life of the related loans. There was no discount amortization for The notes, which have a face value of $420,640, are reduced by an allowance representing management's estimate of uncollectible amounts which totaled $418,140 at September 30, 2017 resulting in a carrying value of $2,500 at September 30, INTERFUND RECEIVABLES AND PAYABLES To the extent any interfund balances exist, management anticipates they will be settled in cash as opposed to a permanent transfer. INVENTORIES - Inventories in governmental and enterprise funds consist of expendable supplies held for consumption and are recorded at the lower of cost or market computed on an average cost basis. PREPAID ITEMS - 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. The Cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. CAPITAL ASSETS -In the government-wide financial statements, capital assets include land, buildings, improvements, utility plant, furniture, equipment, and infrastructure assets (e.g., roads, sidewalks, streets, and drainage systems) with an individual cost of $5,000 or more and an estimated useful life in excess of one year. Such assets are recorded at historical cost, if purchased, and at fair market value at date of gift, if donated. Major additions are capitalized while maintenance and repairs which do not improve or extend the life of the respective assets, are charged to expense. In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the government-wide statements. Capita! asset depreciation is recognized using the straight-line method over the estimated useful lives as follows: Asset Type Utility plant in service Buildings and improvements Machinery and equipment Infrastructure ~

92 NOTES TO FINANCIAL STATEMENTS September 3D, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont...) INTEREST COSTS - Interest costs are capitalized when incurred on debt the proceeds of which were used to finance the construction of enterprise fund capital assets. Interest earned on proceeds of taxexempt borrowing arrangements restricted to the acquisition of qualifying assets is offset against interest costs in determining the amount to be capitalized. No interest cost was capitalized for the year ended September 30, RESTRICTED ASSETS Include cash, investments and other assets that are legally restricted to specific uses by law or contract. The customer restricted assets are reported in the water fund and sewer fund and represent unpaid impact fees due the City. The City generally uses restricted resources first when an expense is incurred for which both restricted and unrestricted resources are available. DEFERRED OUTFLOWSIINFLOWS OF RESOURCES - In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until that time. The City has three items that qualifies for reporting as deferred outflows of resources. The first item is the deferred outflows related to pensions. The deferred outflows related to pensions are an aggregate of items related to pensions as calculated in accordance with GASB Cod. Sec. P20 and will be recognized as either pension expense or a reduction in the net pension liability in future reporting years. The second item is a deferred charge on refunding that results from the difference in the carrying value of a refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The third item is deferred outflows related to OPEB (other-post employment benefits). The deferred outflows related to OPEB are an aggregate of other-post employment benefit items as calculated in accordance with GASB Cod. Sec. P52 and will be recognized as either OPEB expense or as a reduction in the other-post employment benefits liability. In addition to liabilities, the statement of net position will sometimes report a section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applied to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two items that qualify for reporting as deferred inflows of resources. The first item of deferred inflows of resources is reported in the governmental funds balance sheet and represents unavailable revenues that were not received within 60 days of year-end. This type of deferred inflows only arises under the modified accrual basis of accounting. The second item is deferred inflows related to pensions. The deferred inflows related to pensions are an aggregate of items related to pensions as calculated in accordance with GASB Cod. Sec. P20 and will be recognized as a reduction to pension expense in future reporting years. 34

93 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont...) LONG-TERM OBLIGATIONS - In the government-wide financial statements and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the bonds outstanding method. Debt issuance costs are reported as an expense in the period incurred. Bond premiums and discounts are reported, net of amortization, in the related debt balances shown in the financial statements. For current refundings and advance refundings resulting in defeasance of debt reported by governmental activities, business-type activities, and proprietary funds. the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow of resources and recognized as a component of interest expense over the remaining life of the old debt or the life of the new debt, whichever is the shorter. Long-term debt for governmental funds is not reported as liabilities in the fund financial statements; rather the debt proceeds are reported as other financing sources and payments of principal and interest are reported as expenditures. COMPENSATED ABSENCES - The City personnel policy provides for the payment of accrued vacation and sick pay upon separation of its employees. The liability for these compensated absences is recorded as incurred in the government-wide and proprietary fund financial statements. A liability for those amounts is recorded in the governmental funds only if the liability has matured because of employee resignations, terminations or retirements. INTERFUND TRANSFERS - Permanent reallocation of resources between the funds of the City is classified as interfund transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide financial statement presentation. CONNECTION FEES AND IMPACT FEES - Water and wastewater connection fees represent reimbursement of the costs incurred to perform the connection of the respective utilities and are recorded as operating revenue when received. Impact fees, which are not considered connection fees since they substantially exceed the cost of connection, are recorded as capital contributions when received. Impact fees receivable are reduced by an allowance for estimated uncollectible amounts when management believes collectability is doubtful. ON-BEHALF PAYMENTS FOR FRINGE BENEFITS - The City receives on-behalf payments from the State of Florida to be used for Municipal Police Officers' Pension Plan and Municipal Firefighters' Pension Plan contributions which totaled $144,854 and $98,062, respectively, for the fiscal year ended September 30, Such payments are recorded as intergovernmental revenue and public safety expenses/expenditures in the government-wide and general fund financial statements but are not budgeted and therefore are not included in the general fund budgetary basis financial statements. PENSION COSTS The actuarially determined provision for pension costs is recorded on an accrual basis in the period for which the costs pertain, and the City's policy is to fund pension costs as they accrue. INDIRECT COST ALLOCATION - The City allocates charges for indirect services provided by General Fund departments based on a cost allocation plan. The costs are included in the program expense reported by functional activity in the Statement of Activities. 35

94 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNriNG POLICIES (cont...) EQUITY CLASSIFICATIONS- Government-wide Statements The difference between (a) assets and deferred outflows of resources and (b) liabilities and deferred inflows of resources is classified as net position and displayed in three components: Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted net position - Consists of net position with constraints placed on their use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. Unrestricted net position - Consists of the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position. At September 30,2017, the governmental activities had a deficit unrestricted net position of $8,503,121. When both restricted and unrestricted net position is available for use, it is the City's policy to use restricted net position first, and then unrestricted net position as they are needed. In the fund financial statements, proprietary fund equity is classified the same as in the government-wide statements. Fund Statements - The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor the constraints on the specific purposes for which amounts in those funds can be spent. Spendable resources are to be shown as restricted, committed, assigned and unassigned as considered appropriate in the City's circumstances. The following classifications describe the relative strength of the spending constraints: Nonspendable - This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. The City has inventories, prepaid items and notes receivable as being non-spendable as these items are not expected to be converted to cash. Restricted - This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. The City has classified debt service balances and impact fees as being restricted because their use is restricted by State Statute and/or local ordinance. Debt service resources are to be used for future servicing of the revenue note and are restricted through debt covenants. The City also has restricted unexpended gas taxes in the transportation fund and the unexpended community development resources of the Community Redevelopment Agency. 36

95 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded) Committed - This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the City Commission. These amounts cannot be used for any other purpose unless the City Commission removes or changes the specified use by taking the same type of action (ordinance or resolution) that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. The City did not have any committed resources as of September 30, Assigned - This classification includes amounts that are constrained by the City's intent to be used for a specific purpose but are neither restricted nor committed. This intent can be expressed by the City Commission or through the City Commission delegating this responsibility to the City Manager through the budgetary process. This classification also includes the remaining positive fund balance for all governmental funds except for the General Fund. Unassigned - all other spendable amounts. USE OF ESTIMATES - The preparation of the basic financial statements in conformity with generally accepted accounting principles, as applicable to government entities, requires management to make use of estimates that affect the reported amounts in the basic financial statements. Actual results could differ from estimates. NOTE 2 - PROPERTY TAX CALENDAR Under Florida Law, the assessment of all properties and the collection of all county, municipal and school board property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector. The tax levy of the City is established by the City Commission prior to October 1 of each year and the Polk County Property Appraiser incorporates the millages into the total tax levy, which includes the municipalities, the County, independent districts and the County School Board tax requirements. State statutes permit cities to levy property taxes at a rate of up to 10 mills. The City's millage rate in effect for the fiscal year ended September 30,2017 was All taxes are due and payable on November 1 (levy date) of each year and unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for early payment as follows: 4% in of November, 3% in December, 2% in January, 1% in February. The taxes paid in lijiarch are without discount. Delinquent taxes on real and personal property bear interest of 18% per year. On or prior to June 1 following the tax year, certificates are sold for all delinquent taxes on real property. 37

96 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 3 - BUDGETARY LAW AND PRACTICE The budget is adopted by Resolution on a City-wide basis for all City funds on or before October 1 of each year as required by State Statute. City Ordinance establishes the legal level of budgetary control as set forth below: Adjustment of Appropriations: Supplemental appropriations - If during the fiscal year the City Manager certifies that there are available for appropriation revenues in excess of those estimated in the budget, the City commission may make supplemental appropriations for the year up to the amount of such excess. Prior to making such supplemental appropriations, the City Commission shall advertise and hold a public hearing on the supplemental appropriations, in the manner prescribed for the public hearing on the budget, and shall follow such other procedures outlined for adoption of the budget in making supplemental appropriations as may be applicable. Reduction of appropriations - If at any time during the fiscal year the City Manager shall ascertain that the available income for the year will be less than the total appropriations, he shall reconsider the work programs and allotments of the various offices, departments, and agencies and revise the allotments so as to forestall the making of expenditures in excess of such income. Transfer of appropriations At any time during the fiscal year, the City Manager may transfer part or all of any unencumbered appropriation balance within a department, office or agency; provided, that no transfer of appropriations to the personal services account shall be made without approval of the City Commission. Upon written recommendation by the City Manager, the City Commission may by resolution transfer part or all of any unencumbered appropriation balance from one department, office or agency, to another. Limitations; effective date - No appropriation for debt service may be reduced or transferred, and no appropriation may be reduced below any amount required by law to be appropriated or by more than the amount of the unencumbered balance thereof. Lapse of unencumbered appropriations - All appropriations shall lapse at the end of the fiscal year to the extent that they shall not have been expended or lawfully encumbered. All final budget amounts presented in the accompanying supplementary information have been adjusted for legally authorized amendments. NOTE 4 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Compliance with Finance Related Legal and Contractual Provisions - the City had no material violations of finance related legal and contractual provisions. Deficit Fund Balance or Net Position of Individual Funds - As of September 3D, 2017, no individual fund had a deficit fund balance or net position deficit. Excess of Expenditures Over Budget Appropriations in Individual Funds For the year ended September 3D, 2017, no budgetary fund had an excess of expenditures over appropriations. 38

97 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 5 - DEPOSITS AND INVESTMENTS DEPOSITS IN FINANCIAL INSTITUTIONS - Municipalities in Florida are required by State Statute Chapter "Security for Public Deposits Act", to deposit operating funds only with financial institutions who are members of the State of Florida collateral pool ("qualified public depositories"). The State of Florida collateral pool is a multiple financial institution collateral pool with the ability to make additional assessments to satisfy the claims of governmental entities if any member financial institution fails. This ability provides protection which is similar to depository insurance. The captions on the government-wide statement of net position for "equity in pooled cash and cash equivalents" and "investments", both restricted and unrestricted, are comprised of the following: Equity in pooled cash and cash equivalents: Cash on hand Cash deposits in financial institutions. Insured or fully collateralized bank deposits Inves tments: Florida Safe - investment pool Total equity in pooled cash and cash equivalents Investments: U.S. Government Agencies $ 9,275 61,323, ,482 $ 61,845,043 $ 896,182 The "Florida Safe" investment pool is similar to a money market investment in that it strives to maintain a net asset value of $1.00 per share. The pool is rated AAAm by Standard and Poors and the weighted average maturity of the underlying securities is not available, but the fund's policy is to stay below 60 days. The Florida I nvestment Pool is not exposed to custodial credit risk because the investments are not evidenced by securities that exist in physical or book entry form. The City also had investments in debt securities of the Federal Home Loan Mortgage Corporation, a U.S. Government agency. 39

98 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 5 - DEPOSITS AND INVESTMENTS (cont... ) INVESTMENTS - The types of investments that the City may invest are governed by the City's investment policy which sets forth the following allowable investments and certain other specific criteria related to maximum permitted concentrations, maturities (interest rate risk), and minimum credit quality ratings (credit risk): Lowest Maximum Maximum Permitted Portfolio Maximum Issuer S&P Authorized Im,estments Concentration Maturit~ Concentration Rating Florida Local GO\emment Surplus Funds Trust Fund 100% U. S. GO\emment securities 100% 5 years U. S. GO\emment Agency securities 50% 5 years 25% Federal Instrumentalities securities 80% 5 years 40% Non-negotiable interest bearing deposits in qualified public depositories 20% 2 years 15% Repurchase agreements 102% secured by securities of the U. S. GO\emment its Agencies or Instrumentalities 50% 90 days 25% Commercial paper of any U. S. company 25% 270 days 15% A-1 Corporate notes of any U. S. company 15% 2 years 5% AA Bankers Acceptances 25% 180 days 10% A-1 State or local go\emment obligations 20% 3 years AA Mutual funds (registered in\estment companies) 50% 90 days 25% AAA Intergo\ernmental in\estment pools 20% All of the City's investments were held in the City's name. Information concerning credit risk and interest rate risk for the City's investments at September 30, 2017 is presented below: A\ierage In\iestment Type Primary government U.S. GO\iernment Agencies S&P Rating AA+ $ Fair Value 896,182 Maturity Years 3.40 The City categorizes its fair value measurements within the fair value hierarchy established by GASB Cod. Sec The hierarchy is based on the valuation inputs used to measure fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. 40

99 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 5 - DEPOSITS AND INVESTMENTS (cont... ) The City's investments have the following carrying values as of September 30, 2017, based on measurement criteria as specified: U.s. Government P{jencies Total investments Fair Value $ 896,182 $ 896,182 Level 1 $ Amortized Cost The City's pension trust funds also held investment securities during the year and at September 30,2017, which are reported at fair value. The City's pension trust funds have the following carrying values as of September 30, 2017, based on the measurement criteria as specified: General Employees' Retirement Plan Pension Trust Fund: Fair Level 1 Investments at fair value Short-tenn money market $ 811,791 $ $ Fixed income investments 6,525,274 Real estate investment fund 100,524 Equity investments 15,329,294 Total investments byfairvalue level 22,766,883 $ Investments measured at the net asset value (NAV) Real estate fund 3,030,991 Total investments $ 25,797,874 Level 2 6,525,274 12,807,113 19,332,387 $ Level 3 Amortized Cost $ 811,791 $ 811,791 The General Employees' Pension Plan owns shares in a real estate investment fund which is a pooled investment fund that is a broadly diversified core real estate fund that reports its value at the net asset value (NAV) per share. The real estate investment fund allows a redemption frequency quarterly and requires a ten-day redemption notice. All investments of the real estate trust fund are appraised by an independent third-party, MAl appraiser each and every quarter, commencing the quarter after the investment is made. Police Officers' Retirement Trust Fund: Investments at fair value Short-term money market Inflation protected bond funds U.S. Government and agencies Corporate and foreign obligations Fixed income mutual funds Equity investments Equity mutual fund Total investments $ Fair Value 89, ,500 2,460,097 3,012, ,612 3,762,656 Amortized $ $ $ $ 89,071 $ 614,500 2,460,097 3,012, ,612 3,762,656 7,707,216 $ 12,285,484 41

100 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 5 - DEPOSITS AND INVESTMENTS (cont... ) Firefighters' Retirement Trust Fund: Investments at fair value Short-term moneymarket Inflation protected bond funds Fixed income investments Equity investments Total investments $ Fair 42,815 $ 52,500 3,152,487 3,152,487 $ Level 3 Amortized Cost $ $ 42,815 $ 52,500 $ 95,315 Equity investments and investments in mutual funds are valued using Level 1 inputs consisting of using prices quoted in active markets for identical securities. Government bonds, government asset backed securities and other fixed income investments are valued using Level 2 inputs consisting of quoted prices for similar assets; interest rates and yield curves at commonly quoted intervals; implied volatilities; credit spreads and market corroborated inputs. Information related to each Plan's investment policy, and the custodial, concentration and interest rate risk for each plan is set forth below. General Employees Retirement Plan Pension Fund - The types of investments in which the Plan may invest are governed by City policy which authorizes investment in the following instruments: federallyinsured depositories, direct or guaranteed obligations of the United States; stocks, commingled funds, mutual funds, bonds or other evidences of indebtedness issued by a U.S. Corporation or any state or territory of the United States; structured mortgage products issued by the U.S. Government or government agency; mortgage related or asset backed securities not issued by the U.S. Government, government agency or instrumentally; bonds issued by municipal issuers, real estate and foreign securities. No more than 70%, at market value, of the Plans assets can be invested in equity securities nor more than 5% in anyone issuer. Fixed income securities must be investment grade except 20% can be invested in securities not meeting these criteria and must have a minimum total portfolio weighted average credit rating of nan by Standard and Poors or Moodys and no more than 3% of the fixed income portfolio in anyone single corporate issuer. Foreign securities cannot exceed 25% of the total value at market value. All the Plans investments were held in the Plan's name. Information concerning the Plan's fixed income investments are presented below: Investment Type Short-term money market S&P Rating AA+ Fair Value $ 811,791 Average Maturity Years 0.0 Fixed income investments: U.S. Government obligations U.S. Government mortgaged-backed securities Commercial mortgage-backed securities Corporate and foreign bonds AA+ AA+ AA to BBB- AAA+ to BB 668,688 1,866, ,

101 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 5 - DEPOSITS AND INVESTMENTS (cont... ) Police Officers' Retirement Pension Trust Fund - The types of investments in which the Plan may invest are governed by City Ordinance which authorizes investments in the following instruments: interest-bearing time deposits and savings accounts in federally-insured depositories, direct or guaranteed obligations of the United States and the State of Israel; stocks, commingled funds, mutual funds, bonds or other evidences of indebtedness issued by a U.S. Corporation, except that up to 25% may be invested in foreign securities. No more than 65% of the Plan's assets, at market, can be invested in equity securities nor more than 5% in anyone issuer. All of the Plan's investments were held in the Plan's name. Information concerning Plan's fixed income investments, is presented below A\terage S&P Fair Maturity In\testment T~ee Rating Value Short-term money market Not Rated $ 89, Fixed income in\testments: U.S. Go\temment obligations AAA 645, U.S. Go\temment mortgaged-backed securities AAA toaa+ 1,679, U.S. Go\ternment mortgaged-backed securities Not Rated 135, Inflation protected bond mutual fund Not Rated 614, Other mutual funds Not Rated 815, Corporate and foreign bonds AAA to BBB+ 3,012, $ 6,902,376 Firefighters' Retirement Pension Trust Fund - The types of investments in which the Plan may invest are governed by City Ordinance which authorizes the Plan to invest in the following instruments: annuity or life insurance contracts, interest-bearing time deposits and savings accounts in federally-insured depositories, direct or guaranteed obligations of the United States and the State of Israel; stocks, commingled funds, mutual funds, bonds or other evidences of indebtedness issued by a U.S. Corporation, except that up to 25% may be invested in foreign securities. No more than 65% of the Plans assets, at cost, can be invested in equity securities nor more than 5% in anyone issuer. All of the Plan's investments were held in external investment pools or in the name of the Plan and therefore, were not subject to the custodial credit risk disclosures. No single issuer comprised 5% or more of the plan's investments and therefore the plan is not subject to the concentrations of credit risk disclosures. Information concerning the Plan's fixed income investments is presented below: A\terage S&P Fair Maturity In\testment T~ee Rating Value Years Short-term money market Not Rated $ 42, Fixed income mutual funds: Inflation protected bond mutual fund Not Rated 52, Vanguard Inflation Protected Securities Fund Not Rated 346, Dodge & Cox Income Fund Not Rated 2,806, $ 3,204,987 43

102 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 6 - CAPITAL ASSETS Capital assets activity for the year ended September 30, 2017, was as follows: Balance October 1, 2016 Transfers Increases Decreases Governmental Activities: Capital assets, not being depreciated: Land $ 4,071,881 $ $ 588,900 $ Infrastructure - land 1,588,213 Construction in process 110,291 Total capital assets, not being depreciated 699,191 Capital assets, being depreciated: Buildings and Irrprovements 14,998,902 (72,931) Equipment 6,935,686 72, ,026 (417,672) Infrastructure: Road netw ork 26,372, ,918 Sidewalk network 12,024 Total capital assets, being depreciated 51,844, ,968 (417,672) Less accumulated depreciation for: Buildings and irrprovements (8,274,154) 72,931 (580,819) Equipment (5,525,188) (72,931) (542,402) 417,672 Infrastructure: Road netw ark (18,155,876) (375,397) Sidewalk network (2,362,609) (33,347) Total accumulated depreciation (34,317,827) (1,531,965) 417,672 Total capital assets being depreciated, net 17,526,335 (1,056,997) Governmental activities capital assets, net $23,187,620 $ (357,806) Balance September 30, 2017 $ 4,660,781 1,588, ,482 6,360,476 14,925,971 6,836,971 26,589,792 51,901,458 (8,782,042) (5,722,849) (18,531,273) (2,395,956) (35,432,120) 16,469,338 $ 22,829,814 Bus ines s -tll!l!i! activities: Capital assets, not being depreciated: Land $ 1,662,582 $ $ $ Construction-In-progress 2,769,074 (4,997,252) 3,527,222 (106,849) Total capital assets, not being depreciated 4,431,656 (4,997,2521 3,527,222 (106,849) Capital assets, being depreciated: Buildings, utility plant and Irrprovements 126,607,401 4,997,252 1,004,763 Equipment 10,720,682 1 (417,657) Total capital assets, being depreciated 137,328,083 4,997,252 (417,657) Less accumulated depreciation (76,576,883) (4,510,825) 417,657 Total capital assets being depreciated, net 60,751,200 (1,847,322) Business-type activities capital assets, net $ 65,182,856 $ $1,679,900 $ 1,662,582 1,192,195 2,854, ,609,416 11,961, ,571,181 (80,670,051 ) 63,901,130 $ 66,755,907 44

103 !\JOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 6 - CAPITAL ASSETS (concluded) Depreciation expense was charged to the following programs and functions: Governmental Activities: General government Library Law enforcement Fire control Building and zoning Public works Transportation Parks and recreation Community redevelopment Total depreciation expense - governmental activities $ 55,442 53, , ,235 1,740 18, , ,416 Business-type Activities: Electric Water Wastewater Airport Sanitation Information Technology Stormwater Total depreciation expense - business-type activities $ 935, ,151 1,164,928 1,205, ,014 71,067 45

104 NOTES TO FINANCIAL STATEMENTS September 3D, 2017 NOTE 7 - LONG-TERM OBLIGATIONS The following is a summary of changes in long-term obligations for the year ended September 30, 2017: Balance October 1, Balance Am::Junts 2016 SepteJTber 30, CUe within (restated) Increases Decreases 2017 One Year Governmental Activities: Long-term debt: BB& T Refunding Series 2014-A $ 2,606,243 $ $ (263,999~ $ 2,342,244 $ 267,068 Total long-term debt 2,606,243 ( ) 2,342, ,068 Other liabilities: Estimated workers corrpensation claims 707,554 (21,740) 685,814 other post errployrrent benefits 15,980,574 3,531,859 19,512,433 Net pension liability 11,262, ,789 11,544,778 Corrpensated absences 1,302,846 22,241 Total other liabil~ies 29,253,963 3,835,889 (21,740) Total long-term obligations $ 31,860,206 $ 3,835,889 $ (285,739) Less am::junts due in one year Total noncurrent obligations due in m::jre than one year Business-tlme Activities: Long-term debt: BB&TRefunding Series 2014-A $ 1,638,754 $ $ (165,999) $ 1,472,755 $ 167,929 SRF Construction Loan (No. WvV755040) 5,785,514 (329,212) 5,456, ,529 SRF A-econstruction Loan (No. WvV75504p) 1,308,104 (88,499) 1,219,605 90,367 Water and sewer, Series ,135,000 19,135,000 1,290,000 Airport Revenue Note, Series 2017A 2,900,000 2,900, ,000 Total bonds and notes payable 27,867,372 2,900,000 (583,71Ol 30,183,662 2,088,825 Other liabilities: other post errployrrent benefits 5,720,586 1,289,713 7,010,299 Net pension liability 3,193,178 35,848 3,229,026 Corrpensated absences 777, , , ,981 Total other liabilities 9,691,533 1,432, , ,981 Total long-term liabilities $ 37,558,905 $ 4,332,448 $ (583,710) ,643 $ 2,217,806 Less am::junts due in one year (2.217,806) Net long-term liabilities in excess of one year $ 39,089,837 Notes to Long-Term Obligations Table Long term liabilities, including accumulated compensated absences are typically liquidated by the individual fund to which the liability is directly associated. The previously reported October 1, 2016 balances of the governmental activities' other post-employment benefit liability was increased by $8,907,470 and the business-type activities' other post-employment benefit liability was increased by $2,662,923. The restatement was a result of implementation of GASB Statement 75. See Note 14 for more information. Interest Included as Direct Expense: None of the interest on governmental activities long-term debt has been included in the direct expenses of any of the various programs. 46

105 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 7 - LONG-TERM OBLIGATIONS (con!...) Governmental and Business-Type Activities: BB & T Refunding Series 2014-A, par value $4,665,000, is secured by all non-advalorem revenues of the City. essentially all legally available revenues of the City except taxes on real and personal property. The bonds were issued May 16,2014 to advance refund the Florida Municipal Loan Council Series 2005A and 2005D bonds. The 2014-A bonds bear interest at 2.4% payable semi-annually on June 1 and December 1 with principal payments annually on June 1 and a final maturity on June 1, 2025.The Florida Municipal Loan Council Revenue Bonds. Series 2005D were paid off in 2016 and were originally issued in The 2005A bonds bore interest at 4.00% and the 2005D bonds bear interest at 4.06%. Business-Type Activities: Water and Sewer Refunding Revenue Bank Loan, Series These bonds were issued September to refund the Water and Sewer Revenue Bonds. Series The bonds bear interest at 2.08% payable semiannually October 1 and April 1 with a final maturity on October i The Series 2016 bonds are secured by a senior lien on the net revenues of the water and sewer systems and require the maintenance of a principal and interest sinking fund. The Series 2016 bonds also require $1.928,239 of the bond proceeds to be placed in a construction fund account to be used on system improvements within a three-year period beginning on September 22,2016. As of September 30, the City has $1.928,239 in the construction fund account and this amount is reported as a component of restricted equity in pooled cash and cash equivalents in the water fund and business-type activities. SRF Loans - These loans are from the State of Florida Revolving Loan Program ("SRF") to fund pre-construction costs and construction of improvements to the wastewater systems. Agreement No. WW75504P bears interest at 2.38%. Agreement No. WW bears interest at 1.97%. Both loans are payable semi-annually as to principal and interest of each year with the final payment due August The loans are secured by a junior lien on the net revenues of the water and sewer systems. Airport Revenue Note. Series 2017A - The City entered into a loan agreement with BB&T, a North Carolina banking corporation, on August 15, 2017 relating to the issuance ofthe Airport Revenue Note. Series 2017A (the "Note") in the amount of $ The Note was issued to fund transportation improvements at the Bartow Airport. The Note bears interest at 2.79% with principal due monthly beginning on October 1, 2017 through maturity on July i Contemporaneously with the issuance of the Note. the City of Bartow entered into an interlocal agreement with the Bartow Municipal Airport Authority. The interlocal agreement authorizes the pass-through of the Note proceeds from the City of Bartow to the Bartow Municipal Airport Authority in exchange for the Bartow Municipal Airport Authority's pledge to use the proceeds to complete the transportation improvement project and to pay the debt service on the Note solely from the Bartow Municipal Airport Authority's revenue from fuel sales. 47

106 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 7 ~ LONG~TERM OBLIGATIONS (cont... ) Maturities: Annual requirements to repay all long-term debt as of September 30,2017, were as follows: Governmental Activities Business-type Activities Fiscal Year Ending Principal Interest Principal Interest 2018 $ 267,068 $ 56,682 $ 2,088,825 $ 648, ,278 50,219 2,139, , ,417 43,533 2,177, , ,626 36,698 2,223, , ,696 29,641 2,257, , ,159 45,464 11,531,504 1,506, ,766, ,511 Total $ 2,342,244 $ 262,237 $ 30,183,662 $ 4,570,664 Pledged Revenues: The City has pledged certain future revenues, net of operation and maintenance expenses, for payment of debt. The following table provides a summary of the pledged revenues for the City's outstanding debt issues for which specific revenues have been pledged: Pledged Re\, nue Re\, nue Pledged Through Total Principal and Interest Outstanding Current Year Principal and Interest Paid Percentage of Net Re\, nues to Current Year Principal and Net Re\, nue Interest Paid Water and sewer re\, nue 8/15/2031 $ 29,597,376 $ 779,756 $ 4,367, % 48

107 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 8 - INTERFUND TRANSACTIONS Interiund receivables and payables as of September 30, 2017, consisted of: Receivable Fund Payable Fund Community Redevelopment General fund Agency $ Amount 104,796 Interiund transfers in (out) for the year ending September 30,2017, consisted of: Receiving Fund Paying Fund Amount General fund Electric fund $ 9,316,751 General fund Wastewater fund 600,000 Fire Services fund General fund 1,514,327 Fund-level interfund transfers 11,431,078 Eliminated in combining governmental activities {1,514,327} Combined government-wide total $ 9,916,751 49

108 NOTES TO FINANCIAL STATEMENTS September 3D, 2017 NOTE 9 - PENSION TRUST FUNDS Plan Descriptions - The City of Bartow contributes to three single-employer defined benefit pension plans: the General Employees Retirement Plan ("GE Plan"), the Police Officers' Retirement Trust Fund ("Police Plan"), and the Municipal Firefighters' Retirement Trust Fund ("Fire Plan"). Each plan provides retirement and disability benefits to plan members and beneficiaries. The plans are established by City Ordinance and the benefits and contribution requirements can be amended by the City Commission through ordinance. All three plans are administered by separate boards of trustees who are either appointed by the City Commission or elected by the plan members. It is the City's policy to annually fund the annual required contribution amount for each plan. Contributions are also provided to the Firefighters' and Police Officers' plans by the State of Florida from a tax collected on insurance premiums. Each plan issues a publicly available financial report that includes financial statements and required supplementary information (RSI) for that plan. Those reports may be obtained by contacting the City of Bartow Finance Department, 450 North Wilson Avenue, Bartow, FL In the government-wide and proprietary statement of net position, liabilities are recognized for the City's share of each defined benefit pension plan's net pension liability. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense. information about the fiduciary net position of the City's sponsored single employer plans and additions to/deductions from the City's sponsored single employer plans have been determined on the same basis as they are reported by the City's sponsored single employer plans. For this purpose, defined benefit payments (including refund of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Benefits Provided - The City's pension plans provide retirement and disability benefits. Benefits for members of all plans vest after six years of credited service. Retirement benefits are calculated based upon a certain percentage of average earnings for the highest five consecutive years of the preceding ten-year period times the number of years of credited service. The certain retirement percentage for the GE Plan is 2.53% and 3.15% for the Police and Fire Plans. Early retirement is available for members who have completed ten years of credited service at reduced benefits. Normal retirement for the GE Plan is the earlier of age sixty-two with ten years credited service or attainment of twenty-five years of credited service. Normal retirement for the Police Plan is the earlier of age fifty-five with ten years of credited service or attainment of twenty years of credited service regardless of age. Normal retirement for the Fire Plan is the earlier of age fifty-five with ten years credited service. age fifty-two with twenty-five years of credited service or the completion of twenty-eight years of credited service regardless of age. The GE Plan does not provide post-employment benefit adjustments and the Police and Fire Plans contain provisions for automatic cost-of-living adjustments. 50

109 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 9 - PENSION TRUST FUNDS (cont... ) Contributions - It is the City's policy to annually fund the actuarially determined required contributions representing the difference between the actuarially determined amount and the contributions of plan members. General Police Fire- Employees' Officers' Fighters' Pension Pension Pension Trust Fund Trust Fund Trust Fund Contribution rates: City and State 20.0% 51.2% 46.5% Plan members 4.0% 4.0% 2.0% Actuarially determ ined contribution $ 1,315,737 $ 785,451 $ 511,223 Contributions made $ 1,530,529 $ 814,522 $ 522,056 Plan Membership Participant data for the City pension plans as of the current actuarial valuation date was as follows: as of October 1, 2016 General Police Fire Employees' Officers' Fighters' Pens ion Pens ion Pension Trust Fund Trust Fund Trust Fund Inactive plan members or beneficiaries currently receiving benefits Inactive plan members entitled to but not yet receiving benefits Active plan members Total Net Pension Liability - The components of the changes in the net pension liability for all three pension trust funds for the year ended September 30, 2017 are shown below. The net pension liability as of September 30, 2017 for financial reporting purposes was determined by actuarial valuations as of October 1, 2015 updated to September 30, 2016 (the measurement date). 51

110 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 9 - PENSION TRUST FUNDS (cont... ) General Employees' Retirement Trust Fund: Balances at September 30, 2015 Changes for the year: Service cost Interest Change in funding standard account Difference between actual and expected experience Change in assuptions Contributions - City Contributions employee Net in\testment income Benefit payments, including refunds of employee contributions Administrati\te expense Net changes Balances at September 30, 2016 Total Pension Liability 594,932 2,285,926 (33,336) 107, ,635 (2,127,216) Increase (Decrease) Plan Fiduciary Net Pension Net Position (Asset) Liability {b} $ 21,473,593 1,305, ,356 2,094,864 (2,127,216) (58,891) 1,516,061 $ 22,989,654 $ 594,932 2,285,926 (33,336) 107, ,635 (1,305,948) (301,356) (2,094,864) Police Officers' Retirement Trust Fund: Balances at September 30, 2015 Changes for the year: Service cost Interest Difference between actual and expected experience Changes of assumptions Changes in benefit terms Changes in the excess State money Contributions - Buy Back Contributions - City Contributions - State Contributions - employee Net in\testment income Benefit payments, including refunds of employee contributions Administrati\te expense Net changes Balances at September 30,

111 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 9 - PENSION TRUST FUNDS (cont...) Firefighters' Retirement Trust Fund: Balances at September 30, 2015 Changes for the year: Service cost Interest Difference between actual and expected experience Changes of assumptions Changes in the excess State money Contributions City Contributions State Contributions - employee Net in\ stment income Benefit payments, including refunds of employee contributions Administrati\ expense Net changes Balances at September 30, 2016 Total Pension Liability 251, ,268 31, ,791 21,617 (453,717) 1,005,417 $ 11,129,521 Increase (Decrease) Plan Fiduciary Net Pension Net Position (Asset) Liability {a)-(b) $ 2,093, , ,375 21, ,637 (453,717) {64,703} 569,678 $ 8,600, , ,268 31, ,791 21,617 (414,052) (102,375) (21,034) (550,637) 64, ,739 $ 2,529,366 Actuarial Assumptions - The actuarial valuation date and significant actuarial assumptions used to measure the total pension liability were as follows: Actuarial valuation date Measurement date Inflation Projected salary increases Investment rate of return Discount rate Mortality rates Date of actuarial experience study General Employees' Retirement Trust Fund October 1, 2015 September 30, % 4.75% 7.75% 7.75% RP 2000, sex distinct January 11,2012 Police Officers' Retirement Trust Fund October 1, 2015 September 30, % 6.00% 8.00% 8.00% RP 2000, sex distinct November 13, 2017 Firefighters' Retirement Trust Fund October 1, 2015 September 30, % 6.00% 8.00% 8.00% RP 2000, sex distinct November 13,

112 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 9 - PENSION TRUST FUNDS (cont...) Long-term Expected Rate of Return on Pension Plan Investments - The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2017, are summarized in the following table Asset Class Domestic equity International equity Broad market fixed income Global fixed income Real estate General Employees' Retirement Trust Fund Police Officers' Retirement Trust Fund Firefighters' Retirement Trust Fund Long-Term Expected Real Rates of Return 7.50% 7.50% 7.50% 8.50% 8.50% 8.50% 2.50% 2.50% 2.50% NA 3.50% 3.50% NA Domestic equity International equity Broad market fixed income Global fixed income Real estate 45% 15% 15% 15% 30% 35% 35% NA 5% 5% 10% NA NA Investments and Rate of Return - The Plans' investment policy and information related to concentrations and custodial and credit risk is discussed in Note 5 to the financial statements. For the year ended September 30, 2017, the net money-weighted rate of return, adjusted for the changing amounts actually invested, for each of the Plans was as follows: Money-weighted Rate of Return General Employees' Retirement Trust Fund 11.58% Police Officers' Retirement Trust Fund 11.34% Firefighters' Retirement Trust Fund 12.20% 54

113 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 9 - PENSION TRUST FUNDS (cont...) Pension Expense and Deferred Outflows and Inflows of Resources Related to Pension - For the year ended September 30, 2017, the City recognized pension expense of $2,898,677 consisting of pension expense for the general employees' pension plan of $1,406,705, the police officers' pension plan $868,554 and the firefighters' pension plan of $623,418. At September 30, 2017, the City reported deferred outflows and deferred inflows of resources related to pensions, combined and individually for all three plans, was as follows: Combined All Pension Trust Funds: Deferred Deferred Outlfows of Infows of Descrietion Resources Resources Differences between expected and actual experience $ 105,379 $ 541,343 Change in assumptions 1,240,783 Net difference between projected and actual earnings on Plan in\estments 1,609,398 City contributions subsequent to the measurement date Total $ $ 541,343 General Employees' Pension Trust Fund: Outlfows of Infows of Resources Resources Differences between expected and actual experience $ 80,407 $ 232,367 Change in assumptions 595,977 Difference between projected and actual earnings on Plan in\estments 756,118 City contributions subsequent to the measurement date 1,530,528 Total $ 2,963,030 55

114 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 9 - PENSION TRUST FUNDS (cont... ) Police Officers' Pension Trust Fund: Deferred Deferred Outlfows of Infows of Descrietion Resources Resources Differences between expected and actual experience $ $ 171,485 Change in assumptions 359,374 Net difference between projected and actual eamings on Plan in\estments 417,035 City contributions subsequent to the measurement date Total $ 171,485 Firefighters' Pension Trust Fund: Deferred Deferred Outlfows of Infows of Descrietion Resources Resources Differences between expected and actual experience $ 24,972 $ 137,491 Change in assumptions 285,432 Net difference between projected and actual earnings on Plan in\estments 436,245 City contributions subsequent to the measurement date 522,056 Total $ 1,268,705 $ 137,491 Deferred outflows of resources related to City contributions subsequent to the measurement date of September 30, 2016 will be recognized as a reduction of the net pension liability in the year ended September 30, Remaining amounts reported as deferred inflows and outflows of resources will be recognized in pension expense in the years and amounts shown below: General Police Fire- Employees' Officers' Fighters' Year ending Pension Pension Pension Seetember 30, Trust Fund Total 2018 $ 431, ,868 $ 819, , , , , , , (92,133) (72,257) (102,866) $ 1,200,135 $ 604,924 $2,414,217 56

115 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 9 - PENSION TRUST FUNDS (cont...) Discount Rate - a rate of 7.75% for the General Employees Retirement Trust Fund and 8.00% for both the Police Officers' and Firefighters' Retirement Trust Funds was used to measure the total pension liability of each of the three plans as of September 30, 2016, which is the measurement date for financial reporting purposes. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at rates equal to the actuarially determined contribution rate. Based on those assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate - The following presents the net pension liability of the City as of the measurement date (September 30, 2016), calculated using the current discount rates discussed above for each plan, as well as what the City's net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate used by each plan. Current Discount Net Pension Liability at Measurement Date Rate 1% Decrease Current Discount 1% Increase General Employees' 7.75% $ 12,422,948 $ 8,596,989 $ 5,318,688 Police Officers' 8.00% 6,052,418 3,647,449 1,652,169 Firefighters' 8.00% 3,862,537 2,529,366 1 City's Net Pension Liability $ 22,337,903 $ 14,773,804 $ 8,387,721 The significant events to impact the measurement of the net pension liability from September 30, 2016 (measurement date), to the City's reporting date of September 30, 2017 is that actual investment returns exceeded the long-term expected rate of return for each of the plans for the plans' year ending September 30,2017. The following presents the net pension liability of the City as of the financial reporting date (September 30, 2017), calculated using the current discount rates discussed above for each plan, as well as what the City's net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate used by each plan. General Employees' Police Officers' Firefighters' City's Net Pension Liability Current Discount Net Pension Liability at Financial Reporting Date Rate 1 % Decrease Current Discount 1 % Increase 7.50% $ 11,736,075 $ 7,624,897 $ 4,163, % 5,438,897 2,962, , % 3,446,546 2,068,434 $ 20,621,518 $ 12,656,290 Change in City's net pension liability between measurement date and reporting date $ (1,716,385) $ (2,117,514) _$"'--_-"(2=,-=.39.:...;3:..2.., 7,-5=2=-<-) 57

116 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 10 - OTHER POST EMPLOYMENT BENEFITS PLAN The City has a policy of paying the cost of post-employment Medicare supplement health insurance upon reaching age 65, and $1,000 face value life insurance for its retirees' upon reaching age 62. The City follows GASB Cod. Sec. P50 for certain post-employment health care and dental benefits provided by the City. Plan Description - Under the provisions of the Plan, retirees who are eligible to retire under one of the City's pension plans and have at least 10 years of continuous service are eligible to receive subsidized health insurance beginning at age 65. In order to be eligible for the subsidy beginning at age 65, retirees must continue to be on the City's insurance prior to age 65 and pay 100% of the active premium. At age 65, depending on which health plan the retiree chooses, the City will pay the retiree premium up to the cap set by the City each year. For the fiscal year ended September 30, 2016, the cap was $459 per month and for fiscal year September 30, 2017, the cap was increased to $492 per month. The retiree is responsible for the remaining amount not covered by the City, if any. In addition, retirees must pay the full cost of coverage for spouses and dependents. The City also provides a full insured $1,000 life insurance benefit to each retiree, regardless of whether the retiree elects other postemployment benefit coverage. The Plan does not issue a stand-alone financial report. Funding Policy - The City currently pays for post-employment health care benefits on a pay-as-you-go basis. The contribution requirements of the City and plan members are established and may be amended by the City Commission. These contributions are neither guaranteed nor mandatory. The City has retained the right to unilaterally modify its payments towards retiree health care benefits. For the year ended September 30,2017, the City's contribution totaled $311,530, approximately 3% of actual payroll. Participant data as of the most recent actuarial valuation: Inactive plan members of beneficiaries currently receiving benefits Inactive plan members entitled to but not yet receiving benefits Active plan members Total Total OPEB liability - The City's total OPEB liability was measured as of September 30, 2016 and was determined by an actuarial valuation as of October 1, The actuarial assumptions used in the October 1, 2016 valuation were based on the results of an actuarial experience study dated January 11, Actuarial assumptions - Significant actuarial assumptions used to measure the total OPES liability were as follows: Inflation Salary inflation Discount rate I nvestment rate of return Healthcare cost trend rates % 4.75% per year 3.06% 0.00% 8.75% for 2017, then 8.50% in 2018, grading down to the ultimate trend rate of 4.00% in 2073 Mortality rates were based on the RP-2000 Generational for males or females, as appropriate, with adjustment for mortality improvements based on Scale BB. 58

117 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 10 - OTHER POST EMPLOYMENT BENEFITS PLAN (cont...) Discount rate - The discount rate was based on a high quality municipal bond rate of 3.06%. The highquality bond rate was based on the week closest but not later than the measure date of the Bond Buyer 20 - Bond Index as published by the Federal Reserve. The 20-Bond Index consists of 20 general obligation bonds that mature in 20 years. The average rating of the 20 bonds is roughly the equivalent to Moody's Investor Service's Aa2 rating and Standard & Poor's Corp's AA. All future benefits were discounted using the above discount rate. Changes in the Total OPEB Liability: Total OPEB Liability Reporting period ending September 30, ,142,369 Changes for the year: Service cost Interest Changes of assumptions Contributions - employer Benefit payments Net changes Reporting period ending September 30,2017 1,141, ,101 2,803,249 (420,400) 4,380,363 26,522,732 Sensitivity of the Total OPEB Liability to changes in the discount rate - The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.06 percent) or 1-percenrtage-point higher (4.06 percent) than the current discount rate: 1% Decrease (2.06%) Total OPEB liability $ 31,805,232 Discount Rate (3.06%) $ 26,522,731 1% Increase (4.06%) $ 22,378,900 59

118 NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 10 - OTHER POST EMPLOYMENT BENEFITS PLAN (conl.) Sensitivity of the Total OPEB Liability to changes in the healthcare cost trend rates - The following presents the total OPES liability of the City, as well as what the City's total OPES liability would be if it were calculated using a discount rate that is 1-percentage-point lower (7.75 percent decreasing to 3.00 percent) or 1-percentage-point higher (9.75 percent decreasing to 5.00 percent) than the current healthcare cost trend rates: 1% Decrease (7.75% decreasing to 3.00%) Total OPEB liability $ 21,865,947 Healthcare Cost Trend Rates (8.75% decreasing to 4.00%) $ 26,522,731 1% Increase (9.75% decreasing to 5.00%) $ 32,614,262 OPEB expenses and deferred outflows of resources related to OPEB - For the year ended September 30,2017, the City recognized OPES expense of $2,405,477. At September 30,2017, the City reported deferred outflows of resources related to OPES from the following sources: Changes of assumptions or other inputs City contributions subsequent to the measurement date Total Deferred Outflows of Resources $ 2,402, ,530 $ 2,714,315 Deferred Inflows of Resources $ Deferred outflows of resources related to City contributions subsequent to the measurement date of September 30, 2016 will be recognized as a reduction of the total OPES liability in the year ended September 30,2018. Other amounts reported as deferred outflows of resources related to OPES will be recognized in OPES expense as follows: Year ended September 30, 2018 $ 400, , , , ,464 Thereafter 400,465 Total $ 2,402,785 60

119 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 11- OTHER EMPLOYEE BENEFIT PLANS The City contributes to a defined contribution money purchase plan established for the benefit of the City Manager. The contributions are 100% vested and amounted to 15% of the City Manager's salary through July 3, 2017 and 10% thereafter. The City also offers its employees, who have completed one year of continuous service, an optional non-contributory deferred compensation plan created pursuant to Internal Revenue Code Section 457. Both Plans are administered by third-party custodians and the plans' assets are not considered part of the reporting entity and are not included in these financial statements. NOTE 12 - RISK MANAGEMENT INSURANCE Commercial insurance protection with normal deductibles is in place to limit the City's exposure from losses arising from liability and property damages for which there has been no significant reduction in coverages, nor have settlement amounts exceeded the City's coverages during the year ended September 30, 2017 or the previous two years. All of the City's insurance is from commercial carriers and there is no self-insurance other than for workers' compensation which is discussed below. SELF-INSURED WORKERS' COMPENSATION - The City provides its employees with workers' compensation coverage for job-related claims expenses through a self-funded plan administered by a third-party administrator. The Plan carries specific stop-loss insurance against catastrophic losses exceeding $450,000 per incident and for aggregate claims over a two-year period exceeding $2 million. Actual costs incurred, including administrative and claims expenses, are allocated to the respective departments and funds based on standard workers compensation classification rates applied to the payroll costs of the respective departments and funds within the City. The City records an estimated liability for reported workers' compensation claims based on loss reserves estimated by the third-party administrator and for loss reserves for claims incurred but not reported, based on actuarially determined estimates of the ultimate cost of such claims (including future claims adjustment expenses) provided by outside consulting actuaries. The liability for the estimated workers' compensation costs is recorded in the general fund because it is fully funded. The liability is also reported as long-term in the governmental activities because the maturities are expected to exceed one year. Changes in the aggregate workers' compensation liabilities for the years ended September 30, 2017 and 2016, were as follows: Claims liability balance, October 1 $ 707,554 $ 525,340 Claims and changes in estimates 146, ,972 Claims payments (168,665} (257,758} Claims liability balance, September 30 $ 685,814 $ 707,554 Cash set aside to pay claims at September 30 $ 911,348 $ 906,906 NOTE 13 - COMMITMENTS AND CONTINGENCIES UNEMPLOYMENT CLAIMS - The City reimburses the State directly for its unemployment claims rather than participate in the State insurance fund for this purpose. As a result, the cost for unemployment claims is deducted when paid. Such costs have been insignificant in the past and no provisions for potential claims have been made in the financial statements. 61

120 NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 13 - COMMITMENTS AND CONTINGENCIES (cont...) LITIGATION - The City is a party to various claims and assessments arising from its actions while carrying out its public services. The City carries general liability coverage and management believes its coverage is sufficient to cover all significant losses arising from the unsuccessful outcome of any pending and/or threatened litigation. ELECTRICAL POWER PURCHASE AGREEMENT The City owns its electrical distribution systems and purchases its power under an agreement with Orlando Utilities Commission (OUG) which expires December 31, Effective January 1, 2018, the City has entered into power purchase agreements with the Florida Municipal Power Agency (FMPA) and OUC for the purchase and sale of electricity and entered into an agreement with Duke Energy for network integration transmission services. WASTEWATER TREATMENT AGREEMENT WITH POLK COUNTY - The City entered into an agreement through October 6, 2038 to process up to 1.0 MGD of wastewater for the County at a rate of $2.88/1000 gallon. To secure the capacity in the City's existing facilities, the County is paying a portion of the City's debt service ($16,768 per month) related to certain existing wastewater treatment capital improvements made by the City in cooperation with the County. These payments are reported as capital contributions when received. In addition, the County has paid the City $2,766,698, towards future improvements to secure capacity up to 2.5 MGD when the facilities are built. This money is reported as unearned revenue until the planned improvements are implemented. NOTE 14 - RESTATEMENT For the fiscal year ended September 30,2017, the City implemented the provisions of GASB Statement 75 - Accounting and Financial Reporting for Postemp/oyment Benefits Other Than Pensions. Accordingly, beginning net position was restated to reflect the change in accounting principles by reducing the previously reported net position to reflect the increase in the OPEB obligation as calculated under GASB Statement 75 as follows: Government-Wide: GO\i9rnmental Activities Business-type Activities Fund Level: Electric fund Water fund Wastewater fund Airport fund Sanitation fund Information technology fund Stormwater fund Net Position, September 30,2015 as previously reported $ 23,693,933 66,416,154 21, , ,855,740 20, ,060, ,066 2,557,966 Restatement $ (8,907,470) (2.662,923) (1,544,059) ( ) ( ) (411,450) (301,005) (68,484) (10,238) Net Position, September 30, 2016 as restated $ 14,786, ,753,412 2,496,587 16,751,568 19,815,310 1,759, ,582 2,547,728 62

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122 REQUIRED SUPPLEMENTARY INFORMATION

123 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For the year ended September 30, 2017 Variance with Budgeted Amounts Final Budget Positive RESOURCES: Taxes Licenses and permits Intergovernmental revenue Charges for services Fines and forfeitures Other Total revenues CHARGES TO APPROPRIATIONS: General government: Commission City manager City clerk Finance Personnel Purchasing Grant management Planning Fleet maintenance Public safety: Police Building Physical environment: Public works Economic environment: Community development Culture/recreation: Library Library Coop - County Library Coop - State aid Parks and recreation Golf course Golf course - restaurant Total expenditures EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers out Transfers in Total other financing sources (uses) NET CHANGE IN FUND BALANCE Original $ 4,493,152 $ 314,461 2,484,088 1,498,200 84, ,547 9,489,558 2,739, , , , ,672 34,617 27, , ,773 5,705, ,226 1,788, , , , ,782 3,478,284 1,031, ,307 19,036,753 $ (9,547,195) $ (1,647,686) 9,916,751 8,269,065 $ (1,278,130) $ Final 4,678, ,461 2,301,088 1,498,200 84, ,047 9,503,913 1,652, , , , ,802 37,736 20, , ,773 5,519, ,726 1,010, , , , ,782 3,020,333 1,036, ,307 16,065,517 {6,561,604) (1,647,686) 9,916,751 8,269,065 1,707,461 Actual $ 4,739, ,531 2,333,610 1,460,161 96, ,639 9,402,155 1,527, , , , ,098 35,185 19, , ,368 5,248, , , , , , ,341 2,922, , ,661 15,325,241 $ {5,923,086) (1,514,327) 9,916,751 8,402,424 $ 2,479,338 {Negative~ 61,435 (74,930) 32,522 (38,039) 12,662 (95,408) (101,758) 125,854 21,945 5,657 16,633 5,704 2, ,499 7, ,106 17,398 47,747 7,182 13,708 6,121 16,441 97,345 45, , ,359 $ 771,877 See Auditors' Report 63

124 BUDGETARY COMPARISON SCHEDULE COMMUNITY REDEVELOPMENT AGENCY For the year ended September 30, 2017 REVENUES: Taxes Other Total re\enues EXPENDITURES: Budgeted Amounts Original Final Actual $ $ 784,111 $ 782,696 10,100 15, , ,819 Economic en\<ironment 794, , ,922 Debt ser\<ice 240, , ,488 Total expenditures 1,034,211 1,034, ,410 NET CHANGE IN FUND BALANCE $ (240,000) $ {240,000} $ 121,409 Variance with Final Budget Positive {Negative) (1,415) 3, , ,801 $ 361,409 See Auditors' Report 64

125 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS GENERAL EMPLOYEES' RETIREMENT TRUST FUND City reporting period date 9/30/2018 9/30/2017 Measurement date 9/30/2017 9/30/2016 Total pension liability Sen.ice cost $ 626,030 $ 594,932 Interest 2,445,146 2,285,926 Change in assumptions 687, ,635 Change in funding standard account (33,336) Difference between expected and actual experience (285,652) 107,208 Benefit payments, including refunds of of employee contributions (1,324,802) (2,127,216) Employee buy-back Net change in total pension liability 2,198,580 1,622,149 Total pension liability, beginning 31,586,643 29,964,494 Total pension liability, ending (a) $ 33,785,223 $ 31,586,643 Plan fiduciary net position Contributions - City $ 1,530,529 1,305,948 Contributions - Employee 306, ,356 Contributions - Employee buy-back 50,733 Net in\iestment income (loss) 2,653,336 2,094,864 Benefit payments, including refunds Of employee contributions (1,324,802) (2,127,216) Administrati\ie expenses (45,409} (58,891} Net change in plan fiduciary net position 3,170,672 1,516,061 Plan fiduciary net position, beginning Plan fiduciary net position, ending (b) $ 22,989,654 26,160,326 21,473,593 $ 22,989,654 Net pension liability (asset) (a)-(b) $ 7,624,897 $ 8,596,989 9/30/2016 9/30/2015 $ 582,546 2,218,251 (224,714) (387,282) (775,295) 123,299 1,536,805 28,427,689 $29,964,494 $ 1,212, ,836 (214,127) (775,295) 9/30/2015 9/30/2014 $ 613,352 2,079,693 (973,494) 1,719,551 26,708,138 $28,427,689 $ 1,278, ,454 1,464,081 (973,494) (23,5271 2,045,783 18,824,687 $20,870,470 $ 7,557,219 Plan fiduciary net position as a percentage of total pension liability 77.43% 72.78% 71.66% 73.42% CO\iered payroll $ 7,657,098 $ 7,557,033 $ 8,049,198 $ 6,833,856 Net pension liability as a percentage of co\iered payroll 99.58% % % % See Auditors' Report 65

126 NOTES TO THE SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS GENERAL EIVIPLOYEES' RETIREMENT TRUST FUND Changes of Assumptions: For measurement date September 30,2017: 1. The assumed rates of mortality were changed from those in the July 1, 2015 Florida Retirement System (FRS) valuation report to those used in the July 1,2016 FRS valuation report. 2. The assumed rate of investment return was lowered from 7.75% to 7.5% per year, net of investment related expenses. 3. The assumed rate of salary increases was amended from a flat rate of 4.75% per year to a service-based table. 4. The assumed rates of retirement and rates of withdrawal were amended at certain age and service points. 5. A "fresh start" to the existing UAAL layers into one single layer which will be amortized over a 15-year period. Future UAAL layers will be amortized over a 15-year period. For measurement date September 30, 2016: 6. The assumed rates of mortality were changed from the RP-2000 Combined Healthy Tables to the mortality tables for special risk employees used by the Florida Retirement System. 7. The inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan's investment cons See Auditors' Report 66

127 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS POLICE OFFICERS' RETIREMENT TRUST FUND City reporting period date 9/30/2018 Measurement date 9/30/2017 Total pension liability Setv\ce cost $ 397,225 Interest 1,637,023 Change in excess State money 13,219 Change in benefit terms Difference between expected and actual experience (18,331 ) Change of assumptions Contributions - Buy Back 26,843 Benefit payments, including refunds of of employee contributions {1,329,052) Net change in total pension liability 726,927 Total pension liability, beginning 20,731,113 Total pension liability, ending (a) $ 21,458,040 Plan fiduciary net position Contributions - City $ 669,668 Contributions - State of Florida 144,854 Contributions - Employee 62,586 Contributions - Buy Back 26,843 Net im.estment income (loss) 1,906,472 Benefit payments, including refunds of employee contributions (1,329,138) Administratil.e expenses {69,868} Net change in plan fiduciary net position 1,411,417 Plan fiduciary net position, beginning Plan fiduciary net position, ending (b) Net pension liability (asset) (a)-(b) 17,083,664 $ 18,495,081 $ 2,962,959 9/30/2017 9/30/2016 9/30/2015 9/30/2016 9/30/2015 9/30/2014 $ 409,524 $ 442,727 $ 449,350 1,545,529 1,472,475 1,386,713 (58,130) 6,937 88,018 (232,824) (48,806) 539,060 7,200 (895,977} (732,947) 1,321,319 1,103,116 19,409,794 17,310,187 $ 20,731,113 $18,413,303 $ 706,919 $ 728,233 $ 826, , , ,257 67,573 67,585 71,421 7,200 1,600,571 (213,507) 1,582,990 (895,977) (957,923) (735,413) (I3,437} 1,545,509 1,821,682 15,538,155 14,036,817 $ 17,083,664 $ 15,858,499 $ 3,647,449 $ 2,554,804 Plan fiduciary net position as a percentage of total pension liability CO\A3red payroll Net pension liability as a percentage of co\a3red payroll 86.19% $ 1,564, % 82.41% 80.05% 86.13% $ 1,689,305 $ 1,981,362 $ 1,785, % % % See Auditors' Report 67

128 NOTES TO THE SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS POLICE OFFICERS' RETIREMENT TRUST FUND Changes of benefit terms: For measurement date September 30, 2016: 1. The automatic cost-of-living adjustment (COLA) increased from 1.98% to 2.00% for future retirees (those who terminate employment or enter the DROP after September 30, 2016). For measurement date September 30, 2015: 1. The automatic cost-of-living adjustment (COLA) increased from 1.77% to 1.98% for future retirees (those who terminate employment or enter the DROP after September 30, 2015). Changes of Assumptions: For measurement date September 30,2016: 1. The assumed rates of mortality were changed from the RP-2000 Combined Healthy Tables to the mortality tables for special risk employees used by the Florida Retirement System. 2. The inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan's investment consultant. See Auditors' Report 68

129 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS FIREFIGHTERS' RETIREMENT TRUST FUND City reporting period date 9/30/2018 Measurement date 9/30/2017 Total pension liability Service cost $ 250,467 Interest 874,820 Change in excess State money 21,629 Difference between expected and actual experience (97,077) Change of assumptions Benefit payments, including refunds of of employee contributions {505,965) Net change in total pension liability 543,874 Total pension liability, beginning 11,129,521 Total pension liability, ending (a) $ 11,673,395 $ $ 9/30/2017 9/30/2016 9/30/2015 9/30/2016 9/30/2015 9/30/ ,243 $ 255,726 $ 254, , , ,136 21,617 18,674 26,346 31,215 (206,235) 356,791 {401,380} (393,888} 1,005, , ,999 10,124,104 9,689,846 9,081,847 11,129,521 $10,124,104 $9,689,846 Plan fiduciary net position Contributions - City $ 423,994 Contributions - State of Florida 98,062 Contributions - Employee 21,525 Net in\.estment income (loss) 1,037,633 Benefit payments, including refunds of employee contributions (505,965) Administrati\.e expenses (70,443} Net change in plan fiduciary net position 1,004,806 Plan fiduciary net position, beginning Plan fiduciary net position, ending (b) Net pension liability (asset) (a)-(b) 8,600,155 $ 9,604,961 $ 2,068,434 $ $ $ 414,052 $ 448,832 $ 420, , , ,451 21,034 20,448 19, ,637 (100,005) 783,353 (453,717) (401,380) (393,888) (64,703) -_ (51,597) (43,332) ,678 21, ,499 8,030,477 8,009,400 7,110,901 8,600,155 $ 8,030,477 $8,009,400 2,529,366 $ 2,093,627 $1,680,446 Plan fiduciary net position as a percentage of total pension liability 82.28% 77.27% 79.32% 82.66% CO\.ered payroll $ 1,076,259 $ 1,051,732 $ 1,025,578 $ 975,911 Net pension liability as a percentage of co\.ered payroll % % % % See Auditors' Report 69

130 NOTES TO THE SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS FIREFIGHTERS' RETIREMENT TRUST FUND Changes of Assumptions: For measurement date September 30, 2016: 1. The assumed rates of mortality were changed from the RP-2000 Combined Healthy Tables to the mortality tables for special risk employees used by the Florida Retirement System. 2. The inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan's investment consultant. See Auditors' Report 70

131 SCHEDULE OF CONTRIBUTIONS Year Ended Seetember 30, General Employees' Plan Police Officers' Plan Firefighters' Plan Actuarially Determined Contribution Contributions in Relation to the Actuarially Determined Contribution $1,315,737 $ 1,350,176 $1,339,284 $ 1,339,284 $1,437,143 $ 1,437,143 $1, $ 1, $ 785,451 $ $ $ 857,739 $ $ 832,990 $ 944,548 $ 944,548 $ $ 500,427 $ 499,572 $ 510,368 $ 519,379 $ 519,379 $ 506,498 $ 506,498 Contribution Excess {Deficienc~} $ 34,439 $ $ $ $ 15,853 $ 36,737 $ $ $ (10.796) $ $ $ CO'vered Pa~roll Contributions as a % of CO'vered Pa~roll $7,657, % $7,557, % $8,049, % $6,833, % $ % $1,689, % $1,981, % $1,785, % $1.076, % $1, % $1.025, % $ 975, % See Auditors' Report 71

132 NOTES TO SCHEDULE OF CONTRIBUTIONS Significant methods and assumptions used in calculated the actuarially determined contributions: Valuation Date: October 1, 2015 for fiscal year 2017 contributions. Actuarial Cost Method: Entry age normal, level percentage of pay, closed. Asset Valuation Method; Historic geometric four-year average market value (net of fees). Salary Increases: 4.75% for the general employees' plan and 6.00% for the police officers' and firefighters' plans. Investment Rate of Return; 7.75% for the general employees' plan and 8.00% for the police officers' and firefighters' plans. Payroll Growth: Up to 3% for the firefighters' plan and zero for the general employees' and police officers' plans. General Employees' Plan Retirement Age: Varies depending on years of service and employee age. Police Officers' Plan Retirement Age: Earlier of age 55 with 10 years of credited service or 20 years of credited service, regardless of age. Also, any member who has reached normal retirement is assumed to continue employment for one additional year. Firefighters' Plan Retirement Age: Earlier of age 55 with 10 years of credited service, age 52 with 25 years of credited service, or 28 years of credited service, regardless of age. Also, any member who has reached normal retirement is assumed to continue employment for one additional year. Mortality: RP2000 combined healthy mortality table. Termination and disability rate tables: General Emplo~ees' Plan Police Officers' Plan Firefighters' Plan % terminating % diabled % terminating % diabled % terminating % diabled ~ during ~ear during :tear during :tear during :tear ~ during ~ear during :tear % 0.09% % 0.03% % 0.03% % 0.10% % 0.40% % 0.04% % 0.15% % 0.70% % 0.07% % 0.25% % 1.80% % 0.18% % 0.38% % 0.67% % 1.00% See Auditors' Report 72

133 SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS Reporting date rv1easurement date Total OPEB Liability Service cost Interest Changes in assumptions Benefit payments Net change in total OPEB Liability Total OPEB Liability - beginning 9/30/2017 9/30/2016 $ 1,141, ,101 2,803,250 (420,400) 4,380,363 22,142,369 Total OPEB Liability - ending Covered-employee payroll Total OPEB liability as a percentage of covered-employee payroll $ 11,595, % Notes to Schedule: No assets are being accumulated in a trust to pay for plan benefits. Changes in Assumptions: The annual per capital claims costs have been updated and the premium rates have also been updated. The annual per capita claims costs utilize an updated manual rate tool that includes more recent claims data from which to develop expected Pre-Medicare costs, and higher expected discounts from providers in-network as compare to rates used in prior valuations. The trend assumption has been updated to reflect recent healthcare trend rate surveys, blended with the long-term rates from the Getzen model published by the Society of Actuaries. The assumed mortality rates have been updated to be consistent with the October 1, 2016 General Employees, Police Officers and Firefighters pension valuations. See Auditors' Report 73

134 OTHER SUPPLEMENTARY INFORMATION

135 COMBINING BALANCE SHEET - NON-MAJOR GOVERNMENTAL FUNDS as of September 30,2017 Tra nsporta ti on ASSETS Equity in pooled cash and cash equivalents $ 1,330,681 Receivables, net Customer accounts, net Intergol.ernmental and other 181,613 Prepaid expenditures Restricted assets: Cash and cash equivalents 923,290 Customer receivables 43,820 TOTAL ASSETS $ 2,479,404 LIABILITIES Accounts payable 106,278 Accrued payroll 481 TOTAL LIABILITIES 106,759 DEFERRED INFLOWS OF RESOURCES Unavailable rel.enue FUND BALANCE Nonspendable: Prepaid expenditures Restricted for: Transportation improl.ements 923,290 Transportation activities 1,405,535 Assigned to: Fire services TOTAL FUND BALANCES 2,328,825 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE $ 2,479,404 Fire Services Fund Total $ 205,256 $ 1,535, , ,711 1,634 1, ,290 $ 208,013 $ 2,687,417 43, ,848 13,990 57, ,319 43,820 1,634 1, ,290 1,405, , , ,453 2,479,278 $ 208,013 $ 2,687,417 See Auditors' Report 74

136 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS for the year ended September 30, 2017 Transportation Fund REVENUES: Taxes $ 997,921 Licenses and permits Intergm..ernmental re\ nue 173,246 Charges for services 106,866 Fines and forfeitures Other 80,879 Total re\ nues 1,358,912 EXPENDITURES: Public safety Transportation 1,041,161 Capital outlay 12,024 Total expenditures 1,053,185 EXCESS (DEFICIENCy) OF REVENUES OVER EXPENDITURES 305,727 OTHER FINANCING SOURCES (USES) Transfers in TOTAL OTHER FINANCING SOURCES NET CHANGE IN FUND BALANCE 305,727 FUND BALANCE, beginning of year 2,023,098 FUND BALANCE, end of year $ 2,328,825 Fire Services Fund $ 96,424 1, , , ,928 2,150,171 30,084 2,180,255 (1,514,327} 1,514,327 1,514,327 $ 150,453 Total $ 1,094, , , ,709 2,024,840 2,150,171 1,041,161 42,108 3,233,440 (1,208,600} 1,514,327 1,514, ,727 2,173,551 $ 2,479,278 See Auditors' Report 75

137 BUDGETARY COMPARISON SCHEDULE - TRANSPORTATION FUND for the year ended September 30, 2017 Variance with Budgeted Amounts Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes Intergo\ernrnental re\enue Charges for service Other Total re\enues EXPENDITURES: Transportation Capital outlay Total expenditures NET CHANGE IN FUND BALANCE $ 963,787 $ 963, , , , , , ,692 1,335,460 1,335,460 1,335,460 1,172,160 1,335,460 1,172,160 $ $ 163,300 $ 997, , ,866 80,879 1,358,912 1,041,161 12,024 1,053,185 $ 305,727 $ 34,134 5,095 See Auditors' Report 76

138 BUDGETARY COMPARISON SCHEDULE - FIRE SERVICES FUND for the year ended September 30, 2017 REVENUES: Taxes Intergo'vernmental re'venue Charges for service Fines and forfeitures Other Total re'venues EXPENDITURES: Public safety Capital outlay Total expenditures EXCESS (DEFICIENCy) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Total other financing sources NET CHANGE IN FUND BALANCE Budgeted Amounts Original Final $ $ 96,425 1,800 1, , , , ,054 2,063,747 2,163, ,568 66,000 2,199,315 2,229,653 {1,647,686} {1,581,599} 1,647,686 1,647,686 $ $ 1,647,686 1,647,686 66,087 Actual Variance with Final Budget Positive {Negative) $ 96,424 $ (1 ) 1, ,709 9, ,830 7, ,928 17,874 2,150,171 13,482 30,084 2,180,255 {1,514,327) 67,272 1,514,327 (133,359} 1,514,327 (133,359) $ $ (66,087) See Auditors' Report 77

139 COMBINING STATEMENT OF NET POSITION - NON-MAJOR ENTERPRISE FUNDS as of September 30,2017 Business Type Activities - Non-Major Enterprise Funds Information Sanitation Fund Technology Fund Stormwater Fund Total ASSETS Current assets: Equity in pooled cash and cash equivalents $2,381,152 $ 213,199 $ 866,138 $3,460,489 Receivables: Customers, net Intergovernmental and other Inventory and prepaids Total current assets Noncurrent assets: Capital assets: Non-depreciable 445,344 2,826, , , ,274 1,085 60, ,064 1, ,685 Depreciable, net Total noncurrent assets Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions Deferred outflows related to OPEB Total deferred outflows of resources LIABILITIES Current liabilities: Accounts payable Accrued wages Total current liabilities Noncurrent liabilities: Compensated absences Post employm ent obligation payable Net pension liability Total noncurrent liabilities Total liabilities 1,302,660 1,456,939 4,283, , , , ,388 8, ,292 57, , ,734 1,575,051 2,044, , , ,712 23,427 11,784 35,211 46, ,291 27, ,169 67, , ,060 2,170,207 2,230,613 3,097,836 33,267 18,061 51,328 11, , , , ,454 3,988,305 4,202,990 8,144, , , , ,253 10, ,739 86,028 1,244, ,609 2,100,118 2,628,857 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions NET POSITION Net investment in capital assets Unrestricted Total net position 15,710 1,456,939 1,056,418 $ 2,513,357 2,090 1,731 19, ,438 2,230,613 4,202, ,366 1,670,119 $ 540,773 $2,818,979 $5,873,109 See Auditors' Report 78

140 COIVIBINING STATEIVIENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - NON-MAJOR ENTERPRISE FUNDS for the year ended September 30, 2017 OPERATING REVENUES: Charges for services $ 3,253,308 Total operating income 3,253,308 Business T~~e Activities - Non-Major Enter~rise Funds Information Sanitation Fund Technology Fund Stormwater Fund $ 231,104 $ 667,219 $ 4,151, , ,219 4,151,631 OPERATING EXPENSES: Personnel services 851,420 Operating ej<penses 1,541,044 Depreciation 208,014 Total operating ej<penses 2,600,478 OPERATING INCOME 652,830 NONOPERATING REVENUE (EXPENSE) Investment revenue Gain on disposal of property Other, net Total nonoperating revenues (ej<pense) INCOME BEFORE CONTRIBUTIONS AND TRANS FERS 98, ,121 1,062, , ,578 1,964,555 71, , , , ,166 3,409,977 (89,229) 178, , ,198 4,935 3,800 94, ,101 {88,809) 179, ,755 CAPITAL CONTRIBUTIONS Capital grants and contributions Total capital contributions CHANGE IN NET POSITION NET POSITION, beginning of year, previously reported 2,060,049 Restatement (Note 14) (301,005) NET POSITION, beginning of year, as restated 1,759,044 NET POSITION, end of year $ 2,513,357 (88,809) 698,066 2,557,966 5,316,081 (68,484} (10,238) (379,727) 629,582 2,547,728 4,936,354 $ 540,773 $ 2,818,979 $ 5,873, See Auditors' Report 79

141 COMBINING STATEMENT OF CASH FLOWS- NON-MAJOR ENTERPRISE FUNDS for the year ended September 30, 2017 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers $ 3,151,992 Payments to suppliers (1,220,099) Payments for salaries and benefits F77,948) Net cas h flows from operating activities 1,153,945 CASH FLOWS FROM CAPITAL AND RELATED ANANCING ACTIVITIES: Acquisition and construction of capital assets, net of related payables (771,275) Proceeds from the sale of assets 3,800 Capital contributions and impact fees receilled, net of change in related receivables Net cash flows from capital and related financing activities {767,475) CASH FLOWS FROM INVESTING ACTIVITIES Interest on inllested funds 3,356 Other income 94,327 Net cas h flows from inllesting activities 97,683 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 484,153 CASH AND CASH EQUIVALENTS, beginning of year CASH AND CASH EQUIVALENTS, end of year Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ 652,830,Adjustments to reconcile operating income to net cash provided (used) byoperating activities: DepreCiation expense 208,014 (Increase) decrease in inllentory and prepaids (Increase) decrease in accounts receivable (101,316) (Increase) decrease in amounts due from other gollernments Increase (decrease) in accounts payable 320,945 Increase (decrease) in accrued wages and compensated absences 10,901 Increase (decrease) in OPEB liability and related elements 69,468 Increase (decrease) in pension elements (6,897) Increase (decrease) in unearned rellenue and other Net cash flows from operating activities 1,153,945 Business Tll~ Activities - Non-Major Enteq;!rise Funds Information Sanitation Fund Technology Fund Stormwater Fund Total $ 240,058 $ 667,219 $ 4,059,269 (114,360) (271,019) (1,605,478) {87,750~ (100,206) {965,904} 37, ,994 1,487,887 (92,800) (864,075) 3,800 {1,085) (92,800} (1,085) 381 1,198 4, , ,198 99,301 (54,432) 296, ,828 2,734,661 $ 3,460,489 $ (89,229) $ 178,053 $ 741,654 71, , ,548 8,954 (92,362) 36,573 1, ,077 2, ,540 8,881 13,613 91,962 (861) (774) (8,532) As shown in the Accompanying Rnancial Statements Equity in cash and inllestments $ 2,381,152 Restricted equity in cash and inllestments Total cash and cash equivalents $ 2,381,152 Noncash financing and investing activities: Donated land $ 213,199 $ 866,138 $ 3,460,489 $ 866,138 $ 3,460,489 $ 92,000 See Auditors' Report 80

142 COMBINING STATEMENT OF FIDUCIARY NET POSITION - PENSIOI\l TRUST FUNDS as of September 30, 2017 ASSETS Receivables: City and plan members State of Florida Accrued income Total receivables Prepaid expenses In\.estments, at fair value: Short-term money market funds Fixed income in\.estments Equity in\.estments Total in\.estments Total assets LIABILITIES Accured benefits payable Total Liabilities NET POSITION Restricted for pension benefits General Employees' Pension Trust Fund $ 318,269 $ 39,016 56, ,959 Pension Trust Funds Police Officers' Firefighters' Pension Pension Trust Fund Trust Fund 87, ,791 89,071 6,525,274 6,902,376 18,460,809 11,469,872 25,797,874 18,461,319 26,172,833 18,633, ,457 12, ,457 $ 26,160,326. $ 18,495,081 $ 29,562 1, ,261 42,811 42,815 3,204,987 6,283,087 9,530,889 9,604,961 $ 9,604,961 Total $ 386,847 1, , , , ,677 16,632,637 36,213,768 53,790,082 54,411, , ,964 $ 54,260,368 See Auditors' Report 81

143 COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION - PENSION TRUST FUNDS for the year ended September 3D, 2017 ADDITIONS Contributions: City Plan members State of Florida Total contributions General Employees' Pension Trust Fund $ 1,530,529 $ 669, ,018 89, ,854 1,887, ,951 Pension Trust Funds Police Officers' Firefighters' Pension Pension Trust Fund Trust Fund $ 423,994 21,525 98, ,581 Total $ 2,624, , ,916 3,335,079 Im,estment income Less inv9stment expenses: Performance evaluation Custodial fees InV9stment management fees Total inv9stment expenses Net inv9stment income Total additions 2,726,654 1,977,602 24,375 25,500 9,629 13,701 39,314 31, , ,336 1,906,472 4,540,883 2,810,423 1,074,196 17,000 7,234 12, ,633 1,581,214 5,778,452 66,875 30,564 83, , , ,520 DEDUCTIONS AdministratiV9 expenses: Legal Administrator fee Actuarial TraV9l, training and other Accounting Interest and late fees Insurance Audit Total administrativ9 expenses Payments to retirees and participants Total deductions 7,380 7,746 15,800 30,304 22, ,625 8,265 4,158 5,100 4,160 45,409 69,868 1,324,802 1,329,138 1,370,211 1,399,006 19,613 9,050 17,769 11,696 5,575 2,580 4,160 70, , ,408 34, ,916 18,592 16,465 6,738 13, ,720 3,159,905 3,345,625 CHANGE IN NET POSITION NET POSITION, beginning of year 3,170,672 1,411,417 22,989,654 17,083,664 1,004,806 8,600,155 5,586,895 48,673,473 NET POSITION, end of year $26,160,326 $18,495,081 $9,604,961 $ 54,260,368 See Auditors' Report 82

144 GOVERNMENT AUDITING SECTION

145 ray&. C_offi_Qany G Purvis 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 Honorable Mayor and Members ofthe City Commission City of Bartow Bartow, 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 Standard~, issued by the Comptroller General ofthe United States, the financial statements ofthe governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Bartow, Florida (the City), as of and for the year ended September 30,20 17, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated May 30,2018. Our repoli includes a reference to other auditors who audited the financial statements of the City's Police Officers' and the Firefighters' Pension Plans, as described in our report on the City's financial statements. This report does include the results of other auditors' testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. The financial statements of the Police Officers' Pension Plan and the Firefighters' Pension Plan were not audited in accordance with Government Auditing Standards. However, this report insofar as it related to the results of the other auditors, is based solely on the reports of the other auditors. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to detennine 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 City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City'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 perfonning 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 ofintemal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. Certified Public Accountants P.O. Box N,E. 151 Street Gainesville, Florida 32b (3.')2) g!\ 2461 FAX (352) 'l Laurel Ridge Profession,)1 Center 2347 S.E. 17th Street Ocal<1, Florida (352) FAX (352) E,lst College Avenue Tallahassee, Florida (8.50) FAX (8S0) Lilkewood Ranch Blvd. N., Suite 101 Samsota, Florida (94)) FAX (941) MEMB[RS or AMERICA;'; A"f) ri.ori[);1 I'IST,nmS Of URTlriED PUBLIC ;ICCOl'NTtlNTS,\liMBER or ;IMFRICM, INSTlfl'T( or CERTlnm PUBLIC M:COU:-ilMiTS f'riv,lll CO,II!',INlfS ;IM) S.E C.!'R,ICTICE 5[ClIO'I:) 83

146 The Honorable Mayor and Members of the City Commission City of Bartow Bartow, Florida INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Concluded) Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results ofthat testing, and notto provide an opinion on the effectiveness ofthe City's internal control or on compliance. This report is an integral part of an audit perfonned in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. o~, ~ ad. d"?'d' ILl May 30, 2018 Sarasota, Florida 84

147 G Purvis ray &- C_offi_Qany INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE WITH SECTION , FLORIDA STATUTES The Honorable Mayor and Members of the City Commission City of Bartow Bartow, Florida We have examined the City of Bartow, Florida (the City)'s compliance with the requirements of Section , Florida Statutes, as of and for the year ended September 30, 2017, as required by Section (1 O)(a), Rules of the Auditor General. Management is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on the City's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perfonn the examination to obtain reasonable assurance about whether the City complied, in ail material respects, with the requirements referenced above. An examination involves perfonning procedures to obtain evidence about whether the City complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal detennination on the City's compliance with specified requirements. In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year ended September 30,2017. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Honorable Mayor and Members of the City Commission, and applicable management, and is not intended to be, and should not be, used by anyone other than these specified parties. O~,k;ra,d~,ld May 30, 2018 ' 0 Sarasota, Florida Certified Public Accountants P.O. Box N.E. 151 Street Gainesville, Florida 3261' C~52) FAX (352) 37B 2505 L<lurel Ridge Professional Center 2347 S.E. 17th Street Ocal;l, Florida (352) 732-3B72 FAX (352) 732-0:) East College Avenue Tallahassee, Florida ibso) FAX (850) Lakewood Ranch Blvd. N., Suite 101 SMJSota, florida 34240' \ ' FAX (941l M[.WHl~' or,\\mm.an,\nd nori!).\ INSrHJTrS or <:mnrrw PLJfHlC MrMBER Of,\,\lfRiC,"''' IN~Ti1UTr or CfRTlrtrD pum Ie "'COU"'ANT' i'rivmr CO,\WN,lrS M,[) ST ( 1'Rr\CTKT,[<.11):'>1, 85

148 G Purvis ray&.. C_om_.Qany MANAGEMENT LETTER The Honorable Mayor and Members of the City Commission City of Bartow Bartow, Florida Report on the Financial Statements We have audited the financial statements of the City of Bartow, Florida (the City), as of and for the fiscal year ended September 30, 2017, and have issued our report thereon dated May 30, Our report includes a reference to other auditors who audited the financial statements of the City's Police Officers' and the Firefighters' Pension Plans, as described in our report to the City's financial statements. This report does not include matters related to these separate audits. Auditors' Responsibility We condueted our audit in aeeordance 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 Reporting Requirements 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 Aceordanee with Government Auditing Standards; and Independent Accountants' Report on an examination conducted in accordance with A/CPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter , Rules of the Auditor General. Disclosures in those reports, which are dated May 30, 2018, 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 eorrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Corrective actions have been taken to address findings and recommendations made in the preceding financial audit report. Official Title and Legal Authority Section (1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The City has disclosed this information in the notes to the financial statements. Certified Public Accountants P.O. Box N.E. 15t Street Gainesvflle, florida (352) 37B-2 l 161 fax (352) Laurel Ridge Proiessional Center 2J47 S.E. 17th Street Ocala, florida (352) FAX (352) J East College AvemlE' Tallahassee, Florida (HSOl FAX (850) h2 500 I Lakewood Ranch Blvd. N., Suite 10 1 Sarasota, Florida ]4240 (941) FAX (941) 907 0}09 "'L\\fIt:RS ()[ i\\j[~ican ANf) norio" INS'IITF1T5 Of C[RTlmo PUIlLIC ACCOliNT,\NT'i,\\[,II!I[R or :\MfRICIN 1>;'inTUTE O[ ttf:fiflfd PUIlliC,\Cf"miNliINTS I'RlVMf CO,\.\P:\NlfS /1'\1) C PR,I('TIC,[,[eTlONS 86

149 The Honorable Mayor and Members ofthe City Commission City of Bartow Bartow, Florida MANAGEMENT LETTER (Continued) Financial Condition and Management Sections (1)(i)5.a. and (7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether or not the City has met one or more of the conditions described in Section (1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the City did not meet any of the conditions described in Section (1), Florida Statutes. Pursuant to Sections 1O.554(l)(i)5.c. and (8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the City's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Section 1O.554(l)(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 do not have any such recommendations. Annual Financial Report Sections 1O.554(1)(i)5.b. and (7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether the annual financial report for the City for the fiscal year ended September 30, 2017, filed with the Florida Department of Financial Services pursuant to Section ( I )(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, In connection with our audit, we determined that these two reports were in agreement. Special District Component Units Section (1 )(i)5.d., Rules of the Auditor General, requires that we determine whether or not a special district that is a component unit ofthe City provided the financial information necessary for proper reporting of the component unit, within the audited financial statements of the City in accordance with Section (3 )(b), Florida Statutes. In connection with our audit, we determined that all special district component units provided the necessary information for proper reporting in accordance with Section (3)(b), Florida Statutes. Additional Matters Section 1O.554(l)(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 note any such findings. 87

150 The Honorable Mayor and Members of the City Commission City of Bartow Bartow, Florida MANAGEMENT LETTER (Concluded) Purpose of this Letter Our management letter is intended solely for the infonnation and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Members of the City Commission, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. We would like to take this opportunity to express our appreciation for the professionalism and courtesies whieh were extended to our staff. If you have any questions or comments about the contents of this letter, or the infonnation accompanying this letter, please do not hesitate to contact us. O~~aJ~,/d May 30, Sarasota, Florida 88

151 APPOINTMENT OF VOTING DELEGATE TO THE ANNUAL FLORIDA LEAGUE OF CITIES CONFERENCE ITEM NO SUMMARY: The request is for the selection of a voting delegate from the City of Bartow for the 92 nd Annual Florida League of Cities Conference in Hollywood, FL on August 16-18, STAFF ANALYSIS: Annually the Florida League of Cities holds a conference during which the members meet in a business session to discuss and consider various items affecting the organization. Each city is represented by a voting delegate given the authority to vote on behalf of his/her respective city. STRATEGIC PLANNING GOAL(s) & ACTION STEP(s) THAT THIS ITEM MEETS: N/A RECOMMENDATION: That the Commission appoint one of its members to serve as the voting delegate at the Annual FLC Conference.