CITY of EUSTIS Florida. Comprehensive Annual Financial Report

Transcription

1 CITY of EUSTIS Florida Comprehensive Annual Financial Report Fiscal Year September 30, 2014

2 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EUSTIS, FLORIDA FISCAL YEAR ENDED SEPTEMBER 30, 2014 Prepared By: Finance Department i

3 CITY OF EUSTIS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 TABLE OF CONTENTS Introductory Section Title Page Table of Contents Letter of Transmittal Organizational Chart GFOA Certificate of Achievement i iii vii xvi xviii Financial Section Independent Auditors' Report 1 Management's Discussion and Analysis 5 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Assets 19 Statement of Activities 20 Fund Financial Statements Balance Sheet - All Governmental Funds 22 Reconciliation of the Balance Sheet of Governmental Funds to Statement of Net Assets 24 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds 26 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Funds to the Statement of Activities 28 Statement of Net Assets - Proprietary Funds 29 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds 31 Statement of Cash Flows - Proprietary Funds 32 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 35 Notes to Financial Statements 35-1 iii

4 Table of Contents (Continued) REQUIRED SUPPLEMENTARY INFORMATION Major Funds: Schedule of Revenues, Expenditures and Changes in Fund Balance General Fund - Budget and Actual 71 Schedule of Revenues, Expenditures and Changes in Fund Balance Street Improvement Fund - Budget and Actual 72 Schedule of Revenues, Expenditures and Changes in Fund Balance Sales Tax Revenue Fund - Budget and Actual 73 Schedule of Revenues, Expenditures and Changes in Fund Balance Community Redevelopment Fund - Budget and Actual 74 Schedule of Revenues, Expenditures and Changes in Fund Balance Stormwater Utility Fund - Budget and Actual 75 Historical Trend Information for Pension Trust Funds 76 Schedule of Changes in Net Pension Liability and Related Ratios 78 Schedule of Contributions 79 Schedule of Investment Returns 80 Historical Trend Information for Other Post Employment Benefits 82 SUPPLEMENTARY INFORMATION Nonmajor Funds: Combining and Individual Fund Statement and Schedules Combining Balance Sheet - Nonmajor Governmental Funds- Special Revenue Funds 86 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds - Special Revenue Funds 88 Schedule of Revenues and Expenditures - Budget and Actual Law Enforcement Trust Fund 90 Schedule of Revenues and Expenditures - Budget and Actual Law Enforcement Education Fund 91 Schedule of Revenues and Expenditures - Budget and Actual Economic Development Fund 92 Schedule of Revenues and Expenditures - Budget and Actual Library Contribution Fund 93 Schedule of Revenues and Expenditures - Budget and Actual Impact Fee Fund 94 Schedule of Revenues and Expenditures - Budget and Actual Greenwood Cemetery Fund 95 iv

5 Table of Contents (Continued) STATISTICAL SECTION Schedule 1 Net Assets By Component Last Ten Years 97 Schedule 2 Changes in Net Assets Last Ten Years 98 Schedule 3 Fund Balances, Governmental Funds Last Ten Years 100 Schedule 4 Changes in Fund Balances Governmental Funds Last Ten Years 102 Schedule 5 Assessed and Estimated Actual Value of Taxable Property Last Ten Years 103 Schedule 6 Direct and Overlapping Property Tax Rates Last Ten Years 104 Schedule 7 Principal Taxpayers Last Ten Years 105 Schedule 8 Property Tax Levies and Collections Last Ten Years 106 Schedule 9 Ratios of Outstanding Debt by Type Last Ten Years 107 Schedule 10 Direct Governmental Activities Debt as of September 30, Schedule 11 Pledged - Revenue Coverage Last Ten Years 109 Schedule 12-1 Demographic and Economic Statistics Last Ten Years 111 Schedule 13 Full Time Equivalent City Government Employees 114 Schedule 14 Various Indicators by Function 115 Schedule 15 Sewer Sold by Type of Customer Last Ten Years 116 Schedule 15-1 Water Sold by Type of Customer Last Ten Years 118 Scheduled 16 Golden Triangle Ad Valorem Tax Profile 120 Schedule 17 Lake County Cities Millage Rate, Taxable Value and Taxes Levied Data 121 Schedule 18 Principal Employers Eustis, Florida 122 OTHER REPORTS Independent Auditors' Report on Compliance and on Internal Controls over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 123 Independent Auditors' Report on Compliance with requirements that could have a direct and material effect on each major state assistance project and on internal control over compliance in accordance with the Florida Department of Financial Services, State Projects compliance supplement 125 Management Letter 127 Management Letter Comments 129 City Response to Auditors' Management Letter 133 v

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7 INTRODUCTORY SECTION

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17 Organizational Chart The City of Eustis, Florida Citizens of Eustis City Attorney City Commission City Clerk Advisory Boards City Manager Committees Financial Services Development Services Public Safety Public Services Human Resources Library Facilities & Recreation Data Processing Planning & Zoning Police Fire Public Works Streets Public Services Facility Rental Customer Service Code Enforcement Uniform Patrol Prevention Water Distribution Athletic & Recreation Programs Meter Reading Building Inspections Criminal Investigation Suppression Wastewater Treatment Aquatic Program Purchasing Communications Stormwater Management Custodial Services Information Technology Support Service Building Maintenance Maintenance Services School Crossing Cemetery Maintenance Garage Park Maintenance Public Works Stormwater Maintenance xvi

18 CITY OF EUSTIS, FLORIDA List of Elected and Key Officials September 30, 2014 Elected Officials City Commission Title Name _ Seat Current Term of Seat Mayor Linda Bob 1 1/2011 through 12/2014 Vice Mayor Dr. Albert Eckian 5 1/2013 through 12/2016 Commissioner Michael Holland 3 1/2013 through 12/2016 Commissioner Karen Leheup-Smith 4 1/2013 through 12/2016 Commissioner Kress Muenzmay 2 1/2011 through 12/2014 Acting City Manager Legal Counsel Finance Director City Clerk Appointed and Key Officials Dianne L. Kramer Derek A. Schroth Jim R. Myers, Jr., CMC, CGFM Mary Montez Executive Team Acting City Manager Finance Director Police Chief Director of Public Works/Public Services Director of Human Resources Director of Development Services Director of Economic Development Director of Eustis Memorial Library Director of Parks and Recreation Fire Chief Dianne L. Kramer Jim R. Myers, Jr., CMC, CGFM Fred Cobb Richard Gierok Ann Isaacs Dianne L. Kramer Thomas Carrino Marlene Blye Joe LaPolla Rex Winn Building Official Director of Purchasing Street Superintendent Wastewater Superintendent Water Superintendent Division Heads James Stroupe Tracy Jeanes Joseph Jones Bill Johnston Greg Dobbins xvii

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20 FINANCIAL SECTION This Section contains the following Subsections: AUDITOR S REPORTS MANAGEMENT DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS FUND FINANCIAL STATEMENTS

21 INDEPENDENT AUDITORS' REPORT Honorable Mayor and City Commissioners City of Eustis Eustis, Florida We have audited the accompanying financial statements of governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Eustis, Florida (the City) as of and for the year ended September 30, 2014, 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 included the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 1

22 Honorable Mayor and City Commissioners City of Eustis Eustis, Florida INDEPENDENT AUDITORS' REPORT (Continued) Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City as of September 30, 2014, and the respective changes in financial position and where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis budgetary comparison information and schedule of funding progress, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Government Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and statistical section, are presented for the purpose of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and the budget and actual schedules, are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statement or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of state financial assistance are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2

23 Honorable Mayor and City Commissioners City of Eustis Eustis, Florida INDEPENDENT AUDITORS' REPORT (Concluded) Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 5, 2015, on our consideration of the City s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City s internal control over financial reporting and compliance. March 5, 2015 Ocala, Florida 3

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25 Management s Discussion and Analysis As management of the City of Eustis, we offer readers of the City s financial statement this narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages vii of this report. Financial Highlights The assets of the City exceeded its liabilities at the close of the fiscal year 2014 by $115,345,392 (net position). Of this amount, $13,193,401 (unrestricted net position) may be used to meet the government s ongoing obligation to citizens and creditors. The City s total net position decreased by $191,674 for fiscal year The City s governmental activities reported combined Net position of $70,790,911 is an increase of $90,515 from prior year. Approximately 11.4 % is available in unrestricted funds and available for use at the government s discretion. Business-type activities Net Position of $44,554,481 reflected a decrease of $282,189 from prior year. At September 30, 2014, unassigned fund balance for the governmental funds was $4,926,071 in 2013and $5,274,791 in The City s total long term debt decreased by $983,772 during the current fiscal year. Scheduled payments on the Revolving Loans totaled $518,772 and the Multi-Purpose bond was decreased $465,000. Compensated absences decreased in the amount of $519,860, while other postemployment benefits increased by $197,456. The City implemented GASB 65, Items Previously Reported as Assets and Liabilities, GASB Statement No. 66, Technical Corrections ; an amendment of GASB Statements No. 10 and No. 62, and GASB Statement No. 67, Financial Reporting for Pension Plans an Amendment of GASB Statement No. 2. Overview of the Financial Statements The discussion and analysis, which follows, is intended to serve as an introduction to the City s basic financial statements. The City s basic financial statements comprise three components: 1. Government-wide financial statements. 2. Fund financial statements. 3. Notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements - The government-wide financial statements are designed to provide readers with a broad overview of the City s finances in a manner similar to a private-sector business. 5

26 Management Discussion and Analysis Page 2 of 13 Organization and Flow of Financial Section Information Report of Independent Certified Public Accountants Provides the opinion of the Independent CPAs on the fair presentation of the basic financial statements. Management's Discussion and Analysis This supplementary information is required for state and local government financial statements, and is intended to provide a narrative introduction, overview, and analysis. Government-wide Financial Statements Provides information on governmental and businesstype activities of the primary government. Fund Financial Statements Provides information on the financial position of specific funds of the primary government. Notes to Financial Statements Provides a summary of significant accounting policies and related disclosures. The statement of net position presents information on all of the City s assets and liabilities, with the difference between the two reported as net position. Over time an 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 government s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the time of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (government activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (businesstype activities). 6

27 Management Discussion and Analysis Page 3 of 13 The governmental activities of the City include: General Government Public Safety Transportation (Streets & Highways) Culture and Recreation The business-type activities of the City include a Water and Sewer Utility Fund. Solid waste is franchised to an independent contractor. The government-wide financial statements do not include any component units which would be reported separately. The City does, however, have three blended component units. These are represented as part of the audited financial statements of the City. The units include the Fire and Police Retirement Funds as well as the City of Eustis Community Redevelopment Trust Fund, which is also known as the Community Redevelopment Area (CRA) including the Downtown and East Eustis. The government-wide financial statements can be found on pages of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All of the funds of the City can be divided into three categories: Governmental Funds Proprietary Funds Fiduciary Funds Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balance of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains twelve individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and change in fund balances for the general fund and four special revenue funds all of which are considered to be major funds. Data from the other seven funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. 7

28 Management Discussion and Analysis Page 4 of 13 The City adopts an annual appropriated budget for its general fund, as well as nine of the special revenue funds. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages of the report. Proprietary Funds The City maintains only one type of proprietary fund. Enterprise funds are used to report the same functions presented as business-type activities in the government wide financial statements. The City uses enterprise funds to account for its Water and Sewer System operations. Proprietary funds provide the same type of information as the government wide financial statements, only in more detail. The proprietary fund financial statements provide information for the Water and Sewer System, which is considered a major fund of the City The basic proprietary fund financial statements can be found on pages of this report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City s own programs. The accounting for fiduciary funds is similar to proprietary funds. The fiduciary funds include pension trust funds for police and fire. Notes To The Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government wide and fund financial statements. The notes to the financial statements begin on page 36 of this report. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City s required contributions to provide pension benefits to its employees and post-employment benefits (OPEB). Required supplementary information can be found beginning on page 70 of this report. The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information on pensions and OPEB. Combining and individual fund statements and schedules can be found starting on page 84 of this report. Statement of Net Position Government Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government s financial position. In the case of the City, assets exceeded liabilities by $115,345,392 at the close of the fiscal year ended September 30, By far the largest portion of the City s net position (80.9% in 2014) reflects its investment in capital assets, less related debt used to acquire such assets. Assets represent the investment required to provide services necessary in the operation of the City. Most of the assets acquired by the City have no real marketable value (e.g. streets, sidewalks, right-of-ways, storm drains, etc.). These are classified as infrastructure and are provided to the citizens for their benefit. 8

29 Management Discussion and Analysis Page 5 of 13 The unrestricted net position total $13,193,401 in 2014, was available to be used to meet the City s ongoing obligation to citizens and creditors. At the end of the year the City s net position is reflected as follows: City of Eustis, Florida Statement of Net Position Governmental Activities Business-type Activities Total Current and other assets $ 13,759,970 $ 14,038,108 $ 13,058,805 $ 12,616,461 $ 26,818,775 $ 26,654,569 Capital Assets (Net) 62,697,680 62,705,046 39,812,055 41,045, ,509, ,750,964 Total Assets 76,457,650 76,743,154 52,870,860 53,662, ,328, ,405,533 Current and other liabilities 1,445,185 1,033, , ,603 2,251,861 1,831,033 Long-term Liabilities 4,221,554 5,009,328 7,509,704 8,028,106 11,731,258 13,037,434 Total Liabilities 5,666,739 6,042,758 8,316,380 8,825,709 13,983,119 14,868,467 Net Position: Net Investment in Capital Assets 60,587,680 60,130,046 32,764,484 33,479,575 93,352,164 93,609,621 Restricted 3,848,338 4,501,756 4,951,489 4,272,913 8,799,827 8,774,669 Unrestricted 6,354,893 6,068,594 6,838,508 7,084,182 13,193,401 13,152,776 Total Net Position $ 70,790,911 $ 70,700,396 $ 44,554,481 $ 44,836,670 $ 115,345,392 $ 115,537,066 Restricted Net Position reflects net position that is restricted by an outside third party as to its use. The most significant restrictions for governmental activities include net position restricted for capital projects based on the voter approved one cent sales tax legislation and net position restricted for community development due to collection within the City s Community Redevelopment district. Business-type activities include debt related restrictions on net position for renewal and replacement and restricted net position for capital projects for impact fees collected but not spent. 9

30 Management Discussion and Analysis Page 6 of 13 Statement of Activities The following table reflects the condensed Statement of Activities for the current year as compared to the prior year: City of Eustis, Florida Changes in Net Position REVENUES Program Revenues: Governmental Activities Business-type Activities Total Charges for Services $ 2,604,708 $ 2,307,409 $ 8,212,792 $ 7,760,154 $ 10,817,500 $ 10,067,563 Operating Grants and Contributions 10,883 63, ,883 63,665 Capital Grants and Contributions - 12, , , , ,323 General Revenues: Property Taxes 5,377,109 4,726, ,377,109 4,726,990 Utility Taxes 1,472,855 1,301, ,472,855 1,301,618 Franchise Fees 1,796,581 1,603, ,796,581 1,603,425 State and Other Shared Revenues 4,496,256 4,500, ,496,256 4,500,589 Investment Income 79,345 7,378 18,648 40,984 97,993 48,362 Miscellaneous 626, ,149 6, , , ,613 Total Revenues 16,464,193 15,159,510 8,907,804 8,333,638 25,371,997 23,493,148 EXPENSES General Government 5,072,134 4,736, ,072,134 4,736,006 Public Safety 7,626,013 8,026, ,626,013 8,026,248 Physical Environment 276, ,630 - Transportation 2,867,866 3,079, ,867,866 3,079,555 Culture/Recreation 1,900,795 2,127, ,900,795 2,127,106 Debt Service - Interest 40,240 70, ,240 70,559 Water and Sew er Operations - - 7,779,993 7,171,734 7,779,993 7,171,734 Total Expenses 17,783,678 18,039,474 7,779,993 7,171,734 25,563,671 25,211,208 Excess (Deficiency) Before Transfers (1,319,485) (2,879,964) 1,127,811 1,161,904 (191,674) (1,718,060) Transfers 1,410,000 1,549,516 (1,410,000) (1,549,516) 0 - Change in Net Position 90,515 (1,330,448) (282,189) (387,612) (191,674) (1,718,060) Net Position - Beginning 70,700,396 72,030,844 44,836,670 45,224, ,537, ,255,126 Net Position - Ending $ 70,790,911 $ 70,700,396 $ 44,554,481 $ 44,836,670 $ 115,345,392 $ 115,537,066 10

31 Management Discussion and Analysis Page 7 of 13 Governmental Activities Governmental activities net position increased for the year by $90,515. This change between fiscal years resulted from slight increases in Charges for Services and Tax Revenues offset by a decrease in expenditures of $255,796 compared to prior year. The most significant revenue source for governmental activities continues to be property taxes which represent 33% of total governmental activity revenue. Intergovernmental revenues comprise 27% of the same total. Intergovernmental revenues total includes state shared revenues such as sales tax in addition to grants. Other revenue sources are highlighted in the graph below. Franchise Fees 11% Utility Service Tax 9% Property tax 33% State Shared Revenue 27% Revenues by Source - Governmental Activities (does not include transfers) Other 4% Capital grants and contributions 0% Investment income (loss) 0% Operating grants and contributions 0% Miscellaneous 4% Charges for services 16% Expenses for governmental activities include general government, public safety, physical environment, transportation and culture and recreation. Public Safety is the largest governmental expense. This includes law enforcement and fire control. As depicted in the graph below, program revenues do not cover the cost of providing the governmental activity services. 11

32 Management Discussion and Analysis Page 8 of 13 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - Expenses and Program Revenues - Governmental Activities Expenses Program Revenues Business-type Activities Business activities net position decreased by $282,189 for the current fiscal year. The decline in business activity net position has been the result of a modest increase in operating revenue offset by water treatment and distribution expenses. Revenues by Source Business-type Activities Charges for Services Capital Grants and Contributions Investment Income Miscellaneous revenues The most significant revenue for business-type activities is Charges for Services. This is a characteristic trait of enterprise funds that the charges for services are to cover the cost of operations. Since net position continues to decline, the City has implemented water and sewer rate increases based on a rate study. 12

33 Management Discussion and Analysis Page 9 of 13 Governmental Funds Financial Analysis of the City s Funds The City s most significant governmental fund is the general fund. The general fund is the primary operating fund of the City. At the end of 2014, total fund balance equaled $7,118,112. Of this amount, $5,274,791 or 74.1% is unassigned and can be used to meet the government s obligations. The general fund has assigned fund balance for Emergency Contingency ($405,873) and Debt Service ($1,437,448). In the current year, total fund balance increased by $348,720 from the 2013 amount of $6,769,392. The reason for this increase was primarily due to an increase in Ad Valorem revenues of $650,119 while expenditures increased by a slightly less amount. The City has four other major governmental funds. These are Street Improvement, Sales Tax, Community Redevelopment and Stormwater Utility. Fund balances declined for Street Improvement and Sales Tax and increased for Community Redevelopment and Stormwater Utility resulting in a net decrease in fund balance of $685,546. The Street Improvement Fund was established to account for gas tax revenues brought in from the state and county to make repairs and maintain street and roads owned by the City. Transportation expenditures exceed gas tax revenues and transfers by $98,283 resulting in a decline in fund balance during The Sales Tax Revenue Fund accounts for projects authorized by the one cent sales tax assessed on retail sales. The more significant capital expenditures during 2014 included: the purchase of new police vehicles ($158,368), a fire truck ($403,839), street improvements ($314,086), and an upgrade of the software system ($230,639). Overall, fund balance decreased by $775,723 for the fiscal year. The Community Redevelopment Fund was established for the revitalization of downtown and east town improvements. The funding source is an incremental increase in property values in these areas. The most significant expenditure is related to the repalacement of sidewalks ($138,672). The fund experienced an increase in fund balance of $156,018 for The Stormwater Utility Fund accounts for the routine billing of utility customers within the City. Capital expenditures were nominal during the year. The fund s largest expenditure was for street sweeping ($59,433). Revenues exceeded expenditures resulting in an increase in fund balance of $32,442 for Proprietary Funds The City s proprietary fund provides the same type of information as found in the government-wide financial statements but in more detail. The City s Water and Sewer fund had net position of $44,554,481 at September 30, The largest portion of this ($32,764,485) is the Net Investment in Capital Assets. Unrestricted net position of $6,838,507 represents a decline from the prior year of $245,675. Expenses in the fund were operational in nature. Net Position for the Water and Sewer fund decreased $282,189 during the year. Revenues were slightly higher than in 2013 with expenses increasing by $608,259 over prior year. Transfers to other funds totaled $1,410,000 which represents a modest decrease over

34 Management Discussion and Analysis Page 10 of 13 General Fund Budgetary Highlights The table below identifies the changes from original budget to the final budget. The fluctuations are relatively minor with the change in Public Safety of $258,847 being the largest change. This budget adjustment was necessary to cover personal services and retirement costs. Original Budget Final Budget Change General Government $ 4,571,043 $ 4,386,143 $ (184,900) Public Safety 6,992,389 7,251, ,847 Transportation 143, ,072 3,444 Culture/Recreation 1,692,068 1,736,746 44,678 Capital Outlay / Other 98, ,496 12,620 $ 13,498,004 $ 13,632,693 $ 134,689 Actual Expenditures Final Budget Difference General Government $ 4,197,717 $ 4,386,143 $ 188,426 Public Safety 6,970,012 7,251, ,224 Transportation 125, ,072 21,833 Culture/Recreation 1,604,938 1,736, ,808 Capital Outlay / Other 84, ,496 26,516 $ 12,982,886 $ 13,632,693 $ 649,807 Actual expenditures to final budget also show the most significant fluctuation in the general government function. This below budget year end comparison is possible due to continued frugal spending polies and the continuing monitoring of spending level by the City s Executive Team. Capital Assets The largest investment of the City is the investment in Capital Assets. Capital Assets decreased approximately $1,200,000. Significant capital purchases included: the completion of a wastewater expansion project and the completion of a booster station during the year offset by an increase in depreciation expense. 14

35 Management Discussion and Analysis Page 11 of 13 Governmental Activities Business-type Activities Total Land $ 3,885,803 $ 3,885,803 $ 2,307,117 $ 2,307,117 $ 6,192,920 $ 6,192,920 Infrastructure - Retention Ponds 1,921,711 1,921, ,921,711 1,921,711 Infrastructure - Right-of-w ay 23,664,796 23,665, ,664,796 23,665,156 Construction in Progress 1,224, , , ,589 1,660,820 1,807,777 Buildings 13,119,019 13,119,019 1,074,513 1,040,680 14,193,532 14,159,699 Improvements Other than Buildings 2,473,932 2,358,609 62,983,097 61,685,465 65,457,029 64,044,074 Equipment 5,418,009 5,201,591 6,478,382 6,389,656 11,896,391 11,591,247 Vehicles 4,944,851 4,939, ,944,851 4,939,011 Infrastructure - Roads and Streets 32,872,070 32,270, ,872,070 32,270,404 89,524,595 88,242,492 73,279,525 72,349, ,804, ,591,999 Less: Accumulated Depreciation (26,826,915) (25,537,446) (33,467,470) (31,303,589) (60,294,385) (56,841,035) Capital Assets, net $ 62,697,680 $ 62,705,046 $ 39,812,055 $ 41,045,918 $ 102,509,735 $ 103,750,964 Long-Term Debt The City s total long term debt decreased by $983,772 during the current fiscal year. Scheduled payments on the Revolving Loans totaled $518,772 and the Multi-Purpose bond was decreased $465,000. Compensated absences decreased in the amount of $519,860, and other post-employment benefits increased $197,456. Governmental Activities Business-type Activities Total Multi-purpose Bond (1997) $ 1,350,000 $ 1,640,000 $ - $ - $ 1,350,000 $ 1,640,000 Multi-purpose Bond (2004) 760, , , ,000 State revolving loans - - 2,278,677 2,593,002 2,278,677 2,593,002 State revolving loans - - 4,768,894 4,973,341 4,768,894 4,973,341 $ 2,110,000 $ 2,575,000 $ 4,768,894 $ 4,973,341 $ 9,157,571 $ 10,141,343 Economic Factors and Next Year s Budgets and Rates The unemployment rate at the end of September 2014 for Lake County was 5.4% as compared to the 6.9% as of September The economy has been affected more in this area and is representative of the state as a whole. Lake County as well as the majority of Central Florida relies heavily on winter residents. Lake County is also part of a larger Metropolitan Statistical Area (MSA) consisting of Lake, Orange, Osceola and Seminole counties. The focal point of the area is Orlando, which relies on tourism to flourish. Lake County s unemployment is a slight.4% higher than the MSA,.2% less than the State, and.9% less than the nation. Lake County unemployment rate has decreased significantly in the past year as it appears that the economic recovery is alive and well and people are returning to the workforce. 15

36 Management Discussion and Analysis Page 12 of 13 The following is a summary of the applicable unemployment rates for Eustis, the State, and the MSA: Region Name Previous year 9/2013 Current year 9/2014 Lake County 6.9% 5.4% Orlando MSA 6.0% 5.0% State of Florida 6.8% 5.6% United States 7.2% 6.3% The City s Ad-Valorem tax profile is as follows: Population 2014 Estimated Taxable Value 2014 Per Capita Taxable Value 2014 Eustis 19,214 $ 758,881,269 $39,496 Leesburg 20,463 $1,118,529,923 $54,661 Population 2013 Actual Taxable Value 2013 Per Capita Taxable Value 2013 Eustis 18,573 $ 731,877,188 $39,405 Leesburg 20,265 $1,115,945,021 $55,067 The tax base for the City is composed of real property, personal property and centrally assessed property. The value of such property increased 3.6% compared to the previous year. The additional property tax exemption and the weakened economy have hurt values and revenue. Compared to Leesburg, with a similar population, Eustis has fewer dollars to distribute, indicating a residential market with fewer commercial owners. The cost is lower which usually leads to a higher millage rate. Leesburg s in 2013 is $3.934, compared to Eustis at $ per $1,000 of value. This past year has seen slow but steady growth. The City continues to increase in population with the growth rate increasing from.5% in 2012 to 3.4% in The City relies on information provided by the state in forecasting many revenue streams. Other factors which must be considered in preparing the budgets for the City include: The restriction of surplus to include the charter amendment as well as the reserve policy. Reduction in the ability to raise millage rates. A slight increase of taxable values due to new construction. The 2014 property values increased by 3.6%. Utilization of surplus to avoid further service reductions. The signs of a recovery continue and there has been a decrease in closures and layoffs. Florida in particular appears to have been hit harder than the country as a whole. Within Florida the Orlando Metropolitan Statistical Area felt the economic crunch more than the state and Lake County in particular has been struggling with unemployment. The least amount of unemployment was reported in Monroe County at 3.2%, while the heaviest unemployment rate was in Hendry County at 8.4% with the average rate of 5.6%. 16

37 Management Discussion and Analysis Page 13 of 13 Requests for Information This financial report is designed to provide a general overview of the City of Eustis s finances for all those with an interest in the government s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: City of Eustis Colleen J. Scott, CPA, CGFO, CPM Interim Finance Director P.O. Drawer 68 Eustis, FL Phone: (352)

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39 BASIC FINANCIAL STATEMENTS The basic financial statements include integrated sets of statements as required by the GASB. The sets of statements include: Government-Wide Financial Statements Fund Financial Statements: Government Funds Proprietary (Enterprise) Funds Fiduciary Funds In addition, the notes to the financial statements are included to provide information that is essential to the user s understanding of the basic financial statements.

40 STATEMENT OF NET POSITION CITY OF EUSTIS, FLORIDA September 30, 2014 Business Governmental Type Assets Activities Activities Total Cash $ 11,064,032 $ 12,211,380 $ 23,275,412 Investments 1,251,163-1,251,163 Receivables, Net: Accounts 985, ,254 1,675,008 Interest 940 1,038 1,978 Inventory - 157, ,133 Due from Other Governmental Units 3,452-3,452 Pension Asset 415, ,287 Other Assets 39,342-39,342 Capital Assets: Capital Assets, Not Being Depreciated 30,696,714 2,743,533 33,440,247 Capital Assets, Being Depreciated 58,827,881 70,535, ,363,873 (Accumulated Depreciation) (26,826,915) (33,467,470) (60,294,385) Total Assets 76,457,650 52,870, ,328,510 Liabilities Accounts Payable and Accrued Liabilities 1,445, ,675 2,251,860 Long-term Liabilities: Due Within One Year 712, ,528 1,294,445 Due in More Than One Year 3,508,637 6,928,176 10,436,813 Total Liabilities 5,666,739 8,316,379 13,983,118 Net Position Net Investment in Capital Assets 60,587,680 32,764,484 93,352,164 Restricted for: Library 94,372-94,372 Public Safety 227, ,192 Culture and Recreation 200, ,429 Capital Projects 1,600,733 3,199,068 4,799,801 Renewal and Replacement - 1,752,421 1,752,421 Community Development 1,097,040-1,097,040 Road and Street Expenses 374, ,855 Cemetery Expenses 253, ,717 Unrestricted 6,354,893 6,838,508 13,193,401 Total Net Position $ 70,790,911 $ 44,554,481 $ 115,345,392 See accompanying notes. 19

41 STATEMENT OF ACTIVITIES CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Service Contributions Contributions Governmental Activities General Government $ 5,072,134 $ 1,430,410 $ - $ - Public Safety 7,626, ,010 10,883 - Physical Environment 276, ,916 - Transportation 2,867, Culture and Recreation 1,900, , Interest and Fees on Long-term Debt 40, Total Governmental Activities 17,783,678 2,604,708 10,883 - Business-type Activities Water and Sewer $ 7,779,993 $ 8,212,792 $ - $ 669,860 General Revenues Taxes: Property Taxes Utility Service Taxes Franchise Fees State Shared Revenues (Unrestricted) Investment Income Miscellaneous Transfers Total General Revenues, Special Items and Transfers Change in Net Position Net Position, Beginning of Year Net Position, End of Year See accompanying notes. 20

42 Net (Expense) Revenue and Change in Net Assets Primary Government Governmental Business-Type Activities Activities Total $ (3,641,724) $ - $ (3,641,724) (7,422,120) - (7,422,120) 435, ,286 (2,867,866) - (2,867,866) (1,631,423) - (1,631,423) (40,240) - (40,240) (15,168,088) - (15,168,088) $ 1,102,659 $ 1,102,659 5,377,109-5,377,109 1,472,855-1,472,855 1,796,581-1,796,581 4,496,256-4,496,256 79,345 18,648 97, ,457 6, ,961 1,410,000 (1,410,000) - 15,258,603 (1,384,848) 13,873,755 90,515 (282,189) (191,674) 70,700,396 44,836, ,537,066 $ 70,790,911 $ 44,554,481 $ 115,345,392 See accompanying notes. 21

43 Street Sales Tax Community General Improvement Revenue Redevelopment Fund Fund Fund Fund Assets Cash $ 6,258,484 $ 553,497 $ 1,670,691 $ 905,946 Investments 1,251, Receivables, Net: Accounts 676,931 81, ,202 - Interest Due from Other Governmental Units 3, Other Assets 39, Total Assets 8,229, ,772 1,778, ,026 Liabilities and Fund Balances BALANCE SHEET ALL GOVERNMENTAL FUNDS CITY OF EUSTIS, FLORIDA SEPTEMBER 30, 2014 Liabilities Accounts Payable and Accrued Liabilities 1,111,836 67, ,244 12,594 Total Liabilities 1,111,836 67, ,244 12,594 Fund Balances Nonspendable: Library Trust Donations Restricted for: Voter Approved 1Cent Sales Tax - - 1,600,733 - Public Safety Impact Fees Culture and Recreation Impact Fees Ordinance - Community Development Specific Contributions Gas Tax - 374, Redevelopment District ,432 Police Fines and Forfeitures Cemetery - Chapter 22 of Code Committed to: Specific Contributions for Roads and Trees - 192, Ordinance - Stormwater Management Assigned to: Emergency Contingency 405, Designation per resolution-debt Service 1,437, Unassigned: 5,274, Total Fund Balance 7,118, ,706 1,600, ,432 Total Liabilities and Fund Balances $ 8,229,948 $ 634,772 $ 1,778,977 $ 906,026 See accompanying notes. 22

44 Stormwater Other Total Utility Governmental Governmental Fund Funds Funds $ 628,769 $ 1,046,645 $ 11,064, ,251, ,594 3, , , , ,418 1,050,542 13,344,683 11,105 64,340 1,445,185 11,105 64,340 1,445,185-30,195 30, ,600, , , , , , ,608-64,177 64, , ,432-42,487 42, , ,717-6, , , , , ,437, ,274, , ,202 11,899,498 $ 744,418 $ 1,050,542 $ 13,344,683 See accompanying notes. 23

45 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS CITY OF EUSTIS, FLORIDA September 30, 2014 Total Fund Balances of Governmental Funds $ 11,899,498 Amounts Reported for Governmental Activities in the Statement of Net Position are Different Because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. The cost of the assets is $89,524,595, and the accumulated depreciation is $26,826, ,697,680 Prepaid net pension obligation does not represent a financial asset and, therefore, not reported in governmental funds. 415,287 Long-term liabilities are not due and payable in the current period and accordingly are not reported in the governmental funds. Long-term liabilities at year end consist of: Auto Financing OPEB Liability (718,321) Revenue Bonds and Certificates (2,110,000) Compensated Absences (1,393,233) Total Net Position of Governmental Activities $ 70,790,911 See accompanying notes. 24

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47 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUNDS CITY OF EUSTIS, FLORIDA FOR THE FISICAL YEAR ENDED SEPTEMBER 30, 2014 Street Sales Tax Community General Improvement Revenue Redevelopment Revenues Fund Fund Fund Fund Ad Valorem $ 5,377,109 $ - $ - $ - Franchise Fees 1,472, Utility Service Taxes 1,796, State Revenue Sharing 1,887, Other Intergovernmental Revenues 28, ,148 1,564, ,913 Permits & Fees 579, Fines and Forfeitures 46, Charges for Services 1,110, Miscellaneous: Interest 69, ,147 2,269 On-Behalf Payment Pensions 203, Other Sources 167, , Total Revenues 12,739,394 1,081,610 1,566, ,182 Expenditures Current: General Government and Administration 4,197, ,730 Public Safety 6,970, On-Behalf Payment Pensions 203, Physical Environment Transportation 125,239 1,599,326-2,324 Culture and Recreation 1,604, Nondepartmental - Capital Outlay 84,980-2,068, ,975 Debt Service: Principal Payments ,000 - Interest and Fees ,990 - (Total Expenditures) (13,185,985) (1,599,326) (2,557,217) (242,029) Excess (Deficiency) of Revenues Over (Under) Expenditures (446,591) (517,716) (990,473) (76,847) Other Financing Sources (Uses) Transfers in 1,260, , , ,865 Transfers Out (465,315) Total Other Financing Sources (Uses) 795, , , ,865 Net Change in Fund Balances 348,720 (98,283) (775,723) 156,018 Fund Balances, Beginning of Year 6,769, ,989 2,376, ,414 Fund Balances, End of Year $ 7,118,112 $ 567,706 $ 1,600,733 $ 893,432 See accompanying notes. 26

48 Stormwater Other Total Utility Governmental Governmental Fund Funds Funds $ - $ - $ 5,377, ,472, ,796, ,887, ,636, ,565-20,841 67, ,916-1,822,143 1,487 2,689 79, , , , , ,861 16,464,194-16,500 4,240,947-19,984 6,989, , , , ,726,889-40,593 1,645, , ,756 2,835, , ,990 (421,528) (396,833) (18,402,918) 291,875 (198,972) (1,938,724) - 7,700 2,135,374 (259,433) (626) (725,374) (259,433) 7,074 1,410,000 32,442 (191,898) (528,724) 700,871 1,178,100 12,428,222 $ 733,313 $ 986,202 $ 11,899,498 See accompanying notes. 27

49 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Net Change in Fund Balances - Total Governmental Funds $ (528,724) Amounts Reported for Governmental Activities in the Statement of Activities are Different Because: Governmental funds report capital purchases as expenditure. However, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives and reported as depreciation expense. This reconciling item is the amount by which net depreciation expense of $1,887,203, exceeds capital purchases net of of CIP put into service of $2,042,014 less other capital assets disposals of $162,177. (7,366) Repayment of bond and note principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. This is a list of those repayments: Principal Repayments: 465,000 Bonds and Certificates Amortization of Other Asset (16,250) Change in prepaid net pension obligation does not represent a financial asset and, therefore, not reported in governmental funds. (144,919) Some expenses reported in the statement of activities such as compensated absences do not require the use of current financial resources and are not reported as expenditures in governmental funds: OPEB Current Year change in liability (155,417) Compensated Absences 478,191 Change in Net Position of Governmental Activities $ 90,515 See accompanying notes. 28

50 STATEMENT OF NET POSITION PROPRIETARY FUNDS CITY OF EUSTIS, FLORIDA SEPTEMBER 30, 2014 Assets Business-Type Activities Water and Sewer System Fund Current Assets Cash $ 6,653,250 Restricted Assets Available for Current Liabilities 145,155 Accounts Receivable, Net 689,254 Accrued Interest Receivable 1,038 Inventory 157,133 Total Current Assets 7,645,830 Noncurrent Assets Restricted Assets: Sinking Fund 145,155 Renewal and Replacement Account 1,752,421 Customer Deposits 461,486 Water Impact Fees 2,110,638 Sewer Impact Fees 1,088,430 Less: Portion Classified as Current (145,155) Total Restricted Assets 5,412,975 Property, Plant and Equipment: Land 2,307,117 Improvements Other Than Buildings 62,983,097 Buildings 1,074,514 Equipment 6,478,381 Construction in Progress 436,416 (Accumulated Depreciation) (33,467,470) Total Property, Plant and Equipment - Cost Less Depreciation 39,812,055 Total Noncurrent Assets 45,225,030 Total Assets $ 52,870,860 See accompanying notes. 29

51 Liabilities Business-Type Activities Water and Sewer System Fund Current Liabilities Payable from Current Assets Accounts Payable $ 345,189 Loan Payables - Current Payable 534,060 Compensated Absences 47,468 Total Current Liabilities Payable from Current Assets 926,717 Current Liabilities Payable from Restricted Assets Deposits 461,486 Total Current Liabilities Payable from Restricted Assets 461,486 Total Current Liabilities 1,388,203 Long-term Liabilities State Revolving Loan Payable 1,955,194 State Revolving Loan Payable 4,558,317 Other Post Employment Benefits 165,456 Compensated Absences 249,209 Total Long-term Liabilities 6,928,176 Total Liabilities 8,316,379 Net Position Net Investment in Capital Assets 32,764,484 Restricted Net Position Impact Fees 3,199,068 Renewal and Replacement 1,752,421 Unrestricted Net Position 6,838,508 Total Net Position $ 44,554,481 See accompanying notes. 30

52 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Business-Type Activities Water and Sewer System Fund Operating Revenues Charges for Services (Net of Bad Debt Expense of $ 9,362) $ 8,110,175 Permits and Fees 102,617 Other Miscellaneous Revenues 6,504 Total Operating Revenues 8,219,296 Operating Expenses Personal Services 2,206,806 Operating Expenses 2,689,819 Professional Services 121,287 Depreciation and Amortization 2,257,048 Insurance 302,500 (Total Operating Expenses) (7,577,460) Operating Income (Loss) 641,836 Non-operating Revenues (Expenses) Interest Earnings 18,648 Interest Expense (202,533) Total Non-operating Revenues (183,885) Income (Loss) Before Transfers 457,951 Transfers and Capital Contributions Capital Contributions 669,860 Transfers to Other Funds (1,410,000) Total Transfers and Capital Contributions (740,140) Change in Net Position (282,189) Net Position, Beginning of Year 44,836,670 Net Position, End of Year $ 44,554, See accompanying notes

53 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Business-Type Activities Water and Sewer System Fund Cash Flows from Operating Activities Cash Received from Customers $ 8,205,955 Cash Payments to Suppliers for Goods and Services (3,020,592) Cash Payments for Employee Services (2,206,436) Net Cash Provided by (Used in) Operating Activities 2,978,927 Cash Flows from Noncapital Financing Activities Net Transfers to Other Funds (1,410,000) Interfund Payable (65,436) Net Cash Provided by (Used in) Noncapital Financing Activities (1,475,436) Cash Flows from Capital and Related Financing Activities Acquisition and Construction of Capital Assets (353,326) Principal Payments on Revenue Bond Maturities and State Revolving Loan (518,771) Interest Paid on Revenue Bonds and Revolving Loan (236,311) Net Cash Provided by (Used in) Capital and Related Financing Activities (1,108,408) Cash Flows from Investing Activities Interest 20,599 Net Cash Provided by (Used in) Investing Activities 20,599 Net Increase (Decrease) in Cash and Cash Equivalents 415,682 Cash and Cash Equivalents, Beginning of Year 11,795,698 Cash and Cash Equivalents, End of year $ 12,211,380 See accompanying notes. 32

54 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 (Concluded) Reconciliation of Cash and Cash Equivalents to Balance Sheet Business-Type Activities Water and Sewer System Fund Total Unrestricted Cash and Investments per the Balance Sheet : Cash and Cash Equivalents $ 6,653,250 Restricted Assets Available for Current Liabilities 145,155 Total Restricted Cash and Investments Per the Balance Sheet 5,412,975 Total Cash and Cash Equivalents 12,211,380 Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities Operating Income (Loss) $ 641,836 Adjustments to Reconcile Operating Income (Loss) to Cash Provided by (Used in) Operating Activities: Depreciation 2,257,048 Provision for Uncollectible Accounts 122,444 Decrease (Increase) in Assets: Accounts and Interest Receivable (135,785) Inventories 50,164 Increase (Decrease) in Liabilities: Accounts Payable 10,099 Utility Deposits 32,751 Accrued Expenses 370 Net Cash Provided by (Used in) Operating Activities $ 2,978,927 See accompanying notes. 33

55 STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUND TYPE CITY OF EUSTIS, FLORIDA SEPTEMBER 30, 2014 Assets Pension Trust Funds Cash and Cash Equivalents $ 2,406,091 Receivables Contributions 81,028 Interest 40,129 Total Receivables 121,157 Investments, at Fair Value Fixed Income Securities 5,126,191 Equities and Mutual Funds 14,724,185 Total Investments 19,850,376 Total Assets 22,377,624 Liabilities Accounts Payable 47,689 Net Position Restricted for Pension Benefits $ 22,329,935 See accompanying notes. 34

56 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUND CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Pension Trust Funds Additions Contributions: Plan Member $ 129,190 State 203,099 City 899,088 Total Contributions 1,231,377 Investment Income (Loss): Net Appreciation (Depreciation) in Fair Value of Investments 1,696,741 Interest 167,733 Dividend Income 332,078 Total Income on Investments 2,196,552 Less: Investment Management Fees (165,659) Net Investment Income 2,030,893 Total Additions 3,262,270 Deductions Pension Payments (918,849) Administration (45,931) Total Deductions (964,780) Change in Net Position 2,297,490 Net Position, Beginning of Year, Restated 20,032,445 Net Position, End of Year $ 22,329,935 See accompanying notes. 35

57 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA Note 1 - Description of Funds and Summary of Significant Accounting Policies The financial statements of the City of Eustis (the City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Significant City accounting policies are described below. Reporting Entity The City of Eustis, Florida was incorporated in 1883 under the laws of the State of Florida and operates under the council manager form of government under its charter adopted pursuant to the "Municipal Home Rule Powers Act" as defined in Florida Statutes, Chapter 166. The original charter was effective January 1, 1958, and became a law without the Governor's approval. The document was filed in the Secretary of State's office on May 30, The City of Eustis Charter was adopted by laws of Florida Chapter and amended by ordinance and adopted by referendum on March 11, 1992 and April 6, In evaluating the City as a reporting entity, management has addressed all potential component units (traditionally separate reporting entities) for which the City may or may not be financially accountable and, as such, be includable within the City's financial statements. The City (the primary government) is financially accountable if it appoints a voting majority of the organization's governing board and 1) it is able to impose its will on the organization or 2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the City. Additionally, the primary government is required to consider other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. Management has determined that there is one includable component unit. City of Eustis Community Redevelopment Trust Fund Established by Resolution 90-39, 40, and 41, the City created the Downtown and East Town Redevelopment Agency in November of This is a dependent taxing district established in accordance with Chapter 163, Part III, Florida Statutes. Notification of affected taxing agency was done in compliance with Chapter , Part III, Florida Statutes. The incremental annual increase in tax over the base year will be used to fund projects designed to enhance and improve the described area. The City Commission, being the duly elected governmental body for the designated area, passed Resolution 90-41, which established the City as the Redevelopment Agency for the purpose of carrying out the community redevelopment programs and plans within the area. Through Resolution 90-41, the City established the Community Redevelopment Trust Fund to account for all transactions generated by this special revenue fund. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported 36

58 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Government-wide and Fund Financial Statements (Concluded) by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and; 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Fiduciary funds are excluded from the government-wide financial statements. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this rule are payments-in-lieu of taxes and other charges between the government s water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. 37

59 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Fund Financial Statements (Concluded) Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise fees, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. The City operates the following major governmental funds: General Fund - To account for all financial resources of the City except those required to be accounted for in another fund. Street Improvement Fund - To account for the City s share of motor fuel tax revenues that are legally restricted to street maintenance programs. Sales Tax Revenue Fund - To account for the City s share of the voted one-cent infrastructure sales tax, which is restricted to capital projects. Community Redevelopment Trust Fund To account for the activity within the special revenue district which has been established. The revenue is based on the incremental property values since the establishment of the fund in Stormwater Utility Fund To account for the activity within the special revenue district which has been established. The revenue is based on a monthly assessment of residential and commercial property for the management of storm run-off water. The City operates the following major proprietary fund: Water and Sewer Utility System Fund - To account for the fiscal activity of providing water and wastewater services to residential and commercial customers. Additionally, the City reports the following fund types: The Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted to expenditure for specified purposes. The Pension Trust Funds account for the City s Firefighters and Police Officers Retirement Systems, which accumulate resources for pension benefit payments to qualified retiring employees. They are excluded from the government-wide financial statements because they are fiduciary in nature and do not represent resources available for operations. 38

60 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in fund balance. All proprietary funds and pension trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet or statement of plan assets. Proprietary fund-type operating statements present increases (e.g., revenues) and decreases (e.g. expenses) in net position. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent privatesector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. Proprietary funds distinguish operating revenues and expenses from non-operating revenues and expenses. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the City water and sewer utility system fund is charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The modified accrual basis of accounting is used by all governmental fund types. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The government considers property taxes as available if they are collected within 60 days after year-end. A 60 day availability period is used for revenue recognition for all other governmental fund revenues. Expenditures are recorded when the related fund liability is increased. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. All major revenues, except property taxes and licenses, are considered measurable and available and, as such, susceptible to accrual. 39

61 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Basis of Accounting (Concluded) The accrual basis of accounting is utilized by proprietary fund types and pension trust funds. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded to reserve that portion of applicable appropriation, is employed in governmental funds. Any encumbrance outstanding at year-end is canceled. Assets, Liabilities and Fund Equity Cash and Investments Cash includes amounts in demand deposits as well as short-term investments with an original maturity date within three months of the date acquired by the government. Governmental fund investments, proprietary fund investments, and pension fund investments are reported at fair market value. With exception of the pension fund investments, the City's investments include certificates of deposit and U.S. Treasury notes with maturities at purchase of greater than one year. The certificates of deposit are recorded at cost plus accrued interest. The U.S. Treasury notes are recorded at fair market value. There was no concentration of credit risk at September 30, Receivables Water and sewer charges are recognized when billed. The water and sewer system uses the allowance method of bad debt recognition. All receivables are shown net of an allowance for doubtful accounts of $ 1,386,735 at September 30, This amount is distributed to funds as follows: Water & Sewer Fund $ 1,186,733 General Fund 69,956 Stormwater Utility Fund 130,046 Due from Other Governmental Units Those amounts that represent a claim against another government are measurable and have been accrued. Short-term Interfund Receivables/Payables During the course of operations, numerous transactions occur between individual funds for 40

62 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Fund Equity (Continued) goods provided or services rendered. These receivables and payables are classified as "due from other funds" or "due to other funds" on the balance sheet. Short-term interfund loans are classified as interfund receivables/payables. Inventories Inventories are priced at lower of cost or market using the first-in, first-out method. Inventories are maintained by the water and sewer system fund. Restricted Assets The restricted assets shown on the enterprise fund balance sheet represent those assets of the enterprise fund which are earmarked for specific purposes and cannot be used for paying general obligations of the fund. The use of these restricted funds versus the use of unrestricted funds for these specific purposes is determined on a case-by-case basis. The corresponding liability designated as payable from restricted assets represents the current maturities for which the restricted assets are accumulated. Fund Balance Policy Reserves were established in writing in Resolution to address the need to maintain sufficient funds to be available at the end of each year. The resolution describes policies and practices to be used by the City in the conduct of its financial affairs. Target reserves were provided for each type of fund maintained by the City. It formalizes guidelines for constructing the budget and properly administering the organization's finances. The initial target had the General and Community Redevelopment Trust Funds to maintain at least a 180 day reserves. Street Improvement, Water & Sewer and Stormwater Revenue were to maintain 90 day reserves. The reserves of the Law Enforcement Trust, Reclaim Water Project, Water & Sewer Renewal & Replacement, Fire and Police Pension, Greenwood Cemetery, Fire-Police- Library-Recreation-Water-Sewer Impact and Community Development Funds did not have Reserves designated due their established nature of operation. Due to the current economic climate it became necessary to amend the target reserve through resolution for the General Fund to reflect the following: FYE Days FYE Days FYE Days FYE Days FYE Days Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Property, plant, and equipment with initial, individual costs that equal or exceed $1,000 and estimated useful lives of over one year are recorded as capital assets. Roads, bridges, and sidewalks are capitalized when their initial costs equal or exceed $25,000 and possess estimated useful lives of more than one year. Capital assets are recorded at historical cost or estimated 41

63 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Fund Equity (Continued) historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of major business-type activities is included as part of the capitalized value of the assets constructed. Capital asset purchases are recorded as capital outlay expenditures in the fund level governmental funds in the year of acquisition. Property, plant, and equipment are depreciated using the straight-line method over the following estimated useful lives: Useful Lives Buildings Years Land Improvements Years Equipment 3-40 Years Infrastructure Years Expenditures for repairs and maintenance are expensed when incurred. Additions, major renewals and replacements that increase the useful lives of the assets are capitalized. Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. Compensated Absences Compensated absences are recorded in governmental funds only if the amounts have matured. As of September 30, 2014 the city had paid out all sick and vacation leave which had accrued to former employees. All employees with accrued sick and vacation are paid out only if the employee retires, or leaves the City in good standing. In proprietary funds, the amount of compensated absences associated with employee vacations that are recorded as expenses represent the amounts accrued during the year and the amount of compensated absences associated with employee sick leave is based on the historical annual trend of adjusted sick leave payments made at retirement. The entire liability for compensated absences of these funds is reflected in the respective financial statements split between the current and noncurrent portions. On-Behalf Payments for Fringe Benefits The City receives on-behalf payments from the State of Florida to be used for the Police Officers and Firefighters Retirement Plan Contributions. On-behalf payments to the City total $203,099 for the fiscal year ended September 30, These payments are currently recorded as revenue in the Pension Trust Fund. 42

64 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Fund Equity (Continued) Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities statement of net position. Bond premiums and discounts are deferred and amortized over the term of the bonds using the effective interest method. Issuance costs are expensed per GASB 65. Fund Balance 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 constraints on the specific purposes for which amounts in the respective governmental funds can be spent. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the City Commission has provided otherwise in its commitment or assignment actions. When both restricted and unrestricted resources are legally available for use, it is the City s policy to use restricted resources first, then unrestricted resources as they are needed. The classifications used in the governmental fund financial statements are as follows: 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 donations to the Library Trust Fund which must maintain the principal. Only the interest earnings may be used. 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 Fines and Forfeitures as being restricted because their use is restricted by State Statute for police investigative expenditures. The redevelopment funds are restricted to a designated area of the City and as such are exclusive to that area alone. Infrastructure Projects are restricted by State Statute and County laws and are legally segregated for funding of infrastructure improvements. Other funds are restricted to library operations as well as other specific developer agreements obligating funds to a specific use. 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) that was employed when the funds were initially committed. This classification also includes contractual obligations to 43

65 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Fund Equity (Continued) the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. 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 monies allocated to future budgetary years to assist in weathering the current economic crisis. Unassigned: This classification includes the residual fund balance for the General Fund and the amount established for Minimum Funding which represents the portion of the General Fund balance that has been established by Resolution 11-59, as amended throughout the year by resolutions as needed. Revenues, Expenditures, and Expenses Interest Income Interest income resulting from pooling of cash in a master bank account is allocated to the respective fund based on its proportionate share. Unbilled Revenue Unbilled revenue, which results from cyclical billing practices, is accrued at the end of the fiscal year. Capital Contributions Subsidies to proprietary funds, which finance either capital or current operations, are recorded as non-operating revenue when earned. The City s policy requires restriction of all moneys collected as impact fees. These fees represent a capacity charge for the proportionate share of the cost of expanding, over sizing, separating or constructing new additions to the water and sewer system. The City is obligated to expend these funds only to provide expanded capacity to the system. Deposits received which reserve capacity in the City s future water and sewer facilities are recorded as a liability upon receipt. After completion of all legal requirements as stipulated by the City s water and sewer treatment policy, the moneys are recorded as non-operating revenue in the year the requirements are met. The City has pledged impact fees to meet expansion bond debt service requirements, and any additional revenue (by bond covenant) is set aside as a restriction of net position to be used for either additional system expansion projects or principal repayment. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/ expenses in the fund that is reimbursed. All interfund transactions are reported as transfers (see Note 10). 44

66 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Revenues, Expenditures, and Expenses (Continued) Property Tax Recognition The key dates in the property tax cycle (latest date where appropriate) are as follows: Lien Date January 1 Assessment Roll Validated July 1 Millage Resolution Approved September 30 Beginning of Fiscal Year for Which Taxes Have Been Levied October 1 Tax Bills Rendered and Due November 1 Property Taxes Payable: Maximum Discount November 30 Delinquent April 1 Tax Certificates Sold May 31 Property taxes are collected and remitted by the County Tax Collector. The City does not accrue its portion of County held tax sale certificates because such amounts are neither measurable nor available at balance sheet date. The statutory maximum tax rates, which may be assessed by the City, are as follows: Ad Valorem Millage Utility Tax: 10 Mills Electric, Gas and Water 10% Telecommunications 5.82% Adoption of New Accounting Standards During the fiscal year ending September 30, 2014, the City adopted the following new accounting standards GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. These standards establish standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures, effectively reclassifying certain assets as deferred inflows of resources and certain liabilities as deferred outflows of resources on the statement of net position. As a result of implementing GASB 65, revenues previously recorded as deferred revenue in governmental funds until both measurable and available are reported as deferred inflows of resources until such time the revenue becomes available and debt refunding amounts previously recorded in enterprise funds as contra-liability are reported as deferred outflows of resources until fully amortized over the life of the debt. 45

67 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Concluded) Adoption of New Accounting Standards GASB Statement No. 67, Financial Reporting for Pension Plans an Amendment of GASB Statement No. 25 This Statement replaces the requirements of Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 50, Pension Disclosures, as they relate to pension plans that are administered through trusts or equivalent arrangements that meet certain criteria. The requirements of Statements 25 and 50 remain applicable to pension plans that are not administered through trusts covered by the scope of this Statement and to defined contribution plans that provide postemployment benefits other than pensions. recognizes cost of issuance of bonds as an expense, therefore the adoption of this statement resulted in an increase to the cost of issuance expense and a decrease to the unamortized bond issuance costs. Future Adoption of New Accounting Standards The City anticipates adopting the following new accounting standard within the next fiscal year: GASB Statement No. 68, Accounting and Financial Reporting for Pension Plans an Amendment of GASB Statement No. 27 are effective for the City s 2015 fiscal year ending September 30, In addition to improving the disclosures regarding pension plans in the notes to the financial statements, GASB 68 will require the City to retroactively record the Unfunded Actuarial Liability (UAL) as a Net Pension Liability on its Statement of Net Position, which will have the effect of decreasing the City s Net Position. Note 2 - Stewardship, Compliance and Accountability Deficit Fund Equity of Individual Funds There were no funds with deficit fund balances or retained earnings at September 30, Infrastructure In 2003 and 2004, the City recorded all infrastructure assets. The City has elected to use the straight-line depreciation method in relation to long- lived infrastructure assets. An independent engineering consultant performed an assessment of the condition of the City infrastructure providing an independent inventory of the City s road and stormwater system. Reconciliation between the City s Geographic Information System (GIS) and the consultant s independent inventory provided a sound basis to confirm the data within the GIS system. Working with the Public Works Department, an inventory was established. Having established an inventory of road surface, land under the road, right of ways, curbs, gutters, sidewalks, and stormwater the independent consultant and the City working together collectively were able to develop the elements necessary for replacement valuation. The replacement values were discounted, using a nationally recognized discount index, to the year placed in service and then depreciable assets were depreciated forward using a 35 to 50 year term. 46

68 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 3 - Cash and Investments Cash The Florida Security for Depositors Act identifies those financial institutions that have deposited the required collateral in the name of the treasury of the State of Florida as qualified public depositories. The City places deposits only with qualified public depositories. All cash is either insured by FDIC or Florida's Multiple Financial Institution Collateral Pool. Therefore, all deposits of the City are fully insured and collateralized. The amount of deposits at September 30, 2014, is $ 23,275,412. Investments The City s investment policy states that it may invest surplus public funds in any of the authorized instruments as is provided for in Florida Statutes (16). Authorized investments include the following: The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Section Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency. Interest-bearing time deposits or savings accounts in qualified public depositories, as defined in Section Direct obligations of the U.S. Treasury. Federal agencies and instrumentalities. 47

69 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 3 - Deposits and Investments (Continued) In addition, pension funds may be invested in foreign securities and corporate Stock. Investments made by the City as of September 30, 2014 were as follows: Investments Maturities Ratings Fair Value USB Trust Accounts: Investco Money Market Less than 1 Year N/A $ 1,120,333 GNMA's Average 7 Years AAA 130,830 Firefighter's Pension Trust: Money Market & Cash Equivalents N/A N/A 622,270 U.S. Treasury Bonds & Notes 3 to 5 Years AA+ 138,668 GNMA, FNMA, FHLMC Pools 3 to 28 Years N/A 129,545 Corporate Bonds 2 to 10 Years BBB to AAA 1,392,226 Municipal Bonds 23 to 26 Years AA to AAA 75,339 Equities - Domestic N/A N/A 2,933,619 Mutual Fund Equities N/A N/A 1,507,950 Equities - International N/A N/A 123,130 Unit Investment Trusts N/A N/A 42,867 Police Officers' Pension Trust: Money Market & Cash Equivalents N/A N/A 1,783,821 U.S. Government Agencies Bonds 3 to 25 Years AAA 1,440,074 Corporate Bonds 1 to 21 Years BAA2 to A1 1,838,796 Foreign Bonds & Notes 1 to 10 Years A1 111,543 Foreign Equities N/A N/A 1,170,435 Equities N/A N/A 8,946,184 Total Investments 23,507,630 Cash Deposits 23,275,412 Total Cash and Investments $ 46,783,042 Shown In the accompanying combined balance sheet as follows: Enity-wide - Cash $ 23,275,412 Entity-wide - Investments 1,251,163 Fiduciary - Cash 2,406,091 Fiduciary - Investments 19,850,376 Total $ 46,783,042 48

70 Note 3 - Credit Risk (Continued) NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Credit risk is the risk of loss due to the failure of the security issuer. The City s investment policy limits the investments to obligations with the highest credit quality ratings. Ratings for debt securities are displayed in the above schedule. The State of Florida and has a provision regarding investments which states for bonds and stocks that the corporation is listed on any one or more of the recognized national stock exchanges or on the National Market System of the NASDAQ Stock Market and, in the case of bonds only, holds a rating in one of the three highest classifications by a major rating service. Investment ratings are from Moody s Investors Service, Inc. and Standard and Poor s Ratings Group. Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Government National Mortgage Association (GNMA) investments of the City and the City s pension investments are held in the name of the counterparty, not in the name of the City. Interest Rate Risk Interest rate risk exists when there is a possibility that changes in interest rates could adversely affect an investment s fair value. The weighted average maturity of the City s investments is displayed in the above schedule. The City evaluates securities for other-than temporary impairment on a quarterly basis and more frequently when economic or market concerns warrant. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer and the intent and ability of the City to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in the fair value. In analyzing an issuer s financial condition, the City considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer s financial condition. The City has the ability and intent to hold these securities for the foreseeable future; in all likelihood the City will ultimately net their par value. At the end of the year, securities had appreciated by 0.61% from the City s cost basis. These unrealized gains are related principally to an allocation to the money market account and changes in interest rates. The City has no formal policy with regards to interest rate risk. Concentration of Credit Risk The City s non pension holdings at U.S. Bank (USB) contain approximately 5.32% of the investments. The breakdown is composed of government securities.056 % and money market account 4.77%. As the investments mature the money is deposited into the City master account which is highly liquid and offers an interest rate of 35 basis points. Certificate of Deposits are held by banks that are qualified public depositories of the State of Florida. At the present time the City does not hold any Certificates of Deposit. 49

71 Foreign Currency Risk - The City is not exposed to this type of risk. Note 4 - Capital Assets NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Capital asset activity for the year ended September 30, 2014, was as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities Capital Assets Not Being Depreciated: Land $ 3,885,803 $ - $ - $ 3,885,803 Infrastructure - Retention Ponds 1,921, ,921,711 Infrastructure - Right-of-way 23,665,156 - (360) 23,664,796 Construction in Progress 881,188 1,596,626 (1,253,410) 1,224,404 Total Capital Assets Not Being Depreciated 30,353,858 1,596,626 (1,253,770) 30,696,714 Capital Assets Being Depreciated: Buildings 13,119, ,119,019 Improvements Other Than Buildings 2,358, ,323-2,473,932 Equipment 5,201, ,547 (62,129) 5,418,009 Vehicles 4,939, ,622 (677,782) 4,944,851 Infrastructure (Roads and Streets) 32,270, ,666 (20,000) 32,872,070 Total Capital Assets Being Depreciated 57,888,634 1,699,158 (759,911) 58,827,881 Less Accumulated Depreciation: Buildings (6,464,225) (427,662) (6,891,887) Improvements Other Than Buildings (857,238) (96,756) (953,994) Equipment (4,096,837) (288,428) 60,007 (4,325,258) Vehicles (3,505,887) (304,450) 537,727 (3,272,610) Infrastructure (Roads and Streets) (10,613,259) (769,907) (11,383,166) Total Accumulated Depreciation (25,537,446) (1,887,203) 597,734 (26,826,915) Total Capital Assets Being Depreciated, Net 32,351,188 (188,045) (162,177) 32,000,966 Governmental Activities Capital Assets, Net $ 62,705,046 $ 1,408,581 $ (1,415,947) $ 62,697,680 Business-type Activities Capital Assets Not Being Depreciated: Land $ 2,307,117 $ - $ - $ 2,307,117 Construction in Progress 926, ,380 (1,291,553) 436,416 Total Capital Assets Not Being Depreciated 3,233, ,380 (1,291,553) 2,743,533 Capital Assets Being Depreciated: Buildings 1,040,680 33,833-1,074,513 Improvements Other Than Buildings 61,685,465 1,297,632-62,983,097 Equipment 6,389, ,058 (108,332) 6,478,382 Total Capital Assets Being Depreciated 69,115,801 1,528,523 (108,332) 70,535,992 Less Accumulated Depreciation: Buildings (722,984) (31,909) - (754,893) Improvements Other Than Buildings (25,476,638) (1,949,731) - (27,426,369) Equipment (5,103,967) (294,403) 112,162 (5,286,208) Total Accumulated Depreciation (31,303,589) (2,276,043) 112,162 (33,467,470) Total Capital Assets Being Depreciated, Net 37,812,212 (747,520) 3,830 37,068,522 Business-type Activities Capital Assets, Net $ 41,045,918 $ 53,860 $ (1,287,723) $ 39,812,055 50

72 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 4 - Capital Assets (Concluded) General Government and Administration $ 216,579 Public Safety 385,547 Physical Environment 5,102 Transportation 904,565 Culture and Recreation 375,410 Total Depreciation Expense Governmental Activities $ 1,887,203 Depreciation Expense - Business Type Activities Water and Sewer System $ 2,276,043 Note 5 - Pension Plans General Employees The City has multiple pension plans for its employees. The general employees are currently participating in two plans. Employees hired on or before December 31, 1995, participate in the Florida Retirement System, a multiple-employer, cost-sharing public employee retirement system. Employees hired after December 31, 1995, participate in a defined contribution plan. The costs of administering the plans are paid for with investment earnings. City of Eustis Section 401 Defined Contribution Plan In 1995, the State of Florida allowed a one-time opt-out of the Florida Retirement System for all new employees. The City Commission enacted an ordinance and established a 401 Defined Contribution Plan. ICMA Retirement Corporation is the plan administrator. Payments are made bi-weekly. The effective date of the plan was January 1, Eligibility - Full-time employees are enrolled immediately and part-time employees become participants of the plan after six months of service. There is no minimum age requirement. Participants - There were 129 participants in the plan for the fiscal year ended September 30, Compensation - Means total compensation paid during the plan year except bonuses. Total compensation for fiscal year ended September 30, 2014, was $ 4,679,321. Forfeitures - Shall be applied to future employer contributions. Employer Contributions - Mandatory contribution of 6% of covered payroll is required of the employer. Total contributions for fiscal year ended September 30, 2014, were $292,128. Employee Contributions - A mandatory contribution of 4% is required by the employee. The contributions are pre-taxed. Contributions for fiscal year ended September 30, 2014, were $184,

73 Note 5 - NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Pension Funds (Continued) City of Eustis Section 401 Defined Contribution Plan (Concluded) Normal Retirement - This is the date the participant attains age 62, and shall not exceed the date the participant attains the age of 65. Early Retirement - None. Vesting Schedule - 0 through 4 years 0%, 5 years 100% or 100% at age 62. Distributions - Participants may request immediate distribution upon termination. If not vested, participants receive only what they have contributed to the plan. Miscellaneous - Loans are allowed under the 401 and 457 plans; however, the amount is limited to the amount of the participants contributions and a minimum of $1,000. Repayment is limited to a maximum of 5 years and is repaid bi-weekly via payroll deductions. Transfers from other qualified plans are allowed. Florida Retirement System Plan Description - The City contributes to the Florida Retirement System(FRS), a cost sharing, multiple-employer defined benefit pension plan administered by the Florida Division of Retirement. The Plan provides retirement and disability benefits, cost-of-living adjustments, and death benefits to plan members and beneficiaries. Florida Statutes, Chapter 121 assigns the authority to administer the Plan to the Division of Retirement. The Florida Legislature establishes and amends benefit provisions and contribution levels. The Division of Retirement issues a publicly available financial report that includes financial statements and required supplementary information for the Plan. That report may be obtained by writing to Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida The FRS offers a choice between a defined-benefit plan and a defined-contribution plan ( Investment Plan ). The Investment Plan provides for vesting after one year of creditable service. Under this plan, the employer makes contributions to a participant s account, and the participant directs where the contributions are invested among the plan s investment funds. Upon termination, vested participants receive amounts accumulated in their investment accounts. The defined-benefit plan members are eligible for retirement after vesting, which occurs at six (6) years of creditable service for regular members enrolled prior to July 1, 2011 and eight (8) years of creditable service if enrolled on or after July 1, Normal retirement age is attained at the earlier of thirty (30) or (33) years of creditable service, regardless of age, or retirement at age sixty-two (62) or (65) with at least ten (6) or (8) years of creditable service if enrolled prior to July 1, 2011 or on or after July 1, 2011 respectively. Early retirement may be taken any time after vesting; however, there is a five percent (5%) benefit reduction for each year prior to normal retirement age. Members are also eligible for in-line-of-duty or regular disability benefits if permanently disabled and unable to work. Benefits are computed on the basis of age, average final compensation, and service credit. 52

74 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 5 - Pension Funds (Continued) Funding Policy The FRS has nine (9) classes of membership. Only three (3) classes are applicable to the City s eligible employees. These three (3) classes, with descriptions and contribution rates in effect during the period ended September 30, 2014, are as follows (contribution rates are in agreement with the actuarially determined rates, each including an additional 1.26% health insurance subsidy contribution): Senior Regular Management Drop 7/1/13 through 6/30/ % 21.31% 12.84% 7/1/14 through present 7.37% 21.14% 12.28% The contribution requirements of the City are established and may be amended by the State. The plan became contributory for employees as of July 1, 2011, with passage of SB2100 during the 2011 legislation with a contribution of 3%. The City s contributions to FRS for the years ended September 30, 2012, 2013 and 2014 were, $62,994, $71,818, and $68,393 respectively, and equal the required contributions for each year. Police and Fire Defined Benefit Pension Plans Plan Description and Provisions Plan Administration The City of Eustis Municipal Police Officers Pension and Retirement System is a defined pension plan administered by a Board of Trustees. The Board consists of 5 Trustees, 2 of whom are appointed by the City Commission, 2 of whom are full-time Police Officers, elected by a majority of the members of the Plan, and fifth member elected by the other 4 and appointed by Commission. The Plan is governed by certain provisions of Chapter 185, Florida Statues, Chapter 112, Florida Statues and the Internal Revenue Code. The City of Eustis Municipal Firefighters Pension and Retirement System is a defined pension plan administered by a Board of Trustees. The Board consists of 5 Trustees, 2 of whom are appointed by the City Commission, 2 of whom are full-time Firefighters, elected by a majority of the members of the Plan, and fifth member elected by the other 4 and appointed by Commission. The Plan is governed by certain provisions of Chapter 175, Florida Statues, Chapter 112, Florida Statues and the Internal Revenue Code. 53

75 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 5 - Pension Funds (Continued) Police and Fire Defined Benefit Pension Plans (Continued) Plan Membership : 10/1/ /1/2014 Police Officers Firefighters Inactive Plan Members or Beneficiaries Currently Receiving Benefits Inactive Plan Member Entitled to but Not Yet Receiving Benefits Active Plan Members Benefits Provided Police Officers and Firefighters Pension Plans Both Plans provide retirement, termination, disability and death benefits. Normal Retirement For both plans, normal retirement can occur at age 55 and the completion of 10 years of credited service or age 52 and 25 years of credited service. The benefit payable at retirement is 3% of the average final compensation time credited service for the Police Officers Plan and 4% for the Firefighters Plan. Early Retirement Both Plans allow early retirement at age 50 and 10 years of credited service. The benefit payable is the same as for Normal retirement, reduced 3% per year. Termination of Employment (both Plans) With 10 years or more of credited service, normal retirement benefits are available at retirement age or a refund of contributions can be obtained. Termination with less than 10 years of service results in a refund of contributions made without interest. Disability benefits The Plans provide for disability benefits accrued as of the date of disability. The benefit is 65% of the average final compensation (AFC) for service related disability and 25% of AFC for Non-service related disability. Pre-retirement Death Benefits Pre-retirement benefits are available to beneficiaries of both police officers and firefighters on the date that normal retirement would have been reached for vested plan members. For non-vested police officers and firefighters, the beneficiary is entitled to a refund of member contributions. Contributions Contributions for the Police Officers and Firefighters Pension Plans include a required contribution from employees of 4% of compensation (as defined). Employer contributions are actuarially determined as the remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, as provided in Chapter 112, Florida Statutes. 54

76 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 5 - Pension Funds (Continued) Police and Fire Defined Benefit Pension Plans (Continued) Annual Pension Cost and Net Pension Obligations The City s annual pension cost and net pension obligation for the Police Officers and Firefighters Plans for the current year are as follows: Police Officers Firefighters Annual Required Contribution (ARC)* $ 786,997 $ 417,797 Interest on Net Pension Obligation (NPO) (42,767) 1,252 Adjustment to ARC 65,171 (1,770) Annual Pension Cost 809, ,279 Actual Contributions (692,199) (409,998) Increase (Decrease) in NPO 117,202 7,281 NPO Beginning of Year (555,416) 15,646 NPO End of of Year $ (438,214) $ 22,927 * Includes expected state contribution. Date based on most current actuarial valuation. (10/1/13 for Police Officers w ith roll forw ard to 9/30/14 and 10/1/14 for Firefighters) The annual required contribution, actuarial cost method and actuarial assumptions, are described in the required supplementary information. The actuarial value of assets was determined using market value for all plans. Police Officers Three Year Trend Information Percent of Annual Pension APC Net Pension Fiscal Year Ended Cost (APC) Contributed Obligation 2014 $ 809, % $ (438,214) , % (555,416) , % (572,760) Firefighters Three Year Trend Information Percent of Annual Pension APC Net Pension Fiscal Year Ended Cost (APC) Contributed Obligation 2014 $ 417, % $ 22, , % 15, , % 16,969 55

77 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 5 - Pension Funds (Continued) Police and Fire Defined Benefit Pension Plans (Continued) Police Officers' Retirement Plan (7) (2) (3) (4) (5) (6) UAAL as (1) Actuarial Entry Age Normal Unfunded Actuarial Funded Annual Percentage Valuation Value of Actuarial Accrued Accrued Liability Ratio Covered of Payroll Date Assets (AVA) Liability (AAL) (UAAL) (3)-(2) (2)/(3) Payroll (4)/(6) 10/1/2013 $ 12,918,572 $ 18,006,362 $ 5,087, % $ 2,110, % Firefighters' Retirement Plan (7) (2) (3) (4) (5) (6) UAAL as (1) Actuarial Entry Age Normal Unfunded Actuarial Funded Annual Percentage Valuation Value of Actuarial Accrued Accrued Liability Ratio Covered of Payroll Date Assets (AVA) Liability (AAL) (UAAL) (3)-(2) (2)/(3) Payroll (4)/(6) 10/1/2014 $ 6,649,553 $ 9,016,907 $ 2,367, % $ 1,205, % The schedules of funding progress, presented as required supplementary information following the note to the financial statements, present multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability. Net Pension Liability of the City The components of the net pension liability of the City at September 30, 2014 were as follows: Police Officers' Plan Total pension liability $ 19,432,574 Plan fiduciary net position (15,321,794) City's net pension liability $ 4,110,780 Plan fiduciary net position as a percentage of the total pension liability 78.85% Firefighters' Plan Total pension liability $ 9,256,999 Plan fiduciary net position (7,008,141) City's net pension liability $ 2,248,858 Plan fiduciary net position as a percentage of the total pension liability 75.71% Costs of administering the police officers and firefighters pension plans are financed through investment earnings. 56

78 TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 5 - Pension Funds (Continued) Police and Fire Defined Benefit Pension Plans (Continued) Significant Actuarial Assumptions The following is a summary of actuarial methods and significant actuarial assumptions used in the latest actuarial valuations: Police Funding mephod EnPry age normal EnPry age normal AmorPizaPion mephod Level dollar, closed Level percenpage of pay, closed Remaining amorpizapion period 23 years 24 years (as of 10/1/2010) AcPuarial assep mephod 5-year smoophed markep 4-year smoophed markep Fire InflaPion 3% per year 4% per year Salary increases 1% for 2014 and 7% PhereafPer FurrenP: 6.5% per year unpil Phe assumed repiremenp age InvesPmenP rape of repurn 7.7% per year 8% per year Payroll increases 7% per year 5% per year ProjecPed benefip is also increased by 5.0% Po accounp for non-regular compensapion. MorPaliPy RP2000 Fombined HealPhy RP2000 Fombined HealPhy ParPicipanP MorPaliPy and 1983 Group AnnuiPy MorPaliPy Pable The actuarial assumptions used in the valuation were based on the results of an actuarial experience study for the police officers pension plan for the period and for the firefighters pension plan Long Term Expected Rate of Return 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 both the police officers and firefighters pension plan s target asset allocation as of September 30, 2014 are summarized in the following table: Expected Expected Target Rate of Target Rate of Allocation Return Allocation Return Asset Class Police Fire Domestic Equity 60.00% 7.50% 45.00% 7.50% International Equity 10.00% 8.50% 15.00% 8.50% Domestic Fixed Income 30.00% 2.50% 40.00% 2.50% 57

79 TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 5 - Pension Funds (Continued) Police and Fire Defined Benefit Pension Plans (Continued) Investment Concentration and Rate of Return Both the Police Officer and Firefighters Pension Plans did not hold investments in any one organization that represents 5% or more of the Plan s fiduciary net position. For the year ended September 30, 2014 the annual money-weighted rate of return on Pension Plan investments, net of pension plan investment expense, was 7.7% for the Police Officers and 9.07% for the firefighters plan. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Discount Rate The discount rate used to measure the total pension liability was for the police officers plan was 7.70% and 8% for the firefighters plan. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan s 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. The following presents the net pension liability of the City: Current Discount 1% Decrease Rate 1% Increase Police Officers' Plan 6.70% 7.70% 8.70% Sponsor's Net Pension Liability $6,965,999 $ 4,110,780 $ 1,675,608 Firefighters' Plan 7.00% 8.00% 9.00% Sponsor's Net Pension Liability $ 3,368,460 $ 2,248,858 $ 1,313,751 Pension Trust Fund Financial Statements The plans do not issue separate financial statements. Financial statements for the Police Officers Retirement System and Firefighters Retirement System at September 30, 2014 and for the year then ended are as follows: 58

80 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 5 - Pension Funds (Concluded) SCHEDULE OF PENSION PLAN NET POSITION AS OF SEPTEMBER 30, 2014 Police Officers Firefighters Total Assets Cash and Cash Equivalents $ 1,783,821 $ 622,270 $ 2,406,091 Contributions Receivable 54,610 26,418 81,028 Interest Receivable 24,020 16,109 40,129 Fixed Income Securities at Fair Value 3,360,414 1,735,778 5,096,192 Equities and Mutual Funds at Fair Value 10,146,618 4,607,566 14,754,184 Total Assets 15,369,483 7,008,141 22,377,624 Liabilities Accounts Payable 47,689-47,689 Total Liabilities 47,689-47,689 Net Position Restricted for Employees' Pension Benefits and Other Purposes $ 15,321,794 $ 7,008,141 $ 22,329,935 SCHEDULE OF CHANGE IN PENSION PLAN NET POSITION AS OF SEPTEMBER 30, 2014 Contributions Plan Member Contributions $ 82,768 $ 46,422 $ 129,190 State Contributions 112,409 90, ,099 City Contributions 579, , ,088 Total Contributions 774, ,410 1,231,377 Income on Investments Net Appreciation in Fair Value of Investments 1,209, ,646 1,696,741 Interest Income 124,255 43, ,733 Dividend Income 226, , ,078 Total Income on Investments 1,560, ,206 2,196,552 Additions (Reductions) Less: Investment Management Fees (107,528) (58,131) (165,659) Net Investment Income 1,452, ,075 2,030,893 Total Additions 2,227,785 1,034,485 3,262,270 Deductions Pension Payments (501,247) (417,602) (918,849) Administration (32,231) (13,700) (45,931) Total Deductions (533,478) (431,302) (964,780) Change in Net Assets 1,694, ,183 2,297,490 Net Position, Beginning of Year, Restated 13,627,487 6,404,958 20,032,445 Net Position, End of Year $ 15,321,794 $ 7,008,141 $ 22,329,935 59

81 Note 6 - NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Postretirement Benefits The Other Postemployment Benefit Plan is a single-employer benefit plan administered by the City. Pursuant to the provisions of Section , Florida Statutes, former employees who retire from the City are eligible to participate in the City s health plan for medical and prescription drug coverage. The City subsidizes the premium rates paid by retirees by allowing them to participate in the plan at blended group (implicitly subsidized) premium rates for both active and retired employees. These rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the plan on average than those of active employees. The Other Postemployment Benefit Plan does not issue a stand-alone report and is not included in the report of another entity. Funding Policy. For the Other Postemployment Benefits Plan, contributions requirements of the City are established and may be amended through action from the City Commissioners. Currently the City s OPEB Benefits are unfunded. The required contributions are based on pay-as-you-go financing requirements. There is no separate Trust Fund or equivalent arrangement into which the City would make contributions to advance-fund the obligation, as it does for its pension plans. Therefore, ultimate subsidies which are provided over time are financed directly by general assets of the City, which are invested in very short-term fixed income instruments according to its current investment policy. The interest rate used to calculate the present values and costs of OPEB must be the long-range expected return on such short-term fixed income instruments. The City selected an interest discount rate of 4% for this purpose. The net amount of retiree contributions totaled $179,459. Annual OPEB Cost and Net OPEB Obligation. The City s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The Unfunded Actuarial Accrued Liability represents an actuarial measurement of the obligation that has accrued so far based on the promise that has been made to current retirees and to current employees. Since the City s OPEB is currently unfunded, the offset to that expense comes from actual subsidies paid on behalf of the current retirees and their dependents for the current year. This offset is called the Employer Contribution and equals the total age-adjusted costs paid by the City for coverage for the retirees and their dependents for the year (net of the retiree s own payments for the year). The following table shows the components of the City s net OPEB obligation to the Other Postemployment Benefit Plan: Annual Required Contribution $ 322,869 Interest on Net OPEB Obligation 27,453 Adjustment to Annual Required Contribution (39,690) Annual OPEB Cost (Expense) 310,632 Employer Assumed Contributions Made (113,176) Increase (Decrease) in Net OPEB Obligation 197,456 Net OPEB Obligation at Beginning of Year 686,321 Net OPEB Obligation at End of Year $ 883,777 60

82 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 6 - Postretirement Benefits (Continued) Funded Status and Funding Progress. As of the most recent actuarial valuation date there was no funding for this liability. The actuarial accrued liability for benefits was $ 2,800,856, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $ 2,800,856 as of the valuation date of for the period ending The covered payroll (annual payroll of active employees covered by the plan) was $ 9,273,777 and the ratio of the UAAL to the covered payroll was 30.20%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, termination, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. In any long-term Actuarial Valuation, certain demographic, economic and behavioral assumptions are made concerning the population, the investment discount rates, inflation rates, and the benefits provided. These Actuarial Assumptions form the basis for the actuarial model which is used to project the future population, the future benefits provided and the contributions collected. Then the investment discount rate assumption is used to discount those projected net OPEB benefits to a present value. This and other related present values are used to calculate the annual OPEB cost. The actuarial assumptions also include an annual healthcare cost trend rate ranging from 7.22 to 5.0% over a period of ten years. The remaining amortization period at September 30, 2013, was averaged at 30 years. The results presented as of the Actuarial Valuation date have been derived using the Projected Unit Credit Actuarial Cost Method with an amortization of the Unfunded Actuarial Accrued Liability as a level percent of projected payroll over an open period of thirty years from This is the most common such method used for government Pension Valuations (and likely so for OPEB valuations) and spreads the cost evenly as a percent of pay throughout the collective careers of those in the covered workforce. Projections of benefits for financial reporting purposes are based on the 61

83 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 6 - Postretirement Benefits (Concluded) substantive plan (the plan as understood by the employees and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit cost between the employer and the plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. Listings of actuarial assumptions are as follows: Discount Rate and general inflation rate 4.00% per year based on general assets. Mortality Table RP 2000 mortality table generationally with scale AA. Disability Table General Employees starting at age 20 for male and female with 0.00% to a high of 60 years with 0.687% for males and 0.599% for females. Police and Fire Employees starting at age 20 with 0.037% for males and 0.036% for females to a high of 60 years with 0.628% for males and 0.597% for females. Participation in continued health insurance is estimated at 40% for general employees 35% and police and fire and at age 65 years of age Medicare and some other supplemental insurance will begin with 80% of the participants being non participatory in the City plan. 50% of participants will be married and elect to cover a spouse. Husbands are assumed to be 3 years older than wives. Salary increases are not provided because of no relevance to the health care cost. No investment return is provided since the plan is unfunded. Health care claim and contribution trend rates: Year Medical Dental % 5.60% % 5.50% % 5.40% % 5.30% % 5.20% % 5.10% % 5.00% Note 7 - Risk Management Property, Casualty, Liability and Workers Compensation The City is exposed to a variety of claims and losses including property damage, liability and workers' compensation for which it participates in an insurance pool with other State of Florida cities. Premiums are determined based on each city's loss ratio for the previous year. The pool, although largely self-insured, purchases excess coverage from commercial carriers. 62

84 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 7 - Risk Management (Concluded) During the last five years the experience rate as it relates to the loss fund set up by our insurance provider is as follows: Percentage Use Year Loss Fund Experience of Loss Fund ,482 85, % , , % , , % , , % , , % The City property and auto coverage has a $1,000 deductible. An additional 2% deductible is applied to any named windstorm. Property located within a flood zone must maintain separate coverage. Automatic coverage for increases in property values for the remainder of policy term, up to $5,000,000 in total insurable values at no additional premium. General liability is set at $1,800,000 per member with an aggregate of $5,400,000. Workers compensation group limits are set at $350,000 with retention of $650,000. In addition to all coverage the city has elected to carry excess liability insurance in the amount of $3,000,000. Terrorism is excluded for buildings valued in excess of $50,000,000, which does not affect our city. Health Insurance The City provides life and health insurance benefits to all eligible regular full-time employees. The program also provides limited coverage for dental and prescription drugs. Employees pay only for dependent coverage under the health benefit program. Premiums are deducted from the participating employee's biweekly pay. The insurance plan provides life insurance coverage in the amount of $20,000 for eligible employees and $50,000 for division and department heads with an additional amount of coverage for accidental death and dismemberment. The amount of coverage is reduced to $10,000 for all employees at retirement. Coverage is further reduced to $6,500 upon achieving age 65 and $5,000 at age 70. Accidental death and dismemberment coverage terminates after age 70. The life insurance coverage is funded through the purchase of a group insurance policy by the City. The City's health insurance plan is purchased through the pool as mentioned above. This change to a group insurance pool became effective October 1, Retirees and terminated employees are eligible to participate in the health insurance plan at their own expense. In order to control costs, the City has joined a Preferred Provider Organization (PPO). Employees are encouraged to use participating providers, which are covered 80% under the plan or, they may choose their own provider. Coverage for expenses rendered by nonparticipating providers is limited to 40%, with the employee paying 60% co-pay. 63

85 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 8 - Commitments The following construction projects were not completed at September 30, 2014: Total Cost Incurred Estimated Cost To Date Governmental Activities: Main Finance Software System $ 315,491 $ 230,640 Eustis Mobility Improvements 303, ,286 Fire Substation Construction 405, ,536 Orange Ave Sidewalks 25,685 22,808 Library Office Relocation 54,057 53,215 Palmetto Plaza Improvements 327, ,281 Palmetto Point Improvement 105,400 42,638 Total Governmental Activities $ 1,536,003 $ 1,224,404 Business Type Activities: Lift Station RTU Replacement $ 150,000 $ 94,348 Northwind Dr/Twin Oaks Water Main 92,760 38,878 Water Line 12,000 5,795 Water Line Replacement Hollywood 25,000 5,795 Submersible Pumps 30,000 29,632 Effluent Pump & Motor 26,000 24,780 Eustis Maint Plant Pretreatment Equipment Impro 380,000 27,608 Lift Station Control Panels 40,500 36,412 Phase II Reclaimed Water Feasibility Study 50,000 17,658 East Wastewater Treatment Plant Nitro Engineerin 365,870 62,466 East Wastewater Treatment Plant Building & Elec 388,659 28,628 Nitrification/Dentrification 125,000 54,577 Bates Avenue Nitrogen Reduct Engineering 12,000 9,838 Total Governmental Activities $ 1,697,789 $ 436,415 The commitments above will be funded from a combination of City reserves and collections from water and sewer. Note 9 - Long-term Liabilities Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental Activities: Revenue Bonds and Notes: Multi-Purpose Revenue Bonds $ 1,640,000 $ - $ (290,000) $ 1,350,000 $ 310,000 Multi-Purpose Revenue Bonds ,000 - (175,000) 760, ,000 Other Liabilities: Other Post Employment Benefits 562, , ,321 - Compensated Absences 1,871, ,096 (665,287) 1,393, ,917 Total Governmental Activities $ 5,009,328 $ 342,513 $ (1,130,287) $ 4,221,554 $ 712,917 64

86 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 9 - Long-term Liabilities (Continued) Compensated absences are associated with the fund generating the liability. Employees are paid from the General, Street Improvement and Stormwater Utility Funds. Approximately 87% reside in the General Fund. The Street Improvement and Stormwater Utility Funds are 10% and 3% respectively. Thus, compensated absences and Other Post Employment Benefits will be liquidated by revenues of these three funds, depending on where the applicable employee s personal services costs normally would be expensed. Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Business Type Activities: State Revolving Loan Agreement $ 2,593,002 $ - $ (314,325) $ 2,278,677 $ 323,483 State Revolving Loan Agreement 4,973,341 - (204,447) 4,768, ,577 Other Post Employment Benefits 123,417 42, ,456 - Compensated Absences 338,346 36,123 (77,792) 296,677 $ 47,468 Total Business Type Activities $ 8,028,106 $ 78,162 $ (596,564) $ 7,509,704 $ 581,528 The following is a schedule of bonds and notes outstanding at September : Description of Bonds Purpose of Issue Issued Outstanding Rates Government Activities: Revenue Bonds and Revenue Notes Multi-Purpose Rev. Bond Multi-Purpose $ 6,200,000 $ 1,350,000 Variable Multi-Purpose Rev. Bond Multi-Purpose 2,200, ,000 Variable Total Governmental Activities $ 8,400,000 $ 2,110,000 Business-Type Activities: State Revolving Loan Program Utility Improv. $ 5,852,495 $ 2,278, to 2.91 State Revolving Loan Program Nitrification 5,264,258 4,768,894 Total Business-Type Activities $ 11,116,753 $ 7,047,571 Debt Service to maturity on the City s bonded indebtedness and loan agreement are as follows: Governmental Activities Fiscal Year Principle Interest ,000 36, ,000 24, ,000 12, ,000 3,122 Total $ 2,110,000 $ 76,378 65

87 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 9 - Long-term Liabilities (Continued) Business-Type Activities Fiscal Year Principle Interest , , , , , , , , , , ,827, , ,438, , ,127 44,228 Total $ 7,047,571 $ 1,476,580 Governmental Activity Liabilities A summary of all governmental long-term debt of the City as of September 30, 2013, follows: Multi-purpose Revenue Bonds, Series 1997A The 1997A bonds are secured by the franchise revenues from Progress Energy Corporation, which were $1,243,117 for the year ending September 30, This was split 61% ($758,301) allocation to the 1997A issue and the remaining 39% ($484,316) allocated to the 2004A issue. The bonds were issued in December 1997, and mature in December Principal and interest for the current year was $305,840 which is 40.3% of the current year pledged revenue; and the remaining outstanding principal and interest was $1,333,691, which is the future portion of pledged revenues. The interest rate is variable with payments due monthly and the annual average interest rate was.022 % through September 30, Interest continues to drop and the weekly rate is currently 0.01% as of January 15, Multi-purpose Revenue Bonds, Series 2004A The 2004A bonds are secured by the discretionary sales surtax revenues and the franchise revenues from Progress Energy Corporation, which were $1,449,545 and $484,316, respectively, for the year ending September 30, This issuance is part of the Multipurpose Revenue Bond Program implemented in The bonds were issued in September 2004, and mature in September Principal and interest for the current year was $185,249 which is equal to 38.2% of the current year pledged revenue. The remaining outstanding principal and interest was $ 852,687, which is the future portion of pledged revenues. The interest rate is variable with payments due monthly and the annual interest rate was.022% through September 30, Interest continues to drop and the weekly rate is currently.01% as of January 15,

88 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 9 - Long-term Liabilities (Concluded) Business-type Activity Liabilities The following is a summary of all long-term liabilities of the proprietary funds at September 30, 2014: Florida Department of Environmental Protection State Revolving Loan Agreement The 2000 loan agreement is for the wastewater treatment plant and is secured by gross revenues derived yearly from operation of the water and sewer system after payment of the operation and maintenance expense and the satisfaction of all senior obligations, which equaled $3,568,744 for the year, ended September 30, 2014; providing a debt coverage of The maximum loan amount authorized was $7,974,052, and the final loan amount of $5,852,495 occurred on November 15, The first payment was made on May 15, 2001 with the final payment due on November 15, Principal and interest for the current year was $387,080 which is 11% of the net available revenue pledged. The remaining outstanding future principal and interest due will be $ 2,516,021. Interest rate ranges from 2.65% to 2.91%. Semi-annual payments are $193,540 and began on May 15, : The City was awarded a 2011 pre-construction loan as well as a construction grant. This funding was used to upgrade the wastewater plant to become compliant with Environmental Protection Agency nitrification regulations. The project was begun in September of 2011 and was completed in May The project cost and payments are as follows: Agreement Project Interest Semi-annual Description Number Est. Cost Rate Payment Pre-Constuction ww $ 288, % $ 9,162 Construction ww ,794, % 157,730 $ 5,083,487 $ 166,892 Provisions of the loan mandates that rates of the water and sewer system will be sufficient to provide a cover of 1.15 time the sum of the semiannual payments, the utility will not provide any free service, all connections are mandatory and consistent with applicable laws, the government shall not allow any competing services within the city limits and the government must use its best efforts to collect all rates, fees and other charges. 67

89 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 10 - Interfund Transactions Interfund transfers at September 30, 2014 consist of the following: Transfers In Transfers Out Major Funds: General Fund $ 1,260,626 $ 465,315 Street Improvement 419,433 Sales Tax 214,750 Community Redevelopment 232,865 Stormwater 259,433 Proprietary Funds: Water and Sewer 1,410,000 Non-Major Funds: Law Enforcement Education 7,700 Greenwood Cemetary 626 $ 2,135,374 $ 2,135,374 Interfund transfers are normally recurring and are approved by City Commission during the budget process or by separate resolutions. Transfers from the water and sewer system fund to the general fund are in support of general government operations. Other transfers are for debt service requirements and for City grant matches. Note 11 - Contingent Liabilities Under the terms of federal and state grants and loans, periodic audits are required and certain costs may be questioned as not allowable as expenditures under the terms of the grants, which could lead to reimbursement to the grantor agencies. City management believes disallowances, if any, will not be material. The City is involved with a lawsuit involving land use. In December of 2006 the Commission denied the development of more than 600 acres owned by the plaintiffs. The new Commission which was sworn into office confirmed the denial and shortly thereafter proceeded in the re-writing of the land use regulations for the City. The original suit was filed in October In January 2009, the city received a Bert Harris Private Property Right Notification from the plaintiffs and in July 2012 the plaintiffs filed the Bert Harris Private Action against the City. The City is being represented by attorneys with our insurance carrier. At this time no determination has or can be made as to the outcome of the suit. 68

90 NOTES TO FINANCIAL STATEMENTS CITY OF EUSTIS, FLORIDA (Continued) Note 12 - Pension Restatement The Firefighters Pension Trust Fund beginning net position restricted for pension benefits was restated as a result of implementation of the GASB Statement No. 67 Financial Reporting for Pension Plans. The elements of this restatement are as follows: Ending Net Position as of September 30, 2013 $ 6,423,346 Restatements from full accrual modification (18,388) Beginning Net Position as of October 1, 2013 $ 6,404,958 69

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92 Required Supplementary Information Other Than MD&A Major Governmental Funds Under GASB 34 the focus of the fund financial statements is on major funds. These funds are defined based on a numerical formula and generally represent the government s most important funs. Major funds for the City of Eustis are as follows: General Fund The General Fund will always be the major fund for the City of Eustis. The fund carries out the general operations of the city and accounts for the essential functions of the city. Street Improvement Fund This fund is used to accumulate monies received from motor fuel gas tax sources. These funds are legally restricted to street maintenance programs and the money is expended solely on maintenance of the streets and rightof-ways within the city. Sales Tax Revenue Fund This fund is used to account for the city s share of the voted one-cent infrastructure sales tax, which is restricted to capital projects. Community Redevelopment Fund This fund is used to account for the incremental tax increase within the Downtown and East Town Redevelopment District. The funds are used for the exclusive benefit of revitalization of these areas. Schedule of Contributions From Employer and Others This information is presented for the Fire and Police Pension Funds and was prepared as part of the actuarial valuations as of the dates indicated. Schedule of Liabilities from Other Post Employment Benefits Actuarial valuation of liability using the unit credit cost method Unfunded Actuarial Accrued Liability.

93 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Actual Variance With Original Final Amounts Final Budget Revenues Ad Valorem Taxes $ 5,308,560 $ 5,308,560 $ 5,377,109 $ 68,549 Franchise Fees 1,453,500 1,453,500 1,472,855 19,355 Utility Service Taxes 1,643,000 1,643,000 1,796, ,581 State Revenue Sharing 1,882,132 1,882,132 1,887,576 5,444 Other Intergovernmental Revenues 30,979 30,979 28,871 (2,108) Permits and Fees 321, , , ,465 Fines and Forfeitures 50,100 50,100 46,526 (3,574) Charges for Services 1,161,829 1,161,829 1,110,227 (51,602) Miscellaneous: On-Behalf Payments , ,099 Interest 75,000 75,000 69,774 (5,226) Other Sources 117, , ,211 49,711 Total Revenues 12,043,700 12,043,700 12,739, ,694 Expenditures Current: General Government and Administration: Legislative 50,527 50,527 46,034 4,493 Executive 453, , ,026 51,588 Finance and Administration 1,702,356 1,775,108 1,704,389 70,719 Legal 196, , ,035 32,965 Development Services 393, , , ,552 General Services 1,675,242 1,401,418 1,596,309 (194,891) Total General Government and Administration 4,471,043 4,386,143 4,197, ,426 Public Safety: Law Enforcement 4,727,206 4,895,899 4,631, ,147 Fire Control 2,051,812 2,122,316 2,111,557 10,759 On-Behalf Payments - 203,099 (203,099) Protective Inspections 213, , ,703 6,318 Total Public Safety 6,992,389 7,251,236 7,173,111 78,125 Transportation 143, , ,239 21,833 Culture and Recreation: Library 814, , ,835 60,186 Recreation 877, , ,103 71,622 Total Culture and Recreation 1,692,068 1,736,746 1,604, ,808 Nondepartmental 100,000 42,000-42,000 Capital Outlay 98, ,496 84,980 26,516 (Total Expenditures) (13,498,004) (13,674,693) (13,185,985) 488,708 (Deficiency) Excess of Revenues Over Expenditures (1,454,304) (1,630,993) (446,591) 1,184,402 Other Financing Sources (Uses) Operating Transfers from Other Funds 1,286,000 1,286,000 1,260,626 25,204 Operating Transfers to Other Funds (382,700) (382,700) (465,315) (82,615) Total Other Financing Sources (Uses) 903, , ,311 (57,411) Net Change in Fund Balances (551,004) (727,693) 348,720 1,126,991 Fund Balance, Beginning of Year 6,580,341 6,434,767 6,769, ,625 Fund Balance, End of Year $ 6,029,337 $ 5,707,074 $ 7,118,112 $ 1,461,616 71

94 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL STREET IMPROVEMENT FUND CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Revenues Budgeted Amounts Actual Variance With Original Final Amounts Final Budget Intergovernmental Revenues: Local Option Gas Tax $ 553,908 $ 553,908 $ 592,590 $ 38,682 Eight-cent Gas Tax 128, , , Municipal Fuel Tax Refund 12,000 12,000 19,245 7,245 Additional One-cent 135, , ,466 4,466 Total Intergovernmental Revenues 829, , ,148 50,740 Miscellaneous Revenues: Interest 3,000 3, (2,021) Restricted Contributions - - 3,165 3,165 Reimburse for Services 225, , ,123 (53,877) Other ,195 25,695 Total Miscellaneous Revenues 228, , ,462 (27,038) Total Revenues 1,057,908 1,057,908 1,081,610 23,702 Expenditures Current: Transportation: Personnel 988, , ,858 93,928 Operating 795, , , ,714 Capital Outlay 30,826 30,826 24,977 5,849 (Total Expenditures) (1,814,817) (1,814,817) (1,599,326) 215,491 (Deficiency) Excess of Revenues Over Expenditures (756,909) (756,909) (517,716) 239,193 Other Financing Sources (Uses) Operating Transfers from Other Funds 419, , ,433 - Total Other Financing Sources (Uses) 419, , ,433 - Net Change in Fund Balances (337,476) (337,476) (98,283) 239,193 Fund Balance, Beginning of Year 606, , ,989 - Fund Balance, End of Year $ 268,575 $ 251,497 $ 567,706 $ 239,193 72

95 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL SALES TAX REVENUE FUND CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Actual Variance With Original Final Amounts Final Budget Revenues Intergovernmental Revenues: Discretionary Additional Sales Tax $ 1,435,804 $ 1,435,804 $ 1,541,790 $ 105,986 State Grant 278, ,085 22,807 (255,278) Total Intergovernmental Revenues 1,713,889 1,713,889 1,564,597 (149,292) Miscellaneous Revenues: Interest 10,000 10,000 2,147 (7,853) Total Miscellaneous Revenues 10,000 10,000 2,147 (7,853) Total Revenues 1,723,889 1,723,889 1,566,744 (157,145) Expenditures Current: General Government: Capital Outlay 295, , , ,363 Debt Service: Principal Payments 465, , ,000 - Interest and Fees 77,750 77,750 23,990 53,760 Total General Government 837,750 1,458, , ,123 Public Safety: Capital Outlay 614, , , ,629 Total Public Safety 614, , , ,629 Transportation: Operating Capital Outlay 880, , , ,762 Total Transportation 880, , , ,762 Culture and Recreation: Capital Outlay 315, , , ,441 Total Culture and Recreation 315, , , ,441 (Total Expenditures) 2,649,198 3,864,172 2,557,217 1,306,955 (Deficiency) Excess of Revenues Over Expenditures 4,373,087 (2,140,283) (990,473) 1,149,810 Other Financing Sources (Uses) Operating Transfers from Other Funds 214, , ,750 - Total Other Financing Sources (Uses) 214, , ,750 - Net Change in Fund Balances 4,373,087 (1,925,533) (775,723) 1,149,810 Fund Balances, Beginning of Year 6,543, ,662 2,376,456 (1,665,794) Fund Balances, End of Year $ 10,916,763 $ (1,214,871) $ 1,600,733 $ (515,984) 73

96 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL BUDGET AND ACTUAL COMMUNITY REDEVELOPMENT FUND CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Variance With Original Final Actual Final Budget Revenues Intergovernmental: Incremental Tax Transfers $ 346,600 $ 346,600 $ 162,913 $ (183,687) Miscellaneous: Grants 385, ,000 - (385,000) Interest 3,500 3,500 2,269 (1,231) Total Revenues 735, , ,182 (569,918) Expenditures Current: General Government 68, ,980 26, ,250 Transportation - 25,000 2,324 22,676 Capital Outlay 813,963 1,555, ,975 1,342,464 (Total Expenditures) (882,083) (1,775,419) (242,029) 1,533,390 (Deficiency) Excess of Revenues Over Expenditures (146,983) (1,040,319) (76,847) 963,472 Other Financing Sources (Uses) Operating Transfer to Other Funds Operating Transfers from Other Funds - 89, , ,349 Total Other Financing Sources (Uses) - 89, , ,349 Excess of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (146,983) (950,803) 156,018 1,106,821 Fund Balance, Beginning of Year 1,016,014 82, , ,252 Fund Balance, End of Year $ 869,031 $ (868,641) $ 893,432 $ 1,762,073 74

97 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL BUDGET AND ACTUAL STORMWATER UTILITY FUND CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Budgeted Amounts Variance With Original Final Actual Final Budget Revenues Charges for Services: Stormwater Utility Fees $ 750,000 $ 750,000 $ 711,916 $ (38,084) Intergovernmental Grants 36,525 36,525 - (36,525) Total 786, , ,916 (74,609) Miscellaneous: Interest 3,500 3,500 1,487 (2,013) Total Miscellaneous 3,500 3,500 1,487 (2,013) Total Revenues 790, , ,403 (76,622) Expenditures Current: Physical Environment: Personnel 172, , ,751 43,575 Operating 206, , ,777 64,444 Capital Outlay 306, , ,000 76,023 (Total Expenditures) (685,643) (605,570) (421,528) 184,042 (Deficiency) Excess of Revenues Over Expenditures 104, , , ,420 Other Financing Sources (Uses) Operating Transfers to Other Funds (259,433) (259,433) (259,433) - Total Other Financing Sources (Uses) (259,433) (259,433) (259,433) - (Deficiency) of Revenues and Other Financing Sources (Under) Expenditures and Other Financing Uses (155,051) (74,978) 32, ,420 Fund Balance, Beginning of Year 170,151 63, , ,811 Fund Balance, End of Year $ 15,100 $ (11,918) $ 733,313 $ 562,206 75

98 CITY OF EUSTIS, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION HISTORICAL TREND INFORMATION FOR PENSION TRUST FUNDS Schedule of Funding Progress - Police Officers' (b) (b) - (a) ((b) - (a))/(c ) (a) Actuarial Unfunded UAAL as a Actuarial Actuarial Accrued AAL (a) / (b) (c ) Percentage of Valuation Value of Liability (UAAL) Funded Covered Covered Date Assets (AAL) (UAAL) Ratio Payroll Payroll 2013 $ 12,918,572 $ 18,006,362 $ 5,087, % $ 2,110, % ,891,779 15,081,456 4,189, % 2,189, % ,628,484 14,659,344 4,030, % 2,232, % ,012,620 13,759,212 3,746, % 2,175, % ,445,235 13,308,396 3,863, % 2,257, % ,700,546 12,226,809 3,526, % 2,215, % ,647,616 11,078,285 3,430, % 1,972, % ,811,480 9,890,772 3,079, % 1,776, % ,731,253 5,436,025 (295,228) 105.4% 1,725,354 (17.11%) ,216,061 3,400,606 (1,815,455) 153.4% 1,329,784 (136.52%) Schedule of Funding Progress - Firefighters' (b) (b) - (a) ((b) - (a))/(c ) (a) Actuarial Unfunded UAAL as a Actuarial Actuarial Accrued AAL (a) / (b) (c ) Percentage of Valuation Value of Liability (UAAL) Funded Covered Covered Date Assets (AAL) (UAAL) Ratio Payroll Payroll 2014 $ 6,649,553 $ 9,016,907 $ 2,367, % $ 1,160, % ,442,836 8,023,177 2,580, % 961, % ,758,511 7,850,544 2,092, % 1,003, % ,849,412 7,431,868 1,582, % 961, % ,915,875 6,917,727 1,001, % 1,000, % ,936,754 6,286, , % 1,049, % ,432,258 5,844, , % 908, % ,012,386 5,813, , % 836, % ,807,239 5,192, , % 705, % ,680,044 4,680, % 706, % 76

99 CITY OF EUSTIS, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION HISTORICAL TREND INFORMATION FOR PENSION TRUST FUNDS (Concluded) Schedules of Contributions from Employer and Others^ Police Plan: Annual Year Ended Required Actual Percentage 9/30 Contribution Contribution Contributed , , % , , % , , % , , % , , % , , % , , % , , % , , % Firefighters Plan: Annual Actual Actual Year Ended Required Contribution Contribution Percentage 9/30 Contribution (City) (State) Contributed 2014 $ 417,797 $ 319,298 $ 90,690 * 98.1% , ,394 85,151 * 76.70% , ,242 85,818 * 97.8% ,210 90, , % , ,511 99, % , ,454 76, % , ,510 65, % ,507 98,110 60, % ,272 23,165 53, % * Shortfall made up with prior Funding Credit Balance ^ Information is based on the most recent actuarial valuation dated 10/1/13 for Police Officers' Plan (as rolled forward to 9/30/14) and 10/1/14 actuarial valuation for the Firefighters' Plan. 77

100 CITY OF EUSTIS, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years Police Employees Fire Employees Total pension liability Service cost $ 520,211 $ 224,459 Interest 1,407, ,345 Change in Excess State Money - - Share Plan Allocation - - Changes of Benefit Terms - - Difference Between Expected and Actual - - Experience - - Changes of Assumptions - - Benefit Payments, Including Refunds of Employee Contributions (501,247) (417,602) Net Change in Total Pension Liability 1,426, ,202 Total Pension Liability - Beginning 18,006,362 8,749,797 Total Pension Liability - Ending (a) $ 19,432,574 $ 9,256,999 Plan Fiduciary Net Position Contribution - Employer $ 579,790 $ 319,298 Contribution - State 112,409 90,690 Contribution Employee 82,768 46,422 Net Investment Income 1,452, ,075 Benefit Payments, Including Refunds of Employee Contributions (501,247) (417,602) Administrative Expense (32,231) (13,700) Net Change in Plan Fiduciary Net Position 1,694, ,183 Plan Fiduciary Net Position - Beginning, Restated 13,627,487 6,404,958 Plan Fiduciary net Position - Ending (b) $ 15,321,794 $ 7,008,141 Net Pension Liability - Ending (a) - (b) $ 4,110,780 $ 2,248,858 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 78.85% 75.71% Covered Employee Payroll $ 2,069,200 $ 1,160,547 Net Pension Liability as a Percentage of covered Employee Payroll % % This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, information for those years for which information is available is presented. 78

101 CITY OF EUSTIS, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION Schedule of Contributions Police Officers' Retirement Trust Fund 9/30/2014 Actuarially determined contribution $ 681,594 Contributions in relation to the actuarially determined contributions 692,199 Contribution deficiency (excess) $ (10,605) Covered employee payroll $ 2,069,200 Contributions as a percentage of covered employee payroll 33.45% Notes to Schedule Valuation date: 10/1/2013 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Funding method Amortization method Remaining amortization period Actuarial asset method Inflation Salary increases Investment rate of return Retirement age Mortality Entry age normal actuarial cost method Level dollar, closed 23 years 5-year smoothed market 3% per year 1% for fiscal year ended September 30, 2014 and 7% thereafter 7.7% per year Experience -based tables of rates that are specific to the type of eligibilty condition. 60% recognition of the RP2000 Combined Healthy Participant Mortalit Table for males and females with mortality improvement projected using Scale AA after 2000 and 40% recognition of the 1983 Group Annuity Mortality Table for males and females with no future mortality improvements. 79

102 CITY OF EUSTIS, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION Schedule of Investment Returns Last 10 Fiscal Years Police Officers' Retirement Trust Fund 9/30/2014 Annual money-weignted rate of return net of investment expense 7.70% Firefighters' Retirement Trust Fund 9/30/2014 Annual money-weignted rate of return net of investment expense 9.07% This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, information for those years for which information is available is presented. 80

103 CITY OF EUSTIS, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION Schedule of Contributions Firefighters' Retirement Trust Fund 9/30/2014 Actuarially determined contribution $ 417,796 Contributions in relation to the actuarially determined contributions 417,796 Contribution deficiency (excess) $ - Covered employee payroll $ 1,160,547 Contributions as a percentage of covered employee payroll 36.00% Notes to Schedule Valuation date: 10/1/2010 Actuarially determined contribution rates are calculated as of October 1, four years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Funding method Entry age normal actuarial cost method Amortization method Level percentage of pay, closed Remaining amortization period 24 years (as of 10/1/2010) Actuarial asset method 4-year smoothed market Inflation 4% per year Salary increases Current: 6.5% per year until the assumed retirement age Projected benefit is also increased by 5.0% to account for non-regular compensation. Prior: 6% per year until the assumed retirement age. Projected benefit is also increased by 6.0% to account for non-regular compensation. Investment rate of return 8% per year, compounded annually, net of investment related expenses Payroll increases 5% per year Retirement age Earlier of 1.) Age 55 and the completion of 10 years of service, or 2) Age 52 and the completion of 25 years of service. Members who are eligible to retire on the valuation date are assumed to work one additional year. Early retirement Commencing at eligibility for Early Retirement, members are assumed to retire with an immediate benefit at the rate of 5% per year. Termination rates See table below Disability rates See table below Mortality Current: PR2000 Combined Healthy Table - Sex Distinct. Disabled set forward 5 years. Prior: 1983 GAM Table - Sex Distinct. Disabled set forward 5 year. % becoming Termination and disability rate table: % terminating disabled during Age during the year the year % 0.14% % 0.18% % 0.30% % 1.00% 81

104 CITY OF EUSTIS, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION HISTORICAL TREND INFORMATION FOR OPEB The Annual OPEB Cost, the precentage of Annual OPEB Cost conributed to the plan, and the Net OPEB Obligation for 2014, and the two preceding years are as follows: Annual OPEB Cost Retiree Medical Plan Year Ended Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation 9/30/12 $201, % $478,541 9/30/13 $305, % $686,321 9/30/14 $310, % $883,777 Schdule of Funding Progres Retiree Medical Plan UAAL as a Actuarial Valuation Date Actuarial Value of Assets Actuarial Accrued Liability Unfunded AAL Funded Ration Covered Payroll Percentage of Covered Payroll (a) (b) (b-a) (a/b) ( c ) (b-a)/c October 1, 2008 $0 $ 1,794,902 $ 1,794,902 0% N/A N/A October 1, 2009 $0 $ 1,794,902 $ 1,794,902 0% $ 8,957, % October 1, 2010 $0 $ 1,681,023 $ 1,681,023 0% $ 8,863, % October 1, 2011 $0 $ 1,616,491 $ 1,616,491 0% $ 8,919, % October 1, 2012 $0 $ 2,640,676 $ 2,640,676 0% $ 9,054, % October 1, 2013 $0 $ 2,800,856 $ 2,800,856 0% $ 9,273, % 82

105 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION CITY OF EUSTIS, FLORIDA Note 1 - The City of Eustis, Florida (the City) follows these procedures in establishing the budgetary data reflected in the financial statements: Prior to August 1, the City Manager submits to the City Commission the proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted to obtain taxpayer comments. Prior to October 1, the budget is legally enacted through passage of a resolution. The adoption process meets the requirements as set forth in Florida Statutes and Florida Statutes Chapter 200, which deals with the millage and budget adoption process. Budgets are adopted for all funds except the Police pension fund (a pension trust fund). Budgets for governmental fund types are prepared on a basis consistent with generally accepted accounting principles (GAAP) with the exception of the general fund. The general fund does not budget for the effect of tipping fee collections and expenditures. Budgets for the enterprise funds are prepared on a non-gaap basis as depreciation is not budgeted while capital additions and principal payments are. Appropriations lapse at fiscal year end. The annual operating budget serves as legal authorization for expenditures and the proposed means of financing them. The legal level of budgetary control is the department level. Budgetary information is integrated into the accounting system and appropriations are controlled at the object level within each department for management control purposes. The City Manager is authorized to transfer budgeted amounts within departments within any fund. Revisions that increase total expenditures of any department or any fund require City Commission approval. Budgeted amounts of governmental fund types presented in the accompanying financial statements have been adjusted for Commission-approved revisions. 83

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107 Other Supplemental Information Nonmajor Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Law Enforcement Trust Fund - This fund is used to account for funds received as a result of drug forfeitures, which are restricted to drug enforcement training, programs for police officers. Law Enforcement Education Fund - This fund is used to account for fines whose use is restricted to police education training programs. Community Development Fund - This fund is used to account for ongoing activities related to rehabilitation projects financed by previous Community Development Block Grants. Community Development Block Grant Fund - This fund is used to account for funds received under the Small Cities Community Development Block Grant Program funded by the Department of Housing and Urban Development. Library Contribution Fund This fund is used to account for funds which are either raised or donated to the Eustis Memorial Library. Impact Fee Fund - This fund is used to accumulate revenues derived from newly constructed facilities. The fees will be used to help defray the costs of capital expenditures necessitated by growth. Specific impact fees are collected for Law Enforcement, Fire Prevention, Parks & Recreation, and Library. Stormwater Utility Fund - This fund is used to accumulate revenues which will fund the programs necessary to address problems associated with Stormwater runoff. Cemetery Trust fund This fund is used to accumulate revenues for the perpetual care of the Greenwood Cemetery. Twenty percent of the funds from the sale go to this fund. Interest earned is used for operations and the principal may be used for capital purchases.

108 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS CITY OF EUSTIS, FLORIDA SEPTEMBER 30, 2014 Law Law Enforcement Economic Library Enforcement Education Development Contribution Trust Fund Fund Fund Fund Assets Cash $ 35,630 $ 6,853 $ 212,089 $ 102,693 Receivables, Net: Accounts - - 3,801 - Interest Total Assets 35,633 6, , ,702 Liabilities and Fund Balances Liabilities Accounts Payable and Accrued Liabilities ,300 1,446 Total Liabilities ,300 1,446 Fund Balances Nonspendable: Library Trust Donations ,195 Restricted for: Public Safety Impact Fees Culture and Recreation Impact Fees Ordinance - Community Development ,608 - Specific Contributions ,177 Police Fines and Forfeitures 35,633 6, Cemetery - Chapter 22 of Code Committed to: Library ,884 Total Fund Balance 35,633 6, , ,256 Total Liabilities and Fund Balances $ 35,633 $ 6,854 $ 215,908 $ 102,702 86

109 Impact Greenwood Fee Cemetery Fund Fund Total $ 435,687 $ 253,693 $ 1,046, , , ,717 1,050,542 50,594-64,340 50,594-64, , , , , , , ,177-42, , , , , , ,202 $ 435,728 $ 253,717 $ 1,050,542 87

110 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS CITY OF EUSTIS, FLORIDA FOR THE YEAR ENDED SEPTEMBER 30, 2014 Law Law Enforcement Economic Library Enforcement Education Development Contribution Trust Fund Fund Fund Fund Revenues Fines and Forfeitures $ 9,718 $ 2,360 $ - $ 8,763 Miscellaneous ,189 9,185 Total Revenues 9,807 2,384 40,189 17,948 Expenditures Current: General Government and Administration ,800 - Public Safety 3,395 15, Culture and Recreation ,726 Capital Outlay 3, (Total Expenditures) (6,897) (15,589) (15,800) (24,726) Excess (Deficiency) of Revenues Over (Under) Expenditures 2,910 (13,205) 24,389 (6,778) Other Financing Sources (Uses) Operating Transfers from Other Funds - 7, Operating Transfers to Other Funds Total Other Financing Sources (Uses) - 7, Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses 2,910 (5,505) 24,389 (6,778) Fund Balances, Beginning of Year 32,723 12, , ,034 Fund Balances, End of Year $ 35,633 $ 6,854 $ 203,608 $ 101,256 88

111 Impact Greenwood Fee Cemetery Fund Fund Total $ - $ - $ 20, ,157 5, , ,157 5, , ,500 1,000-19,984 15,867-40, , ,756 (333,121) (700) (396,833) (210,964) 4,676 (198,972) - - 7,700 - (626) (626) - (626) 7,074 (210,964) 4,050 (191,898) 596, ,667 1,178,100 $ 385,134 $ 253,717 $ 986,202 89

112 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2014 LAW ENFORCEMENT TRUST FUND CITY OF EUSTIS, FLORIDA Final Variance With Actual Budget Final Budget Revenues Fines and Forfeitures $ 9,718 $ 7,400 $ 2,318 Miscellaneous: Interest Total Revenues 9,807 7,400 2,407 Expenditures Current: Public Safety: Administration 3,395 8,800 5,405 Capital Outlay 3,502 3,502 - (Total Expenditures) (6,897) (12,302) 5,405 (Deficiency) Excess of Revenues Over Expenditures 2,910 (4,902) 7,812 Net Change in Fund Balance 2,910 (4,902) 7,812 Fund Balances, Beginning of Year 32,723 30,579 2,144 Fund Balances, End of Year $ 35,633 $ 25,677 $ 9,956 90

113 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2014 LAW ENFORCEMENT EDUCATION FUND CITY OF EUSTIS, FLORIDA Final Variance With Actual Budget Final Budget Revenues Fines and Forfeitures $ 2,360 $ 3,450 $ (1,090) Total Fines and Forfeitures 2,360 3,450 (1,090) Miscellaneous: Interest (101) Total Miscellaneous (101) Total Revenues 2,384 3,575 (1,191) Expenditures Current: Public Safety: Administration Police Training 11,215 11,000 (215) Capital Outlay 4,124 16,549 12,425 (Total Expenditures) (15,589) (27,799) 12,210 (Deficiency) Excess of Revenues (Under) Expenditures (13,205) (24,224) 11,019 Other Financing Sources (Uses) Operating Transfers from Other Funds 7,700 7,700 - Net Change in Fund Balance (5,505) (16,524) 11,019 Fund Balance, Beginning of Year 12,359-12,359 Fund Balance, End of year $ 6,854 $ (16,524) $ 23,378 91

114 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2014 ECONOMIC DEVELOPMENT FUND CITY OF EUSTIS, FLORIDA Final Variance With Actual Budget Final Budget Revenues Miscellaneous: Program Income $ 39,754 $ 40,000 $ (246) Interest (165) Total Revenues 40,189 40,600 (411) Expenditures Current: General Government: Administration 15,800 94,863 79,063 Capital Outlay (Total Expenditures) (15,800) (94,863) 79,063 (Deficiency) Excess of Revenues Over Expenditures 24,389 (54,263) 78,652 Net Change in Fund Balance 24,389 (54,263) 78,652 Fund Balance, Beginning of Year 179,219 89,565 89,654 Fund Balance, End of Year $ 203,608 $ 35,302 $ 168,306 92

115 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2014 LIBRARY CONTRIBUTION FUND CITY OF EUSTIS, FLORIDA Final Variance With Actual Budget Final Budget Revenues Fines and Forfeitures: Library Fines $ 8,763 $ 8,000 $ 763 Miscellaneous: Interest Book Sales 3,078 2, Donations Other 5, ,376 Total Miscellaneous Revenues 9,185 3,975 5,210 Total Revenues 17,948 11,975 5,973 Expenditures Current: Culture and Recreation: Administration 24,726 29,375 4,649 (Total Expenditures) (24,726) (29,375) 4,649 (Deficiency) Excess of Revenues Over Expenditures (6,778) (17,400) 10,622 Fund Balance, Beginning of Year 108, ,297 5,737 Fund Balance, End of Year $ 101,256 $ 84,897 $ 16,359 93

116 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2014 IMPACT FEE FUND CITY OF EUSTIS, FLORIDA Final Variance With Actual Budget Final Budget Revenues Miscellaneous: Permits and Fees $ 120,869 $ 45,000 $ (75,869) Interest 1,288 1, Total Revenues 122,157 46,850 (75,307) Expenditures Current: Culture and Recreation 15,867 16, Public Safety 1,000 1,000 - Capital Outlay 316, ,861 37,607 (Total Expenditures) (333,121) (370,861) (37,740) (Deficiency) Excess of Revenues Over Expenditures (210,964) (324,011) (113,047) Fund Balance, Beginning of Year 596, , ,071 Fund Balance, End of Year $ 385,134 $ 117,016 $ 42,024 94

117 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2014 GREENWOOD CEMETERY FUND CITY OF EUSTIS, FLORIDA Final Variance With Actual Budget Final Budget Revenues Miscellaneous: Interest $ 605 $ 600 $ 5 Lot Sales 4,771 4, Donations - 1,600 (1,600) Total Revenues 5,376 6,200 (824) Expenditures Current: General Government: Administration (Total Expenditures) (700) (700) - (Deficiency) Excess of Revenues Over Expenditures 4,676 5,500 (824) Other Financing Sources (Uses) Operating Transfers to Other Funds (626) (600) (26) Total Other Financing (Uses) (626) (600) (26) (Deficiency) of Revenues and Other Financing Sources (Under) Expenditures and Other Financing Uses 4,050 4,900 (850) Fund Balance, Beginning of Year 249, ,117 (1,450) Fund Balance, End of Year $ 253,717 $ 256,017 $ (2,300) 95

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119 STATISTICAL SECTION This part of the City of Eustis Comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statement, note disclosures, and required supplementary information says about the government s overall financial health. Statistical tables differ from financial statements because they cover more than two fiscal years and may present non-accounting data. These tables reflect social and economic data, financial trends, and the fiscal capacity of the City. Information contained within this section includes: Financial Trend Data Schedule 1, 2, 3, 4, 4-1 Provides information on a government-wide basis Schedules 1 and 2 are on GASB 34 accrual basis. Data is a 7 year trend. Schedules 3, 4, and 4-1 provided on a modified accrual basis. Data is a 10 year trend. Revenue Capacity Data Schedule 5, 6, 7 and 8 Depicts the primary governments ability to raise revenues via a tax levy. A history of assessed value, taxes levied by taxing authority, collections and principal tax payers within the municipality. Debt Capacity Data Schedule 9, 10, 11 Provides a history of the various debt obligations owed by the city over the last ten years. Debt associated with the city over the last ten years include, a 1997A, 2004 water and sewer Sales Sur-Tax, a utility revenue bond and state revolving fund loan. The pledging of the various revenues is provided for each debt. Demographic and Economic Information Schedule 12, 16, 17 and 18 This information is provided to assist the reader in understanding the makeup of The City of Eustis. Information regarding schools, population, age, consumer price index, income, cost, unemployment is contained within the reports described. Additionally, comparison of the immediate adjacent cities, millage comparison of all cities in the county, as well as the top ten employers within the city, is presented. Operating Information Schedule 13, 14, 15, 15-1 These schedules present information regarding the city s ability to service the citizens, as well as general information. Utility rates are presented as well as the volume used by category of customer. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

120 Schedule 1 City of Eustis Net Position By Component Last Ten Years Fiscal Year Ending 9/30/2005 9/30/2006 9/30/2007 9/30/2008 9/30/2009 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 Governmental Activities Net Investment in Capital Assets $ 42,752,908 $ 44,207,789 $ 48,771,422 $ 48,764,688 $ 49,625,414 $ 52,363,108 $ 55,235,283 $ 59,461,444 $ 60,130,046 $ 60,587,680 Restricted 10,613,133 12,026,828 15,355,730 15,579,208 8,968,246 7,139,672 5,564,314 5,430,951 4,501,756 3,848,338 Unrestricted 6,076,464 7,186,043 4,611,117 3,605,640 8,759,805 8,055,273 9,039,378 7,138,449 6,068,594 6,354,893 Total governmental activities net assets $ 59,442,505 $ 63,420,660 $ 68,738,269 $ 67,949,536 $ 67,353,465 $ 67,558,053 $ 69,838,975 $ 72,030,844 $ 70,700,396 $ 70,790,911 Business-type activities Net Investment in Capital Assets $ 28,098,024 $ 32,172,732 $ 35,727,238 $ 37,952,519 $ 37,933,620 $ 37,009,831 $ 35,113,212 $ 33,870,957 $ 33,479,575 $ 32,764,485 Restricted 5,501,191 4,607,236 4,558,659 4,489,528 4,218,805 3,981,309 4,346,977 4,299,062 4,272,913 4,951,489 Unrestricted 2,333,705 5,098,666 7,670,480 5,436,201 4,884,912 5,140,150 6,189,179 7,054,263 7,084,182 6,838,507 Total business-type activities net assets $ 35,932,920 $ 41,878,634 $ 47,956,377 $ 47,878,248 $ 47,037,337 $ 46,131,290 $ 45,649,368 $ 45,224,282 $ 44,836,670 $ 44,554,481 Primary government Net Investment in Capital Assets $ 70,850,932 $ 76,380,521 $ 84,498,660 $ 86,717,207 $ 87,559,034 $ 89,372,939 $ 90,348,495 $ 93,332,401 $ 93,609,621 $ 93,352,165 Restricted 16,114,324 16,634,064 19,914,389 20,068,736 13,187,051 11,120,981 9,911,291 9,730,013 8,774,669 8,799,827 Unrestricted 8,410,169 12,284,709 12,281,597 9,041,841 13,644,717 13,195,423 15,228,557 14,192,712 13,152,776 13,193,400 Total Primary government $ 95,375,425 $ 105,299,294 $ 116,694,646 $ 115,827,784 $ 114,390,802 $ 113,689,343 $ 115,488,343 $ 117,255,126 $ 115,537,066 $ 115,345,392 97

121 Schedule 2 City of Eustis Changes in Net Position Last Ten Years (Accrual Basis GASB 34 Beginning 9/30/03) Fiscal Year Ending 9/30/05 9/30/06 9/30/07 9/30/08 9/30/09 Expenses Governmental activities: General Government $ 1,629,256 $ 3,450,318 $ 5,071,848 $ 7,017,839 $ 5,825,633 Public Safety 5,361,834 5,917,766 6,820,468 7,021,379 6,622,719 Physical Environment Transportation 2,313,719 2,196,372 2,542,912 2,865,929 2,314,736 Culture & Recreation 2,319,879 2,557,357 2,899,803 2,863,329 2,743,191 Non-Departmental 510, , Debt Service 156, , , , ,242 Total Governmental activities 12,291,458 15,055,472 17,551,317 19,916,630 17,626,521 Business-type activities: Water and Sewer Activities 5,473,573 6,283,212 6,575,615 6,977,002 6,812,008 Total primary government expenses $ 17,765,031 $ 21,338,684 $ 24,126,932 $ 26,893,632 $ 24,438,529 Program Revenues Governmental activities: Charges for services: General government $ 1,421,233 $ 1,576,635 $ 1,392,991 $ 1,151,782 $ 792,823 Public Safety 174, , , , ,896 Physical Environment Transportation 352, , , ,517 1,075,502 Culture & Recreation 176, , , , ,128 Non-Departmental Operating grants and contributions 129, ,049 95, , ,289 Capital grants and contributions 839,418 2,390,955 5,189, , ,297 Total governmental activities program revenues 3,093,027 4,879,843 7,800,494 2,976,191 3,304,935 Business-type activities: Charges for services Water 3,597,936 5,046,634 5,470,906 4,212,036 3,820,691 Wastewater 2,520,512 2,691,100 3,060,441 3,268,298 3,041,770 Non-Departmental 87, Capital grants and contributions 6,922,051 4,824,315 4,327, ,570 82,974 Total business-type activities program revenues 13,127,644 12,562,049 12,858,548 7,731,904 6,945,435 Total primary government program revenues $ 16,220,671 $ 17,441,892 $ 20,659,042 $ 10,708,095 $ 10,250,370 Net (Expenditures)/Revenues Governmental activities $ (9,198,431) $ (10,175,629) $ (9,750,823) $ (16,940,439) $ (14,321,586) Business-type activities 7,654,071 6,278,837 6,282, , ,427 Total primary government net (expenses)/revenue $ (1,544,360) $ (3,896,792) $ (3,467,890) $ (16,185,537) $ (14,188,159) General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes $ 3,709,587 $ 4,413,134 $ 4,834,561 $ 5,168,093 $ 4,928,518 Utility taxes 1,299,367 1,412,149 4,702,951 3,028,873 1,535,963 Franchise fees 1,161,183 1,366,483 1,228,317 1,404,747 1,503,027 State shared revenues 4,580,869 4,691,565 1,643,898 4,237,684 4,069,813 Investment earnings 387, , , , ,960 Miscellaneous income 561, , , , ,238 Transfers in 1,015,049 1,188,978 1,143,876 1,227,086 1,263,760 Total governmental activities 12,715,109 14,153,784 15,068,432 16,151,706 13,729,279 Business-type activities: Investment earnings 251, , , , ,971 Miscellaneous income 98, , , ,451 Transfers (1,015,049) (1,188,978) (1,143,876) (1,227,086) (1,263,760) Total business-type activities (665,045) (333,123) (205,190) (833,031) (974,338) Total primary government $ 12,050,064 $ 13,820,661 $ 14,863,242 $ 15,318,675 $ 12,754,941 Change in Net Assets Governmental Activities $ 3,516,678 $ 3,978,155 $ 5,317,609 $ (788,733) $ (592,307) Business-type activities 6,989,026 5,945,714 6,077,743 (78,129) (840,911) Total primary government $ 10,505,704 $ 9,923,869 $ 11,395,352 $ (866,862) $ (1,433,218) 98

122 Fiscal Year Ending 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 $ 4,952,041 $ 4,477,958 $ 4,603,864 $ 4,477,958 $ 5,072,134 7,478,860 6,957,146 2,770,677 8,026,248 7,626, ,630 2,551,531 2,661,709 2,950,086 3,079,555 2,867,866 2,102,629 1,986, ,707 2,127,106 1,900, ,103 97,728 73,155 70,559 40,240 17,161,164 16,180,880 10,924,489 17,781,426 17,783,678 7,059,884 6,903,553 2,067,492 7,171,734 7,779,993 $ 24,221,048 $ 23,084,433 $ 12,991,981 $ 24,953,160 $ 25,563,671 1,254, ,669 1,043,320 1,149,734 1,430,410 12,665 73, , , , ,916 1,524,401 1,498, , , , , , , , , , ,487 63,665 10, ,814 1,798,455 2,720,679 12,287-3,620,523 4,914,835 5,358,673 2,383,361 2,615,591 3,719,765 4,054,643 4,017,015 4,188,825 4,417,654 3,142,733 3,323,610 3,381,212 3,571,329 3,795, , , , , ,860 7,412,020 7,485,076 7,518,478 8,141,190 8,882,652 $ 11,032,543 $ 12,399,911 $ 12,877,151 $ 10,524,551 $ 11,498,243 $ (13,540,641) $ (11,266,045) $ (5,565,816) $ (15,656,112) $ (15,168,087) 352, ,523 5,450, ,456 1,102,659 $ (13,188,505) $ (10,684,522) $ (114,830) $ (14,686,656) $ (14,065,428) 4,716,776 4,690,753 4,686,897 4,726,990 5,377,109 1,746,381 1,676,315 1,399,934 1,301,618 1,472,855 1,580,452 1,454,930 1,561,919 1,603,425 1,796,581 3,279,153 3,952,591 4,351,654 4,500,589 4,496, , ,918 96,060 7,377 79, , , , , ,456 1,553,854 1,260,000 1,260,000 1,549,516 1,410,000 13,741,465 13,546,969 14,184,779 14,325,664 15,258, ,249 41,323 38,372 40,984 18, , , , ,464 6,504 (1,553,854) (1,260,000) (1,260,000) (1,549,516) (1,410,000) (1,258,183) (1,063,445) (1,012,371) (1,357,068) (1,384,848) $ 12,483,282 $ 12,483,524 $ 13,172,408 $ 12,968,596 $ 13,873,754 $ 200,824 $ 2,280,924 $ 2,134,367 $ (1,330,448) $ 90,515 (906,047) (481,922) (425,086) (387,612) (282,189) $ (705,223) $ 1,799,002 $ 1,709,281 $ (1,718,060) $ (191,674) 99

123 Schedule 3 City of Eustis Fund Balances, Governmental Funds Last Ten Years (Modified Accrual basis of Accounting) Fiscal Year Ending September General Fund General Fund: Reserved: RV Park Proceeds $ 5,964,290 $ 5,964,290 $ 5,964,290 $ 5,964,290 S - S - S - $ - $ - $ - Designated for Emergency 100, , , , , , Reserved for Self Insurance , Industrial Park 48,112 48,112 48,112 48,112 48,112 48, Non-Spendable Restricted Committed ,813,321 1,843,321 Unassigned 3,784,011 4,534,206 4,401,991 3,247,426 8,387,158 8,054,338 8,365,290 7,482,073 4,956,071 5,274,791 Total General Fd. $ 9,896,413 $ 11,229,317 $ 11,080,207 $ 9,835,089 $ 9,010,531 $ 8,670,211 $ 8,365,290 $ 7,482,073 $ 6,769,392 $ 7,118,112 Major Funds Street Improvement Fund: Reserved Roads & Streets $ 876,598 $ 1,108,596 $ 1,048,501 $ 862,653 $ 853,090 $ 765,041 $ - $ - $ - $ - Non-Spendable Restricted , , , ,855 Committed , , , ,851 Unassigned Total Street Improvement Fd. $ 876,598 $ 1,108,596 $ 1,048,501 $ 862,653 $ 853,090 $ 765,041 $ 804,675 $ 918,555 $ 665,989 $ 567,706 Sales Tax Revenue Fund: Reserved Capital Projects $ 4,054,851 $ 4,117,196 $ 4,753,701 $ 4,779,936 $ 4,222,726 $ 378,638 $ - $ - $ - $ - Non-Spendable Restricted ,844,521 2,745,902 2,376,456 1,600,733 Committed Unassigned Total Sales tax Rev. Fd. $ 4,054,851 $ 4,117,196 $ 4,753,701 $ 4,779,936 $ 4,222,726 $ 378,638 $ 2,844,521 $ 2,745,902 $ 2,376,456 $ 1,600,733 Community Redevelopment: Reserved CRA Expenditure $ 416,761 $ 797,280 $ 1,296,378 $ 1,585,012 $ 1,781,699 $ 915,029 $ - $ - $ - $ - Non-Spendable Restricted ,093,052 1,103, , ,432 Committed Unassigned Total Com. Redevelopment $ 416,761 $ 797,280 $ 1,296,378 $ 1,585,012 $ 1,781,699 $ 915,029 $ 1,093,052 $ 1,103,878 $ 737,414 $ 893,

124 City of Eustis Fund Balances, Governmental Funds Last Ten Years (Modified Accrual basis of Accounting) Page 2 of 2 Fiscal Year Ending September Stormwater Utility Fund: Reserved for Storwater $ 170,300 $ 159,911 $ 318,427 $ 592,308 $ 741,928 $ 583,907 $ - $ - $ - $ - Non-Spendable Restricted Committed ,168, , , ,313 Unassigned Total Stormwater Utility $ 170,300 $ 159,911 $ 318,427 $ 592,308 $ 741,928 $ 583,907 $ 1,168,464 $ 465,872 $ 700,871 $ 733,313 Non-Major Funds All Other Governmental Funds Reserved Library $ 22,850 $ 152,382 $ 145,108 $ 154,583 $ 149,634 $ 135,766 $ - $ - $ - $ - Police Automation 3,244 19,805 18,944 25,759 34,821 38, Police Training 31,043 17,394 53,544 55,832 6, Police Forfeitures ,609 39, Community Development 908, , , , , , Roads and Streets , Capital Projects 633,519 1,135,374 1,324,348 1,397,874 1,287,937 1,063, Cemetery 250, , , , , , Unreserved 170, , , , , , Non-Spendable , Restricted , Committed , Unassigned Total All Other Funds $ 2,019,542 $ 2,191,225 $ 2,611,287 $ 2,979,625 $ 2,852,659 $ 2,297,776 $ 1,265,783 $ 1,145,683 $ 1,178,100 $ 986,

125 Schedule 4 City of Eustis Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified Accrual basis of accounting) Fiscal Year Ending September Revenues: Ad Valorem $ 3,709,587 $ 4,202,531 $ 4,834,561 $ 4,870,915 $ 4,647,621 $ 4,716,776 $ 4,690,753 $ 4,686,897 $ 4,726,990 $ 5,377,109 Franchise Fees 1,161,183 1,366,483 1,432,181 1,404,747 1,503,027 1,580,452 1,454,930 1,399,934 1,301,618 1,472,855 Utility Service Taxes 1,299,367 1,412,148 1,519,034 1,508,302 1,535,963 1,746,381 1,676,315 1,561,919 1,603,425 1,796,581 State Revenue Sharing 2,169,810 2,280,716 4,012,518 3,541,885 3,240,500 3,279,153 3,409,969 1,884,667 1,970,900 1,887,576 Other Intergovernmental Revenues 3,327,956 3,366,225 1,774,437 1,465,108 1,564,936 1,351,099 3,043,045 5,017,169 2,604,112 2,636,529 Licenses and Permits 766, , , , , , , , , ,565 Fines and Forfeitures 114, , , , ,556 83,851 68,717 74,404 52,458 67,367 Charges for Services 1,203,032 1,248,637 1,713,044 1,747,234 1,766,931 1,747,833 1,707,840 1,866,105 1,859,896 1,822,143 Interest 357, , , , , , ,918 96,060 7,377 79,345 On-Behalf Payments , , , , , ,099 Other Sources 954, , , , , , , , , ,025 Total Revenues 15,063,624 16,876,227 17,560,568 16,380,422 15,516,186 15,808,132 $ 17,201,804 $ 17,847,468 $ 15,159,509 $ 16,464,194 Expenditures: General Government and Admin. 3,058,264 3,069,258 3,957,601 5,088,464 5,139,487 4,632,925 4,300,048 4,282,671 4,369,033 4,240,947 Public Safety 4,958,117 5,535,035 6,566,033 6,606,388 6,085,172 6,410,651 6,421,483 6,586,930 7,017,122 6,989,996 On-Behalf Payments , , , , , ,099 Physical Environment ,528 Transportation 1,847,340 1,715,626 2,034,575 2,323,859 2,040,644 1,944,749 2,028,208 2,176,994 2,168,875 1,726,889 Culture and Recreation 1,998,790 2,274,195 2,593,123 2,554,786 2,272,527 1,812,085 1,676,290 1,801,921 1,658,557 1,645,531 Nondepartmental 510, , ,500 - Capital Outlay 1,195,880 1,629,474 1,658,617 1,286,866 1,893,866 4,209,171 4,203,044 5,246,982 2,178,048 2,835,938 Debt Service Interest 153, , , , , , , , , ,000 Principal 185, , , , ,808 77,827 94,478 69,905 70,761 23,990 Total Expenditures 13,906,911 15,468,997 17,357,985 18,355,267 18,101,557 19,685,997 19,316,712 20,787,289 18,142,766 18,402,918 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,156,713 1,407, ,583 (1,974,845) (2,585,371) (3,877,865) (2,114,908) $ (2,939,821) $ (2,983,257) $ (1,938,724) Other Financing Sources (Uses): Transfers In 1,691,733 1,744,868 2,021,311 1,935,385 1,913,183 2,573,087 2,883,842 2,487,663 2,215,833 2,135,374 Transfers Out (676,684) (555,890) (877,434) (708,299) (649,422) (1,019,233) (1,623,842) (1,227,663) (666,317) (725,374) Proceeds from Borrowing Total Other Financing Sources (Uses) 1,015,049 1,188,978 1,143,877 1,227,086 1,263,761 1,553,854 1,260,000 1,260,000 1,549,516 1,410,000 Net Change In Fund Balances $ 2,171,762 $ 2,596,208 $ 1,346,460 $ (747,759) $ (1,321,610) $ (2,324,011) $ (854,908) $ (1,679,821) $ (1,433,741) $ (528,724) Debt Service as a Percentage of Noncapital Expenditures 2.66% 3.95% 3.49% 2.90% 2.98% 2.96% 3.24% 3.15% 3.20% 3.14% 102

126 Schedule 5 CITY OF EUSTIS, FLORIDA TAXABLE AND ESTIMATED ACTUAL VALUE LAST TEN FISCAL YEARS TAXABLE ASSESSED VALUATION ASSESSED TOTAL TOTAL TOTAL (1) VALUE AS A FISCAL REAL PERSONAL CENTRAL TAXABLE DIRECT ESTIMATED PERCENTAGE YEAR PROPERTY PROPERTY PROPERTY VALUATION RATE ACTUAL VALUE OF ACTUAL $ 590,377,448 $ 64,496,918 $ 285,278 $ 655,159, $ 727,955, % ,043,437 62,532, , ,897, ,219, % ,371,108 67,887, , ,547, ,012,831, % ,428,945 69,926, ,214 1,067,615, ,186,239, % ,835,965 65,231, ,942 1,022,325, ,135,917, % ,604,313 64,598, , ,505, ,053,895, % ,953,679 58,111, , ,457, ,174, % ,535,939 56,736, , ,574, ,416, % ,136,592 54,972, , ,281, ,534, % ,502,989 56,293, , ,048, ,942, % (1) Based on Florida Department of Revenue Certifications of assessed tax rolls at 90% or more of the estimated property actual value. Total assessed value assumed to be at 90%. Prior years were estimates only. Actual was obtained from property appraisers office for Due to the increasing number of exemptions the parentage has been reduced over the years and is expected to continue in the future. 103

127 Schedule 6 City of Eustis Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (Per One Thousand Dollars of Taxable Value) City Direct Rates Overlapping Rates Lake Lake Lake Total County County Lake County North Lake North Lake St. Johns Fiscal Basic Redev- Street City of Commission Commission County Water Hospital Ambulance Water Mgmt. Year Rate District Improv. Eustis Gen. Fund Debt Serv. School Board Authority District District District TOTAL The direct city rate is set by the commission each year. The city as well as other governments are required to contribute the incremental taxable value in excess of the base year of The city also supplements the Street Improvement Fund. The overlapping rate represents agencies which have taxing authority within the area. These rates plus the city rate determine the total millage rate attributed to property within the city. 104

128 Schedule 7 CITY OF EUSTIS, FLORIDA PRINCIPAL TAXPAYERS CURRENT AND NINE YEARS AGO FISCAL YEARS ENDING SEPTEMBER 30TH (Source Lake County Property Appraisers Office) PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL ASSESSED ASSESSED ASSESSED ASSESSED TAXPAYER VALUATION Rank VALUATION VALUATION Rank VALUATION Duke (Progress) Energy 10,254, % 15,245, % Bre Tarpon - Eustis Village LLC 10,959, % 11,231, % Florida Food Products 3,706, % 9,340, % MHC Southern Palms LLC 6,564, % 8,101, % Sprint/Embarq 12,339, % 6,993, % MHC Haselton Village LLC % 4,382, % Eustis Square One LLC - - 4,690, % Prestige Ford 3,504, % 3,701, % Eustis Plaza, Inc ,540, % Club at Eustis Partnership % 3,108, % Equity One, Inc. 5,639, % - - U.S. Nutraceuticals 5,262, % - - Shlytter, Robert Trustee 4,328, % - - CWS Communities L.P. 4,135, % ,693, % 70,336, % SOURCE: Lake County 2014 Tax Assessor's Office (Total Eustis: $759,474,327) 105

129 Schedule 8 CITY OF EUSTIS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS FISCAL TOTAL TAX CURRENT LEVY PERCENT DELINQUENT TOTAL PERCENT YEAR LEVY COLLECTIONS OF LEVY TAX TAX TOTAL COLLECTED COLLECTIONS COLLECTIONS COLLECTIONS TO LEVY $ 3,825,669 $ 3,698, % $ 10,619 $ 3,709, % ,307,848 4,192, % 10,250 4,202, % ,003,972 4,827, % 7,505 4,834, % ,018,826 4,632, % 238,204 4,870, % ,813,415 4,431, % 213,698 4,645, % ,862,610 4,487, % 229,096 4,716, % ,831,009 4,425, % 265,456 4,690, % ,823,340 4,479, % 207,274 4,686, % ,875,857 4,497, % 229,382 4,726, % ,548,361 5,148, % 228,945 5,377, % NOTE: Florida Statute allows a discount for early payment of taxes of 4% in November, 3% in December, 2% in January, and 1% in February. Taxes become delinquent on April 1 of each year. County Tax Collector is responsible for collecting and remitting all property taxes. They do not keep track of amounts which are past due on a regular basis. Once a year they consolidate all past due amounts and have a tax certificate sale. The money obtained from this sale is then distributed to the proper taxing authority. 106

130 Schedule 9 City of Eustis Ratios of Outstanding Debt by Type Last Ten Fiscal Years General Activities Business-Type Activities Sales Sur Sales Sur Sales Sur State Total Fiscal Tax Tax - Water Tax Sewer Utility Revolving Primary Per Year 1997A Total Rev. Bonds Loan Total Government Capita $ 3,400,000 $ 988,750 $ 1,186,250 $ 5,575,000 $ 149,759 $ 4,807,539 $ 4,957,298 10,532, ,225, ,750 1,109,250 5,260,000 82,339 4,557,733 4,640,072 9,900, ,035, ,500 1,029,500 4,925,000-4,300,651 4,300,651 9,225, ,835, , ,000 4,575,300-4,036,078 4,036,078 8,611, ,625, , ,750 4,210,000-3,763,798 3,763,798 7,973, ,400, , ,500 3,830,000-3,483,584 3,483,584 7,313, ,165, , ,500 3,435,000-3,195,207 3,195,207 6,630, ,910, , ,750 3,015,000-2,898,428 2,898,428 5,913, ,640, , ,250 2,575,000-7,526,631 7,526,631 10,101, ,350, , ,000 2,110,000-7,047,571 7,047,571 9,157,

131 Schedule 10 City of Eustis Direct Governmental Activities Debt As of September 30, 2014 Beginning Amount Debt Percentage Governmental Revenue Bonds Debt Repaid Outstanding Applicable Series 1997A Sales-Sur Tax: Debt Repaid with Sales Sur-Tax Proceeds 1,640, ,000 1,350, % Series 2004 Sales-Sur Tax: Debt Repaid with Water Impact Fees 430,750 80, , % Debt Repaid with Sewer Impact Fees 504,250 94, , % Total Debt $ 2,575,000 $ 465,000 $ 2,110, % The city has only revenue bonds at this time. The 1997A is secured by the franchise revenues from Progress Energy. The payments are paid from the General Fund. The 2004A is secured by the discretionary sales sur-tax and the franchise revenues from Progress Energy. The actual payment is made from the water impact fee collections and the sewer impact fee collections. The City of Eustis does not have any overlapping debt. All debt is secured through a specific revenue source exclusive to the City of Eustis. 108

132 Schedule 11 1 of 2 City of Eustis Pledged-Revenue Coverage Last Ten Years Water & Sewer Pledged Bonds (1) (2) Less Add Back Net Total Fiscal Utility Operating Depreciation Available Revenue Bond 1996 State Revolving Loan Debt Year Revenues Expenses Expense Revenue Principal Interest Principal Interest Payments Coverage $ 8,275,576 $ 5,320,589 $ 1,418,669 $ 4,373,656 $ 290,000 $ 14,461 $ 242,733 $ 144,347 $ 691, ,548,995 6,139,246 1,660,660 6,070,409 85,000 5, , , , ,737,461 6,444,934 1,799,890 4,092, , , , ,480,334 6,855,878 1,964,540 2,588, , , , ,080,886 6,698,303 2,085,349 2,467, , , , ,575,442 6,956,124 2,137,932 2,757, , , , ,640,308 6,808,047 2,161,578 2,993, ,378 95, , ,727,735 6,844,183 2,101,875 2,985, ,779 87, , ,292,654 6,892,103 2,202,862 3,603, , , , ,889,156 7,577,460 2,257,048 3,568, , , , ) For purposes of debt coverage the following is a list of revenues to be considered: All water and sewer revenues, water and sewer impact fees, and stormwater fees. The interest in the renewal and replacement and expansion funds are not include as part of the debt coverage. The State Revolving Loan only allows for Gross Operating Revenues. 2) Direct operating expenses excludes depreciation expenses. 109

133 2 of 2 General Government Sales Sur-Tax 1997A Series Sales Sur-Tax 2004A Series Progress Disc. Sales Energy Tax & Prog. Franchise Energy Fees Principal Interest Total Coverage Fran. Fees Principal Interest Total Coverage $ 565,728 $ 160,000 $ 95,566 $ 255, $ 2,021,475 $ 25,000 $ 61,100 $ 86, , , , , ,123, ,000 85, , , , , , ,086, ,000 83, , , ,000 88, , ,969, ,000 53, , , ,000 45, , ,892, ,000 31, , , ,000 48, , ,905, ,000 29, , , ,000 59, , ,902, ,000 34, , , ,000 7, , ,902, ,000 6, , , ,000 36, , ,906, ,000 23, , , ,000 15, , ,026, ,000 10, , A Total Issue 2004 A Issue Progress 61% 39% Energy Allocated Allocated Sales Tax Total Fiscal Franchise to 1997A to 2004A Revenue 2004A Year Fees Series Series Receipts Issue , , ,695 1,659,780 2,021, ,093, , ,437 1,697,024 2,123, ,132, , ,597 1,645,314 2,086, ,131, , ,404 1,527,661 1,969, ,231, , ,093 1,412,547 1,892, ,316, , ,357 1,392,608 1,905, ,200, , ,013 1,434,711 1,902, ,158, , ,937 1,450,578 1,902, ,073, , ,595 1,487,814 1,906, ,243, , ,816 1,541,790 2,026,

134 Schedule 12-1 City of Eustis Demographic and Economic Statistics Last Ten Years Eustis School Information Enrollment (4) and Grading (6) % increase Consumer Eustis Population (5) Price Median School Heights Eustis Eustis Eustis Year Eustis County %of Cty. Index (3) Age Enrollment Elementary Elementary Middle High , , % ,334 B B B C , , % ,551 A B A C , , % ,564 A A A D , , % ,572 A A A C , , % (1.29) ,546 B A A D , , % ,332 B A A B , , % ,083 B C B B , , % ,702 C A B C , , % ,682 D B C B , , % ,539 F B B C (2) Source University of Florida Bureau of Economic & Business Research. Provides relative costs of living. The Average is set at 100% (3) Source (4) Source Lake County School Board, Tavares, Florida ( - Dept of Growth Planning- Incl Lake Tech) (5) Source US Census Bureau and Office of Economic & Demographic Research (6) Source Florida Dept of Education ( (7) Source US Bureau of Labor Statistics ( 111

135 Schedule 12-2 City of Eustis Demographic and Economic Statistics Last Ten Years Per Capita Income (1) Median Household Income (1) Year Florida Lake Orange Seminole Sumter Marion Volusia Florida Lake Orange Seminole Sumter Marion Volusia ,534 27,924 30,068 36,668 20,677 25,721 27,117 40,535 40,745 41,725 50,842 37,523 34,948 37, ,001 28,942 31,569 38,838 21,878 26,893 28,347 42,437 40,059 44,183 52,390 36,194 35,974 38, ,798 30,472 33,237 40,891 23,034 28,314 29,845 44,680 42,176 46,518 55,159 38,107 37,875 40, ,444 29,815 33,335 40,946 24,135 29,012 29,615 47,804 46,557 50,988 56,315 42,828 39,354 42, ,417 30,460 35,303 42,223 26,481 30,322 30,374 47,804 46,557 50,988 56,315 42,828 39,354 42, ,064 31,520 36,639 43,439 27,504 31,225 32,098 44,857 45,517 50,674 58,175 48,106 40,266 45, ,965 30,785 36,400 42,340 30,259 31,097 32,255 44,390 42,343 45,105 57,381 45,165 37,162 41, ,636 33,846 35,990 40,914 27,824 32,709 33,436 44,250 44,965 44,635 54,449 44,595 36,425 38, ,012 34,442 37,013 42,191 35,032 35,570 34,445 45,006 41,579 45,565 54,901 47,017 37,287 40, ,497 34,782 37,844 42,986 37,206 34,437 34,530 47,886 44,244 46,675 55,195 52,670 38,783 40,908 (1) Source US Department of Commerce, Bureau of Economic Analysis (Florida Research Economic Database- Last Yr estimate based on State Est. (2) Source University of Florida Bureau of Economic & Business Research. Provides relative costs of living. The Average is set at 100% (3) Source (4) Source Lake County School Board, Tavares, Florida (5) Source US Census Bureau and Office of Economic & Demographic Research (6) Source Florida Dept of Education ( (7) Source US Bureau of Labor Statistics ( 112

136 Schedule 12-3 City of Eustis Demographic and Economic Statistics Last Ten Years Cost of Living Index Lake and Surrounding Counties (2) Unemployment Lake and Surrounding Counties (1) Year Lake Orange Seminole Sumter Marion Volusia Lake Orange Seminole Sumter Marion Volusia (1) Source US Department of Commerce, Bureau of Economic Analysis (Florida Research Economic Database- Last Yr estimate (2) Source University of Florida Bureau of Economic & Business Research. Provides relative costs of living. The Average is set at 100% (3) Source (4) Source Lake County School Board, Tavares, Florida (5) Source US Census Bureau and Office of Economic & Demographic Research (6) Source Florida Dept of Education ( (7) Source US Bureau of Labor Statistics ( 113

137 Schedule 13 City of Eustis Full-Time Equivalent City Government Employees by Function/Program Last Ten Years (Source Budget for City of Eustis and Human Resources) Full-Time Equivalent Employees as of September 30th Function/Program City Manager City Clerk Finance Development Services Purchasing Human Resources Maintenance Garage Building Maintenance Park Maintenance Cemetery Total General Government Police Sworn Officers Reserve Officers Civilians Total Police Fire Fighters Sworn Fire Fighters Vol. FTE Civilians Total Fire Building Inspections Total Public Safety Library Recreation Total Leisure Services Public Services Water Distribution Wastewater Total Water and Sewer Public Works Stormwater Total Streets and Stormwater Total Government Employees

138 Schedule 14 City of Eustis Various Indicators By Function/Program Last Ten Years Function/Program General Last Charter Amendment Number of Commissioners Form of Government March 10, Commission 4 Year Staggered Term of Office - Appointed Manager Municipal Boundaries Number of Vehicles Number of Buildings Per Capita Taxable Value 39,527 38,091 39,091 41,897 46,660 51,902 55,700 58,019 51,309 42,953 38,804 Per Capita Taxes Levied Police Number of Stations Protection Per 1, Number of Sworn Officers Number of Arrests 1, , Fire Number of Stations Number of Volunteers Protection Per 1, Number of Firefighters Number of Calls 4,011 3,708 3,792 3,756 3,775 3,469 3,115 3,158 2,931 2,744 1,471 Building Building Permits Issued 1,554 1, , ,413 1,650 2,686 3,033 1,957 New Commercial Construction New Residential Construction Value of Permits Issued 38,208,925 23,618,336 15,871,612 18,522,045 17,271,507 10,075,598 30,791,331 38,979,084 80,920,793 65,077,793 33,135,756 Number of Vehicles Recreation Number of Parks Acres Maintained Number of Vehicles Number of Buildings Number of Citizens Served 18,896 13,348 13,778 13,568 14,734 10,307 13,070 11,207 8,456 13,477 28,322 Library Number of Libraries Volume in Collection 123, , , , , , , , , , ,145 Number of Items Circulated 84,941 91,437 92,266 99, ,061 97, , ,372 99,683 97, ,711 Collection Per Citizen Number of Patrons 13,855 13,391 9,783 10,272 10,788 11,802 11,247 11,032 9,721 8,889 8,749 Collection Per Patrons Public Works Miles of Streets Number of Street Lights 928 1,317 1,317 1,317 1,317 1,317 1,317 1,317 1,317 1,317 1,317 Number of Traffic Signals Number of School Signals Number of Vehicles Number of Buildings Water Number of Units Served 10,701 11,340 12,168 12,134 12,093 12,186 12,319 10,388 13,936 12,333 11,388 Average Daily Flow 3.21 Million Gal Million Gal Million Gal Million Gal Million Gal Million Gal Million Gal Million Gal Million Gal Million Gal Million Gal. Miles of Water Main Number of Plants Number of Vehicles Number of Buildings Wastewater Miles of Sanitary Sewers Number of Vehicles Number of Buildings Number of Plants

139 Schedule 15 Page 1 of 2 City of Eustis Sewer Sold by Type of Customer And Associated Rates Last Ten Years (In Millions of Gallons) Type of Customer Residential Inside Outside Industrial Inside Outside Commercial Inside Outside Other Inside Outside Total Sewer Rates (Per 1,000 Consumed) Effective Date 6/1/05 8/1/06 8/1/07 6/1/08 6/1/09 6/1/10 6/1/11 6/1/12 6/1/13 6/1/14 Residential Inside Availability Charge Min. Inc. 1st 3,000 Rate per 1,000 Capped at 10,000 Gal Residential Outside Availability Charge Min. Inc. 1st 3,000 Rate per 1,000 Capped at 10,000 Gal Commercial Inside Availability Charge Min. Inc. 1st 6,000 Rate per 1,000 No Cap on Usage Commercial Outside Availability Charge Min. Inc. 1st 6,000 Rate per 1,000 No Cap on Usage Industrial Inside Availability Min. Inc. 1st 20,000 Rate per 1,000 No Cap on Usage Over 500,

140 Schedule 15 Page 2 of 2 City of Eustis Associated Rates Last Ten Years (Continued) Sewer Rates (Per 1,000 Consumed) Effective Date 6/1/05 8/1/06 8/1/07 6/1/08 6/1/09 6/1/10 6/1/11 6/1/12 6/1/13 6/1/14 Industrial Outside Availability Min. Inc. 1st 20,000 Rate per 1,000 No Cap on Usage Over 500,000 RV Parks Inside Availability Min. Inc. 1st 1,000 Rate per 1,000 Over Min RV Parks Outside Availability Min. Inc. 1st 1,000 Rate per 1,000 Over Min Percentage Increase 6.81% 5.10% 0.00% 0.00% 0.00% 1.67% 1.67% 1.34% 1.34% 0.00% 117

141 Schedule 15-1 Page 1of 2 City of Eustis Water Sold by Type of Customer And Associated Rates Last Ten Years (In Millions of Gallons) Fiscal Year Type of Customer Residential Inside Outside Industrial Inside Outside Commercial Inside Outside Other Inside Outside Total , , , , , , , Water Rates (Per 1,000 Consumed) Effective Date 6/1/05 8/1/06 8/1/07 6/1/08 6/1/09 6/1/10 6/1/11 6/1/12 6/1/13 6/1/14 Residential Inside Availability Charge Min. Inc. 1st 3,000 4,000 to 20,000 0 to 8, ,001 to 20, ,001 to 30, ,001, to 50, Over 30, Over 50, Irrigation 0 to 12, to 30,000 12,001 to 20, Over 20, ,001 to 100,000 Over 100,000 Residential Outside Availability Charge Min. Inc. 1st 3,000 4,000 to 20,000 0 to 8, ,001 to 20, ,001 to 30, ,001, to 50, Over 30, Over 50, Irrigation 0 to 12, to 30,000 12,001 to 20, Over 20, ,001 to 100,000 Over 100,

142 Schedule 15-1 Page 2 of 2 City of Eustis Associated Rates Last Ten Years (Continued) Water Rates (Per 1,000 Consumed) Effective Date 6/1/05 8/1/06 8/1/07 6/1/08 6/1/09 6/1/10 6/1/11 6/1/12 6/1/13 6/1/14 Commercial Inside Availability Charge Min. Inc. 1st 6,000 7,000 to 30,000 0 to 30, Over 30, ,000 to 100,000 Over 100,000 Irrigation 0 to 50, ,001 to 100, to 100, Over 100, Commercial Outside Availability Charge Min. Inc. 1st 6,000 7,000 to 30, Over 30, ,000 to 100,000 Over 100,000 Irrigation 0 to 50, ,001 to 100, to 100, Over 100, Industrial Inside Availability Min. Inc. 1st 20,000 21,000 to 350,000 0 to 350, Over 350, ,000 to 500,000 Over 500,000 Industrial Outside Availability Min. Inc. 1st 20,000 21,000 to 350,000 0 to 350, Over 350, ,000 to 500,000 Over 500,000 RV Parks Inside Availability Min. Inc. 1st 1,000 Per 1,000 Gallons RV Parks Outside Availability Per 1,000 Gallons Percentage Increase 6.81% 5.10% 0.00% 0.00% 0.00% 6.81% 6.81% 3.95% 3.95% 3.95% 119

143 Table 16 Golden Triangle Ad Valorem Tax Profile Last Ten Years September 30 Municipal Assessed and Taxable Values Municipal Government Levies Estimates of Unrealized Tax Revenues Per Capita Per Capita Per Capita Total Total Per Capita Population Assessed Assessed Taxable Taxable Operating Total Total Taxes Levied Unrealized Unrealized Years Estimates Value Value Value Value Millage Taxes Levied Taxes 10 Mills Tax Revenues Tax Revenues Eustis ,214 1,032,711,614 53, ,877,188 38, ,548, ,318,772 1,770, ,573 1,042,894,874 56, ,027,791 39, ,875, ,260,278 2,384, ,483 1,109,326,219 60, ,381,491 41, ,834, ,743,815 2,909, ,210 1,225,470, ,796, ,831, ,497,966 3,666, ,275 1,375,471,107 75, ,505,840 51, ,870, ,499,958 4,629, ,354 1,500,333,355 81,744 1,022,325,397 55, ,800, ,195,850 5,395, ,401 1,462,352,142 79,471 1,067,615,340 58, ,026, ,676,153 5,649, ,766 1,271,558,295 71, ,547,969 51, ,013, ,115,480 4,101, ,249 1,018,915,780 59, ,897,780 42, ,326, ,408,978 3,082, , ,302,183 53, ,159,644 38, ,826, ,551,596 2,725, Tavares ,411 1,062,464,247 73, ,559,312 41, ,888, ,025,593 2,137, ,056 1,055,879,616 75, ,010,315 42, ,309, ,920,103 1,610, ,015 1,101,381,095 78, ,512,364 44, ,309, ,255,124 1,945, ,333 1,172,251, ,263,560 50, ,700, ,762,636 2,062, ,329 1,324,432,399 99, ,116,659 60, ,063, ,101,167 3,037, ,344 1,410,921, , ,300,751 65, ,433, ,693,008 3,259, ,013 1,363,291, , ,861,194 70, ,953, ,138,612 4,185, ,552 1,137,857,386 90, ,246,068 57, ,925, ,242,461 3,317, , ,064,544 76, ,173,575 46, ,835, ,231,736 2,396, , ,161,165 70, ,134,463 40, ,401, ,431,345 2,029, Mount Dora ,895 1,079,326,453 83, ,434,428 65, ,796, ,464,344 3,667, ,693 1,088,473,061 85, ,882,478 65, ,725, ,694,051 4,008, ,557 1,135,964,767 90, ,405,079 69, ,685, ,694,051 4,008, ,687 1,204,229, ,851,972 78, ,616, ,198,520 4,581, ,100 1,323,059, , ,673,443 89, ,992, ,946,734 4,954, ,290 1,421,135, ,876 1,059,952,506 93, ,319, ,599,525 5,279, ,945 1,372,036, ,863 1,072,536,796 89, ,383, ,725,368 5,342, ,125 1,161,378, , ,374,815 79, ,308, ,883,748 3,575, , ,267,341 84, ,644,059 65, ,387, ,186,441 2,799, , ,572,657 74, ,600,781 57, ,823, ,186,008 2,362, Source: Lake County Property Appraiser, FL Department of Revenue, and 120

144 Table 17 City of Eustis Comparison of Taxes Levied Lake County Cities Last 10 Years Millage Rate Data Current Ten Year Ten Year Year Ranking Average Ranking Astatula Clermont Eustis Fruitland Park Groveland Howey-in-the-Hills Lady Lake Leesburg Mascotte Minneola Montverde Mount Dora Tavares Umatilla Taxable Value Data Current Ten Year Ten Year Year Ranking Average Ranking Astatula 14 54,467, ,304,713 46,634,419 48,887,670 55,200,614 62,104,008 68,389,036 74,099,645 N/A 43,295,098 35,664,746 Clermont 1 2,111,311, ,779,778,790 1,727,135,063 1,783,353,568 1,909,837,041 2,204,240,070 2,425,735,458 2,485,603,197 2,017,376,695 1,541,703,974 1,198,455,849 Eustis 4 769,500, ,877, ,027, ,381, ,796, ,995,773 1,019,584,999 1,067,615, ,547, ,897, ,159,644 Fruitland Park 9 151,213, ,620, ,844, ,944, ,288, ,350, ,128, ,257, ,233, ,892, ,195,470 Groveland 7 396,470, ,166, ,543, ,431, ,115, ,708, ,019, ,729, ,029, ,528, ,598,379 Howey-in-the-Hills 13 79,731, ,993,515 69,355,277 73,537,602 86,986,584 93,606, ,407, ,673, ,714,811 72,968,956 63,063,898 Lady Lake 5 721,832, ,177, ,977, ,142, ,109, ,701, ,757, ,854, ,420, ,944, ,412,432 Leesburg 2 1,133,757, ,115,945,021 1,117,555,183 1,166,846,961 1,279,178,648 1,432,357,813 1,530,372,368 1,587,289,789 1,317,008,576 1,015,691, ,270,259 Mascotte ,192, ,636,009 92,221, ,177, ,901, ,951, ,638, ,395, ,665, ,436,083 89,538,533 Minneola 8 371,587, ,526, ,787, ,707, ,733, ,141, ,886, ,627, ,128, ,874, ,989,523 Montverde 12 79,773, ,975,605 74,114,218 76,200,639 90,736,941 97,261, ,115, ,706, ,207,997 77,392,656 63,994,481 Mount Dora 3 797,592, ,434, ,882, ,405, ,851, ,673,443 1,059,952,506 1,072,536, ,374, ,644, ,600,781 Tavares 6 617,761, ,559, ,010, ,512, ,263, ,116, ,300, ,861, ,246, ,173, ,134,463 Umatilla ,584, ,091, ,298, ,930, ,678, ,059, ,549, ,356, ,658,294 97,058,711 85,254,591 Total Taxes levied Data Current Ten Year Ten Year Year Ranking Average Ranking Astatula , , , , , , , ,448 N/A 168, ,260 Clermont 1 6,430, ,636,795 5,426,658 5,603,297 6,000,112 6,925,722 7,621,661 7,809,765 7,522,798 5,749,014 4,469,042 Eustis 4 4,795, ,548,361 4,875,857 4,834,619 4,830,822 4,870,248 4,800,512 5,026,653 5,013,514 4,326,843 3,826,132 Fruitland Park , , , , , , , , , , ,760 Groveland 7 2,234, ,095,922 2,075,045 2,304,018 2,455,419 2,904,470 3,162,341 2,677,328 2,311,018 1,337,040 1,027,251 Howey-in-the-Hills , , , , , , , , , , ,383 Lady Lake 6 2,280, ,625,222 2,578,635 2,634,952 2,704,288 2,823,788 2,644,812 2,072,080 1,866,525 1,513,479 1,338,507 Leesburg 2 5,423, ,818,539 4,825,492 5,038,328 5,502,974 6,184,778 6,607,995 6,745,982 5,926,539 4,570,613 4,010,716 Mascotte 9 972, , ,681 1,078,549 1,108,432 1,169,422 1,155,641 1,228,935 1,029, , ,142 Minneola 8 1,944, ,002,782 1,945,361 2,179,847 2,136,751 2,088,171 2,464,940 2,110,014 2,017,434 1,574, ,434 Montverde , , , , , , , , , , ,343 Mount Dora 3 4,803, ,796,490 4,725,362 4,685,311 4,611,716 4,992,266 5,319,902 5,383,062 5,308,040 4,387,322 3,823,571 Tavares 5 4,105, ,888,375 3,543,182 4,309,780 4,696,716 5,063,229 5,433,130 4,953,128 3,925,414 2,835,601 2,401,789 Umatilla , , , , , , , , , , ,675 Source: www:dor.state.fl.us 121

145 Schedule 18 CITY OF EUSTIS, FLORIDA PRINCIPAL EMPLOYERS CURRENT YEAR EMPLOYER # EMPLOYEES RANK # EMPLOYEES RANK # EMPLOYEES RANK # EMPLOYEES RANK Publix City of Eustis Ruleme Center Bayview Center Lake Eustis Care Center Eustis High School Lake Community Action Agency Winn Dixie Eustis Middle School Eustis Heights Elementary Burke Industries (Mercer Products) ,634 1,592 1,608 1,

146 OTHER REPORTS

147 INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and City Commissioners City of Eustis Eustis, Florida We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Eustis, Florida (the City) as of and for the year ended September 30, 2014, and the related notes to the financial statements which collectively comprise the City s basic financial statements, and have issued our report thereon dated March 5, Internal Control Over Financial Reporting In planning and performing out audit of the financial statements, we considered the City s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect, and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented or detected, and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above. However, material weaknesses may exist that have not been identified. 123

148 Honorable Mayor and City Commissioners City of Eustis Eustis, 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 of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the City in a separate letter dated March 5, The City s response to the management letter comments identified in our audit is described in the accompanying schedule. We did not audit the City s response and, accordingly we express no opinion on it. Purpose of the Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. March 5, 2015 Ocala, Florida 124

149 INDEPENDENT ACCOUNTANTS REPORT ON COMPLIANCE WITH SECTIONS , FLORIDA STATUTES Honorable Mayor and City Commissioners City of Eustis Eustis, Florida Report on Compliance We have examined City of Eustis, Florida (the City) compliance with requirements of Section , Florida Statutes, as of and for the year ended September 30, 2014, as required by Section (10)(a), Rules of the Auditor General. Management s Responsibility Management is responsible for the City s compliance with those requirements. Accountants Responsibility 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 and, accordingly, including examining, on a test basis, evidence about the City s compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City s compliance with specific requirements. Opinion In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year ended September 30, Restriction on Use This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Council Members, and applicable management, and is not intended to be and should not be used by anyone other than those specified parties. March 5, 2015 Ocala, Florida 125

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151 MANAGEMENT LETTER Honorable Mayor and City Commissioners City of Eustis Eustis, Florida Report on the Financial Statements We have audited the financial statements of the City of Eustis, Florida (the City), as of and for the fiscal year ended September 30, 2014, and have issued our report thereon dated March 5, Auditors Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Chapter , Rules of the Florida Auditor General. Other Reports and Schedule We have issued our Independent Auditors report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements in Accordance with Government Auditing Standards; Independent Accountant s Report on Compliance with Section , Florida Statutes. Disclosures in these reports and schedules, which are dated March 5, 2015, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report except as noted below: Tabulation of Uncorrected Audit Findings Current Year Finding # FY Finding # Official 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 be disclosed in the management letter, unless disclosed in the notes to the financial statements. This information is disclosed in Note 1 to the financial statements. 127

152 Honorable Mayor and City Commissioners City of Eustis Eustis, Florida MANAGEMENT LETTER (Concluded) Financial Condition Section (1)(i)5.a., Rules of the Auditor General, requires that we report the results of our determination as to whether or not the City of Eustis 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 of Eustis did not meet any of the conditions described in Section (1), Florida Statutes. Pursuant to Sections (1)(i)5.c. and (8), Rules of the Auditor General, that we applied financial condition procedures. It is management s responsibility to monitor the City of Eustis s financial condition, and our financial condition assessment was based in part on the representations made by management, and their review of the financial information provided by same. Annual Financial Report Section (1)(i)5b., Rules of the Auditor General, requires that we report the results of our audit determination as to whether the annual financial report for the City for Eustis for the fiscal year ended September 30, 2014, filed with the Florida Department of Financial Services pursuant to Section (1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, In connection with out audit, we determined that these two reports were in agreement. Other Matters Section (1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection to our audit, recommendations number through have been included. Section (1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, State granting agencies, the Honorable Mayor, City Commissioners, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of our audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. March 5, 2015 Ocala, Florida 128

153 MANAGEMENT LETTER COMMENTS Honorable Mayor and City Commissioners City of Eustis Eustis, Florida During the course of our audit, the following items came to our attention. These items involve primarily operational matters, which if improved, will result in more efficient and effective operations: Prior Year Comment New Financial System and Key Accounting Personnel - Updated for 2014 Prior Year Summary In our 2013 management letter comment number , we noted that the City was in the process of implementing a comprehensive new ERP software system (the system) covering all financial applications that went live on October 1, Simultaneously, the City experienced the loss of it Deputy Finance Director who was primarily responsible for the system implementation and shortly after than another key accountant also left the City, leaving the system implementation as well as closing and preparing for audit of the 2013 fiscal year-end in jeopardy. As a part of , we recommended that the City make a concentrated effort to replace the key accounting personnel necessary for successful implementation of the system and that key controls, period end closing routines and appropriate segregation of duties be established for the new system as soon as practical Update - The City hired a consulting firm that successfully assisted with the 2013 closing of the accounting records, the audit process and some system implementation, but was not utilized again until late in the 2014 year. Replacement of the key accounting personnel occurred towards the end of and after the end of fiscal year 2014, so the system implementation went forward without these key positions filled for substantially all of the 2014 year. Accordingly, only partial implementation of the necessary key controls, period end closing routines, and segregation of duties for the new system were completed during the 2014 fiscal year-end. During our interim 2014 audit fieldwork in the summer of 2014, we performed internal control reviews and tests of transactions noting the following issues that were discussed and reported during our interim exit conference: 129

154 Honorable Mayor and City Commissioners City of Eustis Eustis, Florida Prior Year Comments (Continued) MANAGEMENT LETTER COMMENTS (Continued) New Financial System and Key Accounting Personnel - Updated for 2014 (Continued) 1. The utility billing module, which is one of the more complicated applications, had several significant issues: a. The City was unable to fully reconcile the customer accounts receivable and customer deposits from the system subsidiary to the general ledger control, which typically indicates interface problems between the billing module and general ledger. b. Customer water consumption was being rounded down to the nearest 1,000 gallons with the difference being lost in the system, never being charged to the customer in subsequent months. c. There were multiple setup and rate code issues noted such as customers set up with the wrong rate class or inside vs. outside, incorrect tier levels entered and other similar items resulting in billing errors to multiple customers. d. Given the loss of key accounting personnel in the accounting department, the individual that also functioned as back-up for the utility billing manager was no longer available to perform that function leaving the utility billing department without this key back up and liaison to ensure proper integration of utility billing to the general ledger. 2. Users throughout the City had high levels of access to applications within the system, and in some cases had access to modules, which conflict with their job duties. It was noted in the utilities department, that all team members had full access to customer billing and rates and that the payroll manager and the Human Resource (HR) Department also had full access to all aspect of the payroll. It is common during implementation of a new system to allow wider than normal access to the system to facilitate full setup and utilization; however, these access levels must be reevaluated once a critical level of implementation has occurred. Based upon the findings noted above, we recommended in the interim exit conference that the City do a comprehensive review of all of their utility customer set ups and rate codes to ensure that they were properly billed. We also noted and reemphasized the need to hire a Deputy Finance Director to assist with these critical needs and that the consulting firm be re-engaged to help the City with these and other day to day responsibilities of the accounting function. The consulting firm was brought in late in the 2014 fiscal year and immediately began work assisting City personnel with many of the accounting needs and the comprehensive review of the utility billing system that was already underway. The results of that review were that many customer account setup and rate codes were adjusted with appropriate account adjustments; however, the consumption rounding issue noted above was fixed prospectively, but was estimated by the City to have cost the Water and Sewer Fund approximately $143,900 in lost utility revenues before it was corrected. 130

155 Honorable Mayor and City Commissioners City of Eustis Eustis, Florida Prior Year Comments (Concluded) MANAGEMENT LETTER COMMENTS (Continued) New Financial System and Key Accounting Personnel - Updated for 2014 (Concluded) The Deputy Finance Director was hired in October of 2014, who along with the consulting firm began the process to clean up and close the 2014 fiscal year-end accounting records, prepare for the audit and is continuing the task of fully completing the system implementation, as well as developing key controls and closing routines. During the 2015 fiscal year, the City has managed to segregate duties or install detective controls in the payables, payroll and utility billing functions. The City recently experienced the retirement of its Finance Director of many years and has begun the process of finding a replacement for this important position. The City is still experiencing difficulties fully reconciling the customer accounts receivable and customer deposit from the billing module subsidiary to the general ledger control accounts, but believes that the source of the problem has been identified and will soon be corrected. Accordingly, we recommend that the City continue its efforts to fill the newly vacated Finance Director position and continue the efforts begun to refine all aspects of the system conversion, including documenting key system controls and period end closing routines to ensure the timeliness and accuracy of all internal and external financial reporting. Current Year Comments Finance Department Review During 2014, the City engaged a governmental financial consultant to review the City s Finance Department. The report of the consultant echoed many of our recommendations from our Management Letter Comment No noted above and went beyond, to recommend to several long-term goals oriented aspirations for the Finance Department to achieve. As soon as the City has filled the Finance Director position, completed, and refined all aspects of the system conversion, we recommend that this report be reviewed again for implementation of key long-term strategies to improve the functionality of the department Firefighter Pension Plan Investment Custodian As a part of our audit of the City s firefighter pension plan, we reviewed a copy of the investment custodian s service organization s audit report on the design and operating effectiveness of controls (SSAE No. 16, COC 1, Type 2), noting that an adverse auditors opinion was issued for the period for the year ended June 30, We have shared this report with the City and urge that the City and Pension Board review the report and its ramifications and also review the internal controls currently in place at the City and at the plan level to ensure that it is sufficiently robust to detect any abnormalities in investment activity reporting by the investment custodian. This might include requesting the money managers to review the investment custodian activity to ensure that it is consistent with the transactions that they have executed and is consistent with their internal records. 131

156 Honorable Mayor and City Commissioners City of Eustis Eustis, Florida Current Year Comments (Concluded) MANAGEMENT LETTER COMMENTS (Concluded) Firefighter Pension Plan Investment Custodian (Concluded) It is our understanding that the plan intends upon switching investment custodians in the near future, however we believe that the recommendations above would also enhance controls with the new custodian and should be considered for the new custodian as well New Governmental Accounting Standards Board (GASB) Pension Statements During 2014, the City implemented the first of two new GASB pronouncements dealing with pension plan reporting by the plan and for reporting pension costs by the plan s employer. Next year (2015) the final part of the standards will be implemented which will require the City to record the Net Pension Liability (NPL) in the City s enterprise funds and government wide financial statements. The NPL is the amount of the unfunded benefits earned to date that is calculated by the plans actuary. The City reports two single employer defined benefit pension plans (Police and Fire) and is also a member of the Florida Retirement System (FRS), so there will be a significant amount of information and effort required to implement the new standards in Further information on this topic can be found in Note 5 to the City s September 30, 2014 financial statements. We recommend that the City carefully review the requirements of the new standard and take all steps necessary to ensure the information is available to be included in the City s 2015 financial statements Required Affordable Care Act Reporting to IRS in January 2016 Beginning in 2016, the City (like other employers) will be required to provide Form 1095-C (Employer- Provided Health Insurance Offer and Coverage) to all employees by January 31 st of each year and file these forms along with Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) with the IRS by February 28 th of each year. There are significant penalties for incomplete or late filing of these IRS forms. To be able to prepare and file these forms, monthly tracking of health care provided to employees and employees covered spouses and dependents is required. Although it is clear that all large employers will have to report such information, it appears to be unclear who is or will be responsible for tracking this information and preparing the forms; the City or the City s insurance agent or insurance. Additionally, it was unclear whether the City s HR/Payroll application is or will be capable of tracking and/or reporting such information. We recommend that the City work with their insurance agent and provider to determine who is or will be responsible for tracking the required information and who will be preparing the required forms. If the City is or will be responsible for tracking the information and preparing the required forms, the City will need to design and put in place processes and procedures to track such information to ensure that the information is tracked completely and accurately. Additionally, the City will need to consult with its software vendor to determine if the City s HR/Payroll application is capable of tracking and reporting such information within existing applications. March 5, 2015 Ocala, Florida 132

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