Comprehensive Annual Financial Report

Transcription

1 Comprehensive Annual Financial Report Fiscal Year Ending September 30, 2015

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3 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF SARASOTA, FLORIDA For the Fiscal Year Ended September 30, 2015 Prepared By The Financial Administration Department John Lege, CGFO Finance Director

4 In accordance with the City of Sarasota's commitment to its recycling and environmental programs, this document is printed on recycled paper.

5 Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2015 Table of Contents INTRODUCTORY SECTION Letter of Transmittal... Certificate of Achievement... List of Principal Officials... Organization Chart... Page i-v vi vii viii FINANCIAL SECTION Independent Auditor s Report Management s Discussion and Analysis Basic Financial Statements Government-Wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Penny Sales Tax Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Community Redevelopment Agency Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Housing and Community Development Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Fiduciary Net Position - Fiduciary Funds Statement of Changes in Fiduciary Net Position - Fiduciary Funds Component Unit Government-Wide Statements: Statement of Net Position Statement of Activities Notes to the Financial Statements Required Supplementary Information General Employees Defined Benefit Pension Plan Firefighters Defined Benefit Pension Plan Police Officers Defined Benefit Pension Plan Other Post Employment Benefits Plan

6 FINANCIAL SECTION (continued) Page Combining & Individual Fund Statements & Schedules Nonmajor Governmental Funds: Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Special Revenue Funds: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: State Housing Initiative Partnership Development Services Gas Tax Special Law Enforcement (Forfeiture) Golden Gate Point Tourist Development Tax Multi-Modal Transportation Impact Fees Miscellaneous Grants Multi-purpose Debt Service Funds: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: 1992 Refunding Bonds General Obligation Bonds General Obligation Bonds General Obligation Refunding Bonds Build America Bonds Sales Tax Payment Revenue Bonds B First Florida First Florida First Florida Glen Oaks Nonmajor Enterprise Funds: Combining Statement of Net Position - Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses, and Changes in Net Position - Nonmajor Enterprise Funds Combining Statement of Cash Flows - Nonmajor Enterprise Funds Combining Schedule of Net Position Water and Sewer Enterprise System Fund Combining Schedule of Revenues, Expenses, and Changes in Net Position Water and Sewer Enterprise System Fund Internal Service Funds: Combining Statement of Net Position - Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position - Internal Service Funds Combining Statement of Cash Flows - Internal Service Funds Fiduciary Funds: Combining Statement of Fiduciary Net Position Combining Statement of Changes in Fiduciary Net Position Combining Statement of Changes in Assets and Liabilities - Agency Funds STATISTICAL SECTION Financial Trends: Net Position by Component Changes in Net Position Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Revenue Capacity: Assessed Value and Actual Value of Taxable Property Direct and Overlapping Property Tax Rates Principal Property Taxpayers Property Tax Levies and Collections Base Water and Sewer Rates

7 STATISTICAL SECTION (continued) Page Debt Capacity: Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Information Pledged-Revenues Coverage Demographic and Economic Information: Demographic and Economic Statistics Principal Employers in Sarasota County Operating Information: Full-time Equivalent City Government Employees by Function/Program Operating Indicators by Function/Program Capital Assets Statistics by Function/Program SINGLE AUDIT/GRANTS COMPLIANCE Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor s Report on Compliance for Each Major Federal Program and State Project and on Internal Control Over Compliance Required by Circular A-133 and Chapter , Rules of the Auditor General Schedule of Findings and Questioned Costs for the Year Ended September 30, Schedule of Expenditures of Federal Awards and State Financial Assistance for the Year Ended September 30, Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance Independent Accountants Report on Compliance with Section , Florida Statutes Management Letter and Response

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9 March 24, 2016 The Honorable Mayor, Members of the City Commission, Citizens of the City of Sarasota Sarasota, Florida Dear Mayor and City Commissioners: We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of Sarasota, Florida, for the fiscal year ending September 30, This report is presented in conformity with generally accepted accounting principles (GAAP), was prepared by the City s Financial Administration Department, and audited by an independent firm of certified public accountants, Purvis, Gray and Company, LLP, as mandated by both local ordinances and State Statute. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presented data, including all disclosures, rests with the management of the City. We believe the data as presented is accurate in all material respects and is reported in a manner designed to fairly set forth the financial position and results of operations of the City of Sarasota as measured by the financial activity of its various funds. The City is required to undergo an annual single audit in conformity with the provisions of the U.S. Office of Management and Budget s Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and Chapter Rules of the Auditor General, State of Florida. Information related to this single audit, including a schedule of expenditures of Federal awards and State financial assistance, the report of independent auditors on internal controls over financial reporting and compliance with applicable laws and regulations, and a schedule of findings and questioned costs are included. Management of the City is responsible for establishing and maintaining a system of internal controls designed to ensure the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. The internal controls are designed to provide reasonable, but not absolute assurance that the financial statements will be free from material misstatement. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Management s discussion and analysis (MD&A) immediately follows the independent auditor s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Post Office Box 1058, Sarasota, Florida st Street, Sarasota, Florida, Telephone (941) i

10 Profile of the City The City of Sarasota, Florida, was incorporated in 1902, and later re-platted in 1912 to be formally incorporated as a City in The current Charter was revised and approved by the voters of the City on September 3, 1996 and became effective November 1, The City has operated under the Commission - City Manager form of government since The City Commission consists of five elected citizens who are qualified voters in the City. The Commission appoints the City Manager, who is the chief administrative officer of the City, and directs the business of the City and its various departments. The Commission determines policy, adopts legislation, approves the City s budget, sets taxes and fees, appoints the City Auditor and Clerk and the City Attorney, as well as the members of all boards and committees. The City provides a range of municipal services. The public safety operation includes police protection as well as building code compliance and zoning. Recreational services include Lido Beach, the Robert L. Taylor Community Complex, various tennis courts located throughout the City, Bobby Jones Golf Course, a 45-hole course, numerous neighborhood parks, a children s water park on the Bayfront, and a state-of-the-art skateboard park. Public Works provides essential street and highway maintenance, traffic signalization and landscape maintenance as well as solid waste collection. The Public Utilities department provides drinking water and sewer treatment operations and reuse water for irrigation. In addition, the City operates two municipal auditoriums and the award winning 1800 seat Van Wezel Performing Arts Hall. Other services provided include neighborhood and development services, redevelopment, community development, special event permitting, as well as general administrative services. The City also provides an employee and retiree Health Center. The financial statements in this report include the funds of all the activities under the jurisdiction of the City Commission. This includes the Community Redevelopment Agency (CRA), the Golden Gate Point Special District (GGP), the St. Armand s Business Improvement District (BID), and the Downtown Improvement District (DID). The CRA provides for the rehabilitation, conservation and redevelopment of the Downtown and the Newtown Redevelopment area. The purpose of the GGP is to construct and maintain enhancements and improvements within the public rights of way on Golden Gate Point. The BID was created as a dependent taxing authority with the power to levy up to two mills, with City Commission approval, for the purpose of purchasing supplemental services (maintenance, security, sanitation, promotions, infrastructure, and capital improvements). The boundaries of the BID are made up of all parcels of real property located within the Commercial Tourist Zone District in the vicinity of St. Armand s Circle. The DID was created to improve the Downtown Core of the City and is governed by a board of five members, who are non-residential property owners subject to ad valorem taxation within the District and are appointed by the City Commission. Local Economy The City of Sarasota is located on the Gulf of Mexico on the southwest coast of Florida and covers an area of 24 square miles with an estimated population of 52,905. The City, once the winter home of the Ringling Brothers and Barnum & Bailey Circus, is a mecca for those seeking a high quality of life, and host to three growing Universities with a student population of 4,500. The City is a major resort area with an average year round temperature of 71 0 F and miles of pristine white sand beaches that beckon to the hundreds of thousands of tourists that visit year round. The City is the winter home of the Baltimore Orioles major league baseball team. The City owns and operates the Van Wezel Performing Arts Hall, the premier showcase for the performing arts on the Florida southwest coast. In 2007, the City completed phase I of the 29 acre Payne Park which converted a former mobile home park to a beautiful neighborhood landscaped park on the fringe of downtown, with lighted walking and jogging trails, tennis courts, wide open rolling green spaces, a fountain, parking area, restrooms, and a skateboard park. ii

11 The City s functional (seasonal plus tourist) population swells to almost 100,000 during the winter months. The provision for tourist accommodations, restaurants, entertainment, financial institutions, and health services constitutes a major source of employment and contributes significantly to the stability of the local economy. Employment figures for the area have improved from last fiscal year. Sarasota County had an unemployment rate of 5.0% in September 2015, slightly lower than the statewide rate of 5.2% and the national rate of 5.1%. In major publications, Sarasota continues to earn high ratings as a City that is economically vibrant while successfully managing its growth and providing a high quality of life. This includes excellent public and private K-12 schools and local universities, wonderful attractions, and excellent neighborhoods. The City of Sarasota has avoided urban sprawl and overcrowding because the City fathers have put a premium on green space, culture, and an accessible vibrant downtown, guided by the principles of new urbanism. Long-Term Financial Planning The annual budget serves as the foundation for the City s financial planning and control. All departments of the City are required to submit requests to the City Manager. The City Manager uses these requests as the starting point for developing the proposed budget. The City Manager then presents the proposed budget to the City Commission for review during several budget workshops throughout the summer months. The City Commission is required to hold public hearings on the proposed budget and to adopt a final budget no later than September 30 th, the close of the City of Sarasota s fiscal year. The appropriated budget is prepared by fund and department (e.g., Police, Neighborhood and Development, etc.). Department Heads may make budget transfers within their individual departments. Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. The economy and housing market in Sarasota has been making improvements since the end of the Great Recession. Property values since 2012 have increased 11.33%. This increase in property values has generated additional ad valorem tax revenue; helping the City s operating revenue budget and enabling a healthy unassigned fund balance in the General Fund of $16.4 million, which is a 29% ratio to expenditures and an excellent funding level. Relevant Financial Policies In recent years, the City Commission has adopted or amended financial policies with the purpose of maintaining a prudent level of financial resources to support the level of service the City provides to its residents. Policies cover the areas of contingency planning in the event of emergencies; debt management, including debt issuance and management, debt affordability and debt capacity; fees and charges that reflect the cost of City programs and the portion to be recovered from users; and revenue policy to ensure reliability and sufficiency of City revenues to support its operations. Major Initiatives Numerous major projects were completed during the year. The Van Wezel Performing Arts Hall capital improvements included the renovations of restrooms, replacement of carpeting and a new orchestra shell. The overlook platforms behind the Van Wezel were replaced. The wooden walkway from the Van Wezel to GWIZ was replaced. Completion of the Downtown Alley LID project provides treatment of the pollutants entering the storm inlets in the alleyways that are slated for resurfacing. Design, permitting, construction and monitoring for the restoration and stabilization of Lido Beach for the damage incurred by Tropical Storm Debby. Sand from New Pass shoal was delivered via pipeline to the beach, replacing 1.8 miles of beach. Structural repairs to dock and pilings at Harts Landing were completed. iii

12 The Utilities Department replaced the old 10 th St. water tank with a new 2 million gallon water storage tank to store raw water from Verna Well Field before treatment and blending with the Reverse Osmosis water to provide potable drinking water. A Deep Well Injection Well System was constructed. This well provides a means to dispose of unusable portions of the raw water supply as well as excess wastewater treatment effluent during wet weather discharge. Bird Key Sub-Aqueous Crossing project provided pipes to convey potable water beneath the canals on Bird Key, replacing the existing bridge crossings which were exposed to hazards from traffic. Lift Station #89 at the Van Wezel Performing Art Hall was rebuilt increasing the size of the pumps and pipes providing a higher level of reliability. During fiscal year 2015 an impressive 46 single-family foreclosed single-family homes were acquired and renovated and 141 units in multi-family complexes were redeveloped and made available as rentals using Neighborhood Stabilization Program II Grant funds. Home Initiatives Partnership (HOME) funds provided rental assistance to 14 young persons who graduated from foster care, enabling them to continue their education. There were 3 foreclosed single-family homes renovated and a fourth home constructed on a vacant lot utilizing HOME and State Housing Initiatives Partnership (SHIP) funds. Seventeen first-time homebuyers received SHIP assistance for a down payment on their home. There were six low-income youths who participated in a summer work program at the Robert L. Taylor Community Center. These youths not only worked as counselors-in-training, but also benefited from Life Skills classes. Community Development Block Grant (CDBG) funds were utilized in connection with the City s Homeless Outreach Team, including the salary for an additional counselor. CDBG funds were also used for providing 71 low to moderate income homeowners with housing assistance for emergency repairs and rehabilitation work. Construction of the State Street Parking Garage, located at the corner of State St. and Lemon Ave., was completed in April The Public Garage has 400 parking spaces, and sq. ft. of retail. The first business, a high-end automobile dealership, opened on the ground floor. Neighborhood and Development Services Department experienced an all-time record year, surpassing last year in the number of building permits issued at 8,401 permits. The number of permits issued this year increased 16 percent over the previous year, with a total construction valuation of $330 million. Independent Audit The City Charter, Article IV, Section 9, requires an annual audit of the City s financial statements by independent accountants selected by the City Commission. This requirement has been complied with and the independent auditors report is included in the financial section of this report. Certificate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded for Certificate of Achievement for Excellence in Financial Reporting to the City of Sarasota, Florida, for its Comprehensive Annual Financial Report for the fiscal year ending September 30, This was the thirty fourth consecutive year that the City has received this prestigious award. We are pleased to continue to achieve this distinction. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to meet the Certificate of Achievement Program s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. iv

13 Award for Distinguished Budget The City received the GFOA s Award for Distinguished Budget Presentation for its annual financial plan for the fiscal year beginning October 1, 2014, the same period covered by this Comprehensive Annual Financial Report. This was the twenty fifth consecutive year that the City has received this prestigious award. In order to qualify for the Distinguished Budget Presentation Award, the City s budget document was judged to be proficient in several categories including policy documentation, financial planning, organization, and as a communications medium. We are pleased that we continue to achieve this distinction. Award for Popular Annual Financial Report The City received the GFOA s Award for Outstanding Achievement in Popular Annual Financial Reporting (PAFR) for its annual financial report for the fiscal year ended September 20, This was the second year the City has received this prestigious award. In order to qualify for the award for Outstanding Achievement in Popular Annual Financial Reporting, the City s PAFR was judged to be proficient in several categories, including creativity, presentation, reader appeal, understandability, and distribution. Of the 400 governmental bodies in the State of Florida, Sarasota is one of just 21 agencies to receive all three GFOA awards, the Trifecta. We are committed to continually provide the citizens of Sarasota with accurate and transparent financial information. Acknowledgements This report represents countless hours of preparation and could not have been accomplished without the dedicated efforts of the employees of the Financial Administration Department. In closing, the continued interest and support by the Mayor and the members of the City Commission in the planning and guidance of the financial operations of the City is appreciated. Sincerely, John C. Lege III, CGFO, CPFO Finance Director Thomas W. Barwin City Manager v

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15 LISTING OF CITY OFFICIALS ELECTED OFFICIALS Willie C. Shaw... Mayor Suzanne Atwell... Vice-Mayor Liz Alpert... Commissioner Susan L. Chapman... Commissioner Shelli Freeland Eddie... Commissioner APPOINTED OFFICIALS Thomas W. Barwin... City Manager Pamela M. Nadalini... City Auditor and Clerk Robert M. Fournier, Esq.... City Attorney DEPARTMENT DIRECTORS Marlon C.J. Brown... Deputy City Manager Mary R. Bensel... Executive Director Van Wezel Performing Arts Hall Bernadette A. DiPino... Chief of Police Herminio Rodriquez... Director of Information Technology Doug A. Jeffcoat... Director of Public Works John C. Lege III... Finance Director Timothy D. Litchet... Director of Neighborhood & Development Services Stacie L. Mason... Director of Human Resources Russell M. Tidwell... Director of Utilities vii

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17 INDEPENDENT AUDITORS REPORT The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Sarasota, Florida (the City) as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We 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

18 The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida INDEPENDENT AUDITORS REPORT (Continued) Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of September 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the general fund, the penny sales tax fund, the community redevelopment agency fund, and the housing and community development fund, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, during the current year the City adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 71, Pension Transition for Contributions made Subsequent to the Measurement Date. These statements require for the first time, that employers participating in defined benefit pension plans, report the net pension liability and related deferred inflows/outflows related to those plans, on their statements of net position. In connection with the implementation of these statements, the City decreased its beginning net position in governmental activities by $88,092,211 and in business-type activities by $21,846,618. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis and required supplementary information as listed in the table of contents (collectively, the required supplementary information) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City s basic financial statements. The introductory section, combining and individual fund statements and schedules, schedule of receipts and expenditures of funds related to the deepwater horizon oil spill, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and Chapter , Rules of the Auditor General of the State of Florida, and is also not a required part of the basic financial statements. 2

19 The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida Other Matters (Concluded) INDEPENDENT AUDITORS REPORT (Concluded) Other Information (Concluded) The combining and individual fund statements and schedules, the schedule of receipts and expenditures of funds related to the Deepwater Horizon oil spill, and schedules and the schedule of expenditures of federal awards and state financial assistance are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements and schedules, the schedule of receipts and expenditures of funds related to the Deepwater Horizon oil spill, and the schedule of expenditures of federal awards and state financial assistance are fairly stated in all material respects in relation to the basic financial statements as a whole. 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 15, 2016, on our consideration of the City s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City s internal control over financial reporting and compliance. March 15, 2016 Sarasota, Florida 3

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21 Management s Discussion and Analysis This section of the City of Sarasota s Comprehensive Annual Financial Report provides a narrative overview and analysis of the basic financial activities of the City as of and for the year ended September 30, The intent of the information presented here, in conjunction with the Letter of Transmittal, is to provide the reader with a clearer picture of the City s overall financial status. Financial Highlights The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $356,101,282 (net position). Of this amount, $312,123,071 represents net investment in capital assets (capital assets net of related debt); $69,136,499 is restricted for specific purposes (restricted net position) and the remaining portion represents negative unrestricted net position of $(25,158,288). The government s total net position increased by $18,517,877, or 5.5 percent for the year. Total revenues increased $18,577,006, or 12.8 percent in comparison to the prior year. Total expenses increased $7,641,568, or 5.6 percent in comparison to the prior year. As of the close of the current fiscal year, the City s governmental funds reported combined ending fund balances of $82,854,591, a decrease of $443,240 for the year. At the end of the current fiscal year, unassigned fund balance for the General Fund was $16,530,893 or 30.1 percent of total General Fund expenditures. The City implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date in the current year. Beginning balances for fiscal year 2015 were restated to reflect the impact. The City s net pension liability of $109,938,829 and pension related deferred outflows of $17,196,148 net to $92,742,681. This amount was allocated to governmental activities ($73,647,427) and business type activities ($19,095,254) and reduced their beginning unrestricted net positions. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City s basic financial statements. The City s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) notes to the financial statements, and 3) fund financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements The focus of the government-wide financial statements is on the overall financial position and activities of the City of Sarasota. Reporting is similar to that of a private-sector business. The City s government-wide financial statements include the statement of net position and statement of activities. As described below, these statements do not include the City s fiduciary funds because resources of these funds cannot be used to finance the City s activities. However, the financial statements of fiduciary funds are included in the City s fund financial statements because the City is financially accountable for those resources, even though they belong to other parties. The statement of net position presents information on all of the City s assets, liabilities, and deferred inflows/outflows of resources with the net of these amounts reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. 5

22 Management s Discussion and Analysis September 30, 2015 The statement of activities presents revenue and expenses and shows how the government s net position changed during the most recent fiscal year. All changes in net position are reported in a manner similar to the approach used by a private-sector business in that revenues are recognized when earned or established criteria are satisfied and expenses are reported when incurred. Accordingly, revenues are reported even when they may not be collected for several months after the end of the accounting period and expenses are recorded even though they may not have used cash during the current period. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, physical environment, transportation, culture and recreation, and economic environment. The business-type activities of the City include the water and sewer utility, the Van Wezel Performing Arts Hall, solid waste collection, golf courses, auditoriums, and parking system. The City s government-wide financial statements can be found on pages of this report. Fund Financial Statements Unlike government-wide financial statements, the focus of fund financial statements is directed to specific activities of the City rather than the City as a whole. Except for the General Fund, separate funds are established 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, and fiduciary funds. Governmental funds Governmental fund financial statements consist of a balance sheet and a statement of revenues, expenditures, and changes in fund balances. These statements are prepared on an accounting basis that is significantly different from that used to prepare the government-wide financial statements. In general, these financial statements have a short-term emphasis and, for the most part, measure and account for cash and other assets that can easily be converted to cash. For example, amounts reported on the balance sheet include items such as cash and receivables collectible within a short period of time, but do not include capital assets such as land and buildings. Fund liabilities include amounts that are to be paid within a short period after the end of the fiscal year. The difference between a fund s total assets plus deferred outflows of resources less total liabilities and deferred inflows of resources is labeled as the fund balance, and generally indicates the amount that can be used to finance the next fiscal year s activities. The statement of revenues, expenditures and changes in fund balances for governmental funds reports only those revenues and expenditures that were collected or paid during the current period or very shortly after the end of the year. For the most part, the balances and activities accounted for in the governmental funds are also reported in the governmental activities columns of the government-wide financial statements. However, because of the difference in accounting basis used to prepare fund financial statements and government-wide financial statements, there are often significant differences between the totals presented. For this reason, there is a reconciliation after the balance sheet that reconciles the total fund balances to the net position presented in the governmental activities column on the statement of net position. Also, there is a reconciliation after the statement of revenues, expenditures, and changes in fund balances that reconciles the total change in fund balances for all governmental funds to the change in net position as reported in the governmental activities column in the statement of activities. The City presents in separate columns funds that are most significant to the City (major funds) and all other governmental funds are aggregated and reported in a single column (nonmajor funds). The City s governmental fund financial statements are presented on pages

23 Management s Discussion and Analysis September 30, 2015 Proprietary funds Proprietary fund financial statements consist of a statement of net position, statement of revenues, expenses, and changes in fund net position and statement of cash flows. These statements are prepared on an accounting basis that is similar to the basis used to prepare the government-wide financial statements. For financial reporting purposes, proprietary funds are grouped into enterprise funds and internal service funds. 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 utility, performing arts hall, solid waste collection, golf course, auditoriums, and parking system. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City s various functions. The City uses separate internal service funds to account for its fleet maintenance activities, management information systems, benefits and self-insurance programs, and its equipment replacement activities. Because all of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary fund financial statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the major enterprise funds, which are Water and Sewer, Van Wezel Performing Arts Hall and Solid Waste Collection. The remaining nonmajor enterprise funds are combined and presented as other funds on the proprietary funds financial statements. All internal service funds are considered to be nonmajor funds and are combined into a single, aggregated presentation in the proprietary fund financial statements. The proprietary fund financial statements can be found on pages of this report. Fiduciary funds Fiduciary fund financial statements consist of a statement of fiduciary net position and a statement of changes in fiduciary net position. Assets held by the City for other parties, either as a trustee or as an agent, and that cannot be used to finance the City s own operating programs, are reported in the fiduciary funds. 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 used for fiduciary funds is much like that used for proprietary funds. The fiduciary fund financial statements can be found on pages of this report. Component Units Discretely presented component unit financial statements can be found on pages of this report. Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 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 progress in funding its obligation to provide pension and other post-employment benefits to its employees. Required supplementary information can be found on pages of this report. Budgetary comparison schedules for combining statements of nonmajor governmental, nonmajor enterprise, internal service, and fiduciary funds begin on page

24 Management s Discussion and Analysis September 30, 2015 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 and deferred outflows of resources exceeded liabilities by $356,101,282 at the close of the most recent fiscal year. The following schedule is a summary of the Statement of Net Position found on pages 22 and 23 of this report: City of Sarasota s Net Position Governmental Activities Business-type Activities Total * * * Current and other assets $ 110,033,854 $ 111,558,439 $ 82,828,711 $ 83,009,336 $ 192,862,565 $ 194,567,775 Capital assets, net of depreciation 212,522, ,067, ,413, ,719, ,935, ,786,694 Total assets 322,556, ,625, ,242, ,728, ,798, ,354,469 Total deferred outflows of resources 18,180,196 2,864 3,740, ,267 21,920, ,131 Current and other liabilities 20,397,712 21,144,224 16,634,793 16,560,026 37,032,505 37,704,250 Long-term liabilities outstanding 156,194,446 83,993,097 72,960,560 57,814, ,155, ,807,264 Total liabilities 176,592, ,137,321 89,595,353 74,374, ,187, ,511,514 Total deferred inflows of resources 7,861, ,568, ,430, Net position: Net investment in capital assets 160,348, ,951, ,774, ,855, ,123, ,806,803 Restricted 56,835,283 59,877,127 12,301,216 12,730,059 69,136,499 72,607,186 Unrestricted (60,901,080) 2,663,395 35,742,792 52,248,702 (25,158,288) 54,912,097 Total net position $ 156,282,565 $ 221,491,533 $ 199,818,717 $ 208,834,553 $ 356,101,282 $ 430,326,086 * 2014 amounts were not restated for the effects of GASB Statements No. 68 and 71 because it was not practical. At September 30, 2015, the City is able to report positive balances in all categories of net position except for the governmental activities unrestricted net position. The negative unrestricted net position for the governmental activities is due to the implementation of GASB Statement No. 68, Accounting and Financial Reporting of Pensions and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, in fiscal year 2015 which resulted in a beginning net position reduction of $73,647,427. The largest portion of the City s net position, $312,123,071, reflects its investment in capital assets (e.g., land, buildings, improvements, infrastructure and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City s investment in its capital assets is reported net of related debt, it should still be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 8

25 Management s Discussion and Analysis September 30, 2015 A portion of the City s net position, $69,136,499, represents resources that are subject to external restrictions on how they may be used. Of the total net position at September 30, 2015, a deficit amount of $25,158,288 represents unrestricted net position (a negative amount of $60,901,080 for governmental activities and a positive amount of $35,742,792 for business-type activities). Net Position There are three major components of GASB Statement No. 68, Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date that affect the Statement of Net Position for the governmental activities, business-type activities, and proprietary funds: Deferred outflows of resources for pensions - consist of differences between expected and actual experience of the total pension liability, assumption changes, and 2015 fiscal year pension contributions that are deferred to the 2016 fiscal year because the net pension liability is one year in arrears. Net pension liability represents the difference between the total pension liability of the pension plans and fiduciary net position for the General Employees, Police Officers and Firefighters Defined Benefit Pension Plans as of September 30, Deferred inflows of resources for pensions is the net difference between expected and actual earnings on pension plan investments and the net difference between expected and actual experience of the total pension liability. From fiscal year 2014 to fiscal year 2015, the City s total net position decreased by $74,224,804, reflecting a $65,208,968 decrease in governmental activities and a $9,015,836 decrease in business-type activities. Notable changes in the Statement of Net Position between September 30, 2015 and 2014 are as follows: The City s net position decreased $92,742,681 ($73,647,427 for governmental activities and $19,095,254 for business type activities) due to a restatement of the fiscal year 2015 beginning net position in order to record the City s net pension liability and related deferred outflows of resources for pension contributions made during the prior year in accordance with GASB Statements No. 68 and 71. At September 30, 2015, deferred outflows of resources increased by $21,437,301 for a total of $21,920,432. This increase is primarily due to deferred pension outflows of $18,526,840. Deferred charges on debt refunded made up the balance of the increase ($2,910,461). Deferred inflows or resources increased by $9,430,176 from pension related deferred inflows. As of September 30, 2015, total long-term liabilities increased by $87,347,742, an increase of $72,201,349 in the governmental activities and an increase of $15,146,393 in the business-type activities. The increase is primarily from the recording of the City s net pension liability of $75,782,206 in the governmental activities and $20,134,554 in the business-type activities for a total net pension liability of $95,916,760. The increase from the net pension liability was offset by repayments of long term debt of $9,988,781. After the restatement of net position due to the implementation of GASB Statements No. 68 and 71, the City s total net position increased by $18,517,877, reflecting a $8,438,459 increase in governmental activities and a $10,079,418 increase in business-type activities. An analysis of the increases will be discussed on the following pages. 9

26 Management s Discussion and Analysis September 30, 2015 The following is a summary of the information presented in the Statement of Activities found on pages 24 and 25 of this report: City of Sarasota s Changes in Net Position Governmental Activities Business-type Activities Total Revenues: Program Revenues: Charges for services $ 10,758,662 $ 7,636,219 $ 67,656,566 $ 62,732,029 $ 78,415,228 $ 70,368,248 Operating grants and contributions 10,941,476 7,949, , ,987 11,893,088 8,546,467 Capital grants and contributions 9,010,585 7,053, ,010,585 7,053,950 General Revenues: Property taxes 26,527,993 25,269, ,527,993 25,269,921 Other taxes 25,368,425 24,177, ,368,425 24,177,433 Other 11,613,993 9,070, , ,532 12,340,140 9,562,434 Total revenues 94,221,134 81,157,905 69,334,325 63,820, ,555, ,978,453 Expenses: Governmental Activities: General government 10,178,446 15,959, ,178,446 15,959,585 Public safety 35,030,117 41,197, ,030,117 41,197,141 Physical environment 7,906,172 3,534, ,906,172 3,534,031 Transportation 11,549,091 7,230, ,549,091 7,230,305 Culture & recreation 3,499,422 3,503, ,499,422 3,503,809 Economic environment 4,417,493 4,923, ,417,493 4,923,941 Interest on long-term debt 3,789,069 3,908, ,789,069 3,908,368 Business-type Activities: Water and Sewer ,023,887 32,303,663 43,023,887 32,303,663 Van Wezel Performing Arts Hall ,058,586 10,305,552 11,058,586 10,305,552 Solid Waste ,790,922 9,774,612 9,790,922 9,774,612 Other ,794,377 4,755,007 4,794,377 4,755,007 Total expenses 76,369,810 80,257,180 68,667,772 57,138, ,037, ,396,014 Increase (decrease) in net position before other items 17,851, , ,553 6,681,714 18,517,877 7,582,439 Transfers (9,412,865) 135,244 9,412,865 (135,244) Increase (decrease) in net position 8,438,459 1,035,969 10,079,418 6,546,470 18,517,877 7,582,439 Net position - beg. of year, restated 147,844, ,455, ,739, ,288, ,583, ,743,647 Net position - end of year $ 156,282,565 $ 221,491,533 $ 199,818,717 $ 208,834,553 $ 356,101,282 $ 430,326,086 * 2014 amounts were not restated for the effects of GASB Statements No. 68 and 71 because it was not practical. 10

27 Management s Discussion and Analysis September 30, 2015 Governmental Activities Total revenues for governmental activities increased $13,063,229 or 16.1% when compared to the prior year. The increase in revenues for the current year is the result of the following: Charges for services increased by $3,122,443 compared to the prior year. Most of this was from a $2,087,160 increase in building permits and inspections. The City issued a record number of building permits for 2015, processing 8,402 permits valued at $330.6 million. Operating grants and contributions increased by $2,991,996 from that reported in the prior year. Revenues for the Lido Beach renourishment project accounted for an increase of $3,964,935. This revenue came from the Federal Emergency Management Agency, the Florida Department of Environmental Protection, and Tourist Development Taxes to replace sand that was lost during Tropical Storm Debby in This increase was offset by a decrease of $799,334 in revenues from the HUD Community Development Block Grant Program (CDBG). Two large projects did not progress as planned, so with no expenses to be reimbursed, revenues were down for the CDBG Program. Capital grants and contributions increased $1,956,635. Capital grants fluctuate between fiscal years depending on the availability of grant funding and the need for capital improvements. The current year increase includes $3,542,500 of road impact fees from Sarasota County for right-of-way acquisition and construction of two roundabouts at 10 th Street and 14 th Street on US 41. Property tax revenue increased $1,258,072, a 5.0% increase over the previous year. The increase is the result of the City s assessed values rising 5.35% over last year even though the millage rate for the current year decreased from to mills. The following graph shows the composition of revenues for the City s governmental activities: Revenues by Source - Governmental Activities Operating grants and contributions 11.61% Charges for services 11.42% Capital grants and contributions 9.56% Other 7.27% Franchise fees 5.06% Other taxes 3.58% Public service taxes 10.81% Sales tax 12.53% Property taxes 28.16% Total expenses for governmental activities decreased $3,887,370 or 4.8% in comparison to the prior year. The decrease in current year expenses is attributed to: General government expenses decreased by $5,781,139 compared to the prior year. $3,903,931 of the decrease was attributed to a reduction in funding for Other Post-Employment Benefits (OPEB). Annual OPEB costs for the OPEB Trust Fund decreased from $12,201,000 in 2014 to $3,958,326 in The decrease is due to plan design changes, new rates for dependent coverage and the 11

28 Management s Discussion and Analysis September 30, 2015 adoption of a formal funding policy committing the City to make deposits into the trust fund for the full amount of the actuarially determined contribution. Operating losses from the Internal Service Funds decreased $1,059,251 from the loss that was reported in the previous year for general government expenses. The loss results from undercharging internal customers for services provided by the Internal Service Funds. $1,029,326 of the loss is attributed to costs from the self-insured employee medical and dental program. Public safety expenses decreased by $6,167,024. $4,533,981 of this decrease was due to a reduction of pension expense from the effects of implementing GASB Statements No. 68 and 71. Physical environment expenses increased by $4,372,141 for the 2015 year. Most of this increase, $3,929,661, was to renourish Lido Beach for storm damage. Transportation expenses increased by $4,318,786 from what was reported in the prior year. Accounting for $3,525,000 of the increase was a payment to the Florida Department of Transportation for right-of-way acquisition for the construction of two roundabouts at 10 th Street and 14 th Street on US 41. The State Street Parking Garage was transferred to the Parking Management Enterprise Fund as a capital contribution of $9,637,286. The following chart compares expenses with program revenues for the City s governmental activities: Expenses and Program Revenues - Governmental Activities (in thousands) $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 General government Public safety Physical environment Transportation Culture and recreation Economic environment Interest on long-term debt expenses program revenues Business-type Activities Total revenues increased by $5,513,777 for the current year. $3,201,087 of the increase was attributed to a 6% rate increase in the water and sewer utility. Revenues also increased $1,403,687 at the Van Wezel Performing Arts Hall, where grants, ticket sales and associated charges accounted for most of the increase. 12

29 Management s Discussion and Analysis September 30, 2015 Total expenses increased by $11,528,938, or 20.2% from the prior year. The Water and Sewer Fund accounted for $10,720,224 of the increase. Most of this, $10,289,948, was for the write off of $10,289,948 for the impairment of Lift Station No. 87. The Van Wezel Performing Arts Hall Fund made up the balance with a $753,034 increase in expenses over that which was reported for The following graph shows the composition of revenues for the City s business-type activities: Revenues by Source - Business-type Activities Charges for services 97.58% Other 1.05% Operating grants and contributions 1.37% The following chart compares expenses with program revenues for the City s business-type activities: Expenses and Program Revenues - Business-type Activities (in thousands) $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Water & Sewer Van Wezel Performing Arts Hall Solid Waste Other funds expenses program revenues 13

30 Management s Discussion and Analysis September 30, 2015 Financial Analysis of the City s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds The fund financial statements for the governmental funds are provided on pages The focus of the City s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City s governmental funds reported combined ending fund balances of $82,854,591 a decrease of $443,240 for the year. Approximately 19.8% of this amount ($16,406,941) constitutes unassigned fund balance, which is available for spending at the City s discretion subject to budgetary constraints, legal, or other requirements. The remainder of fund balance is nonspendable, restricted, committed or assigned to indicate that it is not available for new spending. Significant restrictions include: 1) restricted for infrastructure improvements ($23,629,922), 2) restricted for community redevelopment ($7,686,562), 3) restricted for transportation ($7,094,135), and 4) restricted for debt service ($5,191,178). The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was $16,530,893, while total fund balance was $22,492,067. As a measure of the General Fund s liquidity, it may be useful to compare unassigned fund balance to total fund expenditures. Unassigned fund balance represents 30.1% (or 3.6 months) of total General Fund expenditures. Revenues and transfers in for the City s General Fund increased by $3,278,848 since the prior year. While revenues increased, expenditures and transfers out decreased by $3,471,659. Key factors for the revenue increases and expenditure decreases are: The General Fund s property tax rate of mills remained unchanged from the 2014 fiscal year rate. Even though the millage rate did not change, ad valorem taxes increased $980,930 due to a $385 million increase in assessed value of property subject to tax. Miscellaneous income for 2015 was $2,219,382 higher than the previous year. Most of the increase was from the $2,116,721 received from proceeds of the BP Oil Settlement. General government expenditures decreased $3,778,021 for the current year. $3,770,300 of the decrease was attributed to the General Fund s reduction in funding to the Other Post-Employment Benefits (OPEB) Trust Fund. Changes to the City s OPEB program, approved by the City Commission on October 20, 2014, have drastically reduced the City s OPEB costs. The Penny Sales Tax Fund accounts for the revenue from the one-cent local option sales surtax. This fund has a fund balance of $23,629,922. The net increase in fund balance for the year was $1,028,007. Expenditures for the current year totaled $5,440,233, which included the following capital improvement projects: Street reconstruction $1,757,279 Old Bradenton Road improvements 1,853,150 Parks and recreation improvements 311,501 Construct new sidewalks 293,726 Harts Landing renovation 188,852 14

31 Management s Discussion and Analysis September 30, 2015 Police communications equipment 150,000 Myrtle Street stormwater improvements 150,000 Payne Park/Municipal Auditoriums HVAC 111,934 Alderman MURT 98,217 Ringling / Orange Avenue roundabout 97,360 Other miscellaneous projects 428,214 The Community Redevelopment Agency Fund accounts for the operations of the City of Sarasota Community Redevelopment Agency (CRA). Total revenues increased by $2,210,551 over that reported last year. The primary reasons for this increase were a $271,058 increase in ad valorem taxes, a $252,510 increase in intergovernmental revenues from Sarasota County and the sale of retail space in the State Street Parking Garage for $1,661,911. Taxable value of property in the redevelopment area increased by $76.3 million or 4.3% from the prior year. Investment earnings increased by $40,365 to $134,796 for the current year compared to the $94,431 reported last year. Expenditures of $10,508,320 and transfers out of $5,939,002 included the following: State Street Parking Garage $8,863,145 Main Street Orange Avenue roundabout 887,167 First Street US 41 to Pineapple 165,060 Dr. Martin Luther King Way streetscape improvements 137,766 Newtown entrance plazas 97,325 Salvation Army street teams 80,000 Developer infrastructure incentives 74,651 CRA legal fees 63,116 Contribution for Economic Development Coordinator 42,024 Other miscellaneous project costs and events 98,066 Transfers out: 5,939,002 o Debt service payments on bonds and loans $3,322,256 o General Fund Police services 1,003,340 o General Fund Landscape services 803,002 o General Fund Redevelopment office costs 725,404 o Robert L. Taylor Community Complex 85,000 The Community Redevelopment Agency Special Revenue Fund has a fund balance of $7,686,562 as of September 30, 2015, which is reserved for the remaining outstanding debt obligations and the specific projects identified and approved in the CRA s annual budget. The Housing & Community Development Fund administers Federal housing and community development programs both in the City and County. Total revenues decreased $1,359,337 with a corresponding decrease in expenditures. The decrease is due to two large projects not progressing as planned. Proprietary funds The fund financial statements for the City s proprietary funds provide essentially the same type of information found in the government-wide financial statements, but in more detail. The following are noteworthy changes from the prior year: Operating revenues of the Water and Sewer Fund increased $3,201,087 for the current year, mainly as a result of a six percent rate increase. Operating expenses only increased $400,425. Pension expenses for the current year were reduced $663,615 by the impact of implementing GASB Statements No. 68 and 71. Without this adjustment, expenses would have increased $1,064,040, mainly due to an increase of $776,563 in depreciation expense for capital assets. The current year included a $10,241,470 loss on the disposition of capital assets. Most of this was for the write off of $10,289,948 for the impairment of Lift Station No. 87 with gains on dispositions offsetting against the loss. 15

32 Management s Discussion and Analysis September 30, 2015 Operating revenues for the Van Wezel Performing Arts Hall increased by $1,403,687 for the current year. Most of the increase was due to a $1,175,597 increase in ticket sales and ticket handling charges. Operating expenses increased $753,034 over that reported in the previous year. Of this increase, $683,903 was from higher performance fess and associated costs incurred to generate the increase in ticket sales. The Solid Waste Fund saw an operating revenue increase of $277,825 for the current year. Operating expenses increased slightly by $16,292. Personal services decreased $164,361, with a reduction in OPEB costs accounting for $148,208 of the decrease in the current year. Contractual services increased $147,769, with recycling and landfill charges being $116,702 of the increase. Other factors concerning the finances of the proprietary funds have been addressed in the discussion of the City s business-type activities. General Fund Budgetary Highlights Overall the General Fund revenue budget was increased by $191,809. This amount includes an increase of $44,547 for various donations, an increase of $60,000 in right-of-way permits and $87,262 of grant funding for the Police marine patrol. The General Fund expenditure budget increased for the year by $465,620. The difference between the original expenditures budget and the final amended budget are summarized as follows: $60,000 increase for construction right-of-way mitigation; $39,135 increase for an accreditation manager in the Police department; $24,000 increase for the Downtown Ambassador Program; $21,767 increase for additional administrative support in the Building department; $15,000 increase for additional election expenditures; $12,000 increase for homelessness response; $4,114 increase for risk management software; $3,433 increase for youth programs at the Robert L. Taylor Community Complex; $1,000 increase to promote safe boating; and $285,171 increase for re-appropriation of projects that were budgeted in the previous fiscal year but not completed. Those projects included the following: o $93,603 for painting the Police building; o $83,100 for repairs at City Hall; and o $108,468 for various other projects. Actual revenues and transfers in were greater than final budget by $3,507,121 and actual expenditures and transfers out were less than budgeted expenditures by a total of $1,858,863. This resulted in a positive budget variance of $5,365,984. Most of this savings was achieved by unanticipated revenues and the diligent efforts to control costs at all levels of management. Both the original and final budget anticipated $282,440 and $556,251, respectively, to be expended from available fund balance. However, revenues were greater than budgetary estimates and expenditures were less than budgetary estimates as discussed above. This resulted in a positive change in fund balance of $4,809,733, $5,365,984 greater than was anticipated by the final budget. Capital Asset and Debt Administration Capital Assets The City s investment in capital assets for its governmental and business-type activities as of September 30, 2015, is $416,935,972 (net of accumulated depreciation). This investment in capital assets includes land, art collections, construction in progress, buildings, improvements, infrastructure, utility systems and equipment. The total increase (additions less retirements and depreciation) in the City s investment in capital 16

33 Management s Discussion and Analysis September 30, 2015 assets for the current fiscal year was 0.5% (a 1.2% decrease for governmental activities and a 2.4% increase for business-type activities). The schedule below reflects the City s capital assets as of September 30, 2015 and 2014: City of Sarasota s Capital Assets (Net of Depreciation) Governmental Activities Business-type Activities Total Land $ 40,480,911 $ 40,480,911 $ 12,252,113 $ 12,252,113 $ 52,733,024 $ 52,733,024 Art collections 892, , , ,297 1,111,670 1,097,270 Buildings 55,731,411 56,292,602 36,136,289 27,576,977 91,867,700 83,869,579 Improvements and Infrastructure 103,629,123 97,230,448 5,154,419 5,190, ,783, ,420,531 Utility systems ,108, ,915, ,108, ,915,320 Equipment 6,475,891 6,438,899 4,603,794 4,207,352 11,079,685 10,646,251 Construction in progress 5,312,564 13,746,718 22,939,731 41,358,001 28,252,295 55,104,719 Total $ 212,522,273 $ 215,067,551 $ 204,413,699 $ 199,719,143 $ 416,935,972 $ 414,786,694 Additional information on the City s capital assets can be found in Note 6 on pages of this report. Major capital asset activity during the current fiscal year included the following: Various system additions and improvements were completed in the Water and Sewer Fund at a cost of $18,783,429 and construction began on others at a cost of $6,379,553. The construction of the State Street Parking Garage was completed during the year. The total amount expended on the structure since construction began was $11,299,197. The sale of the retail space on the ground level facing State Street was sold resulting in sales proceeds of $1,661,911. The cost basis of the garage was reduced by this amount. The garage was subsequently transferred to the Parking Management Enterprise Fund as a capital contribution of $9,637,286. The Water and Sewer Fund wrote off $10,289,948 for the Lift Station 87 project to Loss on the Disposition of Capital Assets. Long-term debt At the end of the current fiscal year, the City had total bonded debt outstanding of $118,560,068. Of this amount, $38,798,446 comprises debt backed by the full faith and credit of the City. The remainder of the City s debt represents bonds secured solely by specified revenue sources (i.e., special obligation bonds, revenue bonds). The schedule below reflects the City s outstanding debt as of September 30, 2015 and 2014: 17

34 Management s Discussion and Analysis September 30, 2015 City of Sarasota s Outstanding Debt and Loans Payable Governmental Activities Business-type Activities Total General obligation bonds $ 38,798,446 $ 40,701,396 $ -- $ -- $ 38,798,446 $ 40,701,396 Special obligation bonds 24,791,622 28,479, ,791,622 28,479,704 Revenue bonds ,030,000 57,745,000 54,030,000 57,745,000 Total bonds 63,590,068 69,181,100 54,030,000 57,745, ,620, ,926,100 Loans payable 940,000 1,955, ,000 1,955,000 Total bonds & loans $ 64,530,068 $ 71,136,100 $ 54,030,000 $ 57,745,000 $ 118,560,068 $ 128,881,100 The City s total debt decreased by $10,321,032 or 8.0 %. The key factors in this decrease were: Scheduled principal payments of $9,613,781 were paid when due. Refunded debt was $1,060,000 less than the originally issued debt The accreted value increased $352,749 on capital appreciation bonds. Many of the bonds issued by the City are insured by a financial guaranty insurance policy. Certain rating agencies have assigned not only an insured rating but an underlying rating to the City s outstanding debt. During the year, Fitch Ratings upgraded the City s water and sewer bonds from AA- to AA. The underlying bond ratings continue to reflect that the City s bonds have the characteristics of strong investment quality as shown below: Moody s Standard Investors Fitch & Poor s Service Ratings General Obligation ** Aa2 AA+ Special Obligation ** Aa3 AA Water and Sewer ** Aa2 AA ** Not rated Standard and Poors Rating Services ( S&P ), Moody s Investors Service ( Moody s ), and Fitch Ratings ( Fitch ) have withdrawn their ratings related to Ambac. Ambac insures the First Florida Governmental Financing Commission (FFGFC) Revenue Bonds, Series 2001B, 2003 and 2005 issued by First Florida Governmental Financing Commission. The FFGFC Bond proceeds were used in part to make loans to the City of Sarasota, Florida. Additional information on the City s long-term debt can be found in Note 7 on pages of this report. Economic Factors and Next Year s Budget and Rates The budget for the 2016 fiscal year was balanced with the use of $272,497 from Revenue Stabilization Funds. This was the result of the strong economy and the City s efforts over the past several years to contain and control expenditures. The positive year-end results for the 2015 fiscal year provide good news but also warrants caution as staff begins development of the 2017 fiscal year budget. The City is faced with balancing strong growth in some revenue categories against others that can be highly volatile with significant fluctuations through economic cycles. As such, a thoughtful and disciplined approach to budgeting and spending is necessary. Factors considered in preparing the City s 2016 fiscal year budget were: The taxable value of commercial and residential property increased 6.05% from last year s valuation. The $369 million increase in taxable value for 2016 is the fourth consecutive year that property values have increased. 18

35 Management s Discussion and Analysis September 30, 2015 No adjustment was made to the General Fund property tax rate of mills. Since the property valuation for the 2016 fiscal year increased, property tax revenue will increase $1,179,808. The City s population changed slightly from 52,584 reported in 2014 to 52,905 for The City of Sarasota unemployment rate for September 2015 was 4.4%, a significant decrease from the 5.4% rate reported in September The Sarasota County unemployment rate for September 2015 was 5.0%, a decrease of.8% from the 5.8% rate reported in September 2014 and lower than the State and Federal rates (5.4% and 5.1% respectively). Requests for Information This financial report is designed to provide users with a general overview of the City of Sarasota s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, P.O. Box 1058, Sarasota, Florida or telephone (941) You can also access our website at 19

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37 Basic Financial Statements This part of the City of Sarasota s comprehensive annual financial report presents a minimum combination of financial statements and note disclosures required for fair presentation in conformity with Generally Accepted Accounting Principles (GAAP). Contents Page Government Wide Financial Statements The focus of the Government-Wide Financial Statements is on the overall financial position and activities of the City. These financial statements incorporate all of the City s governmental and business-type activities, as well as its nonfiduciary component units. There are two basic government-wide financial statements: the Statement of Net Position and the Statement of Activities Fund Financial Statements The focus of the Fund Financial Statements have a short-term emphasis and for the most part, measure and account for cash and other assets that can be easily converted to cash. The Governmental Fund Financial Statements consist of a Balance Sheet/Statement of Net Position, and a Statement of Revenues, Expenditures and Changes in Fund Balance/Net Position Component Unit Financial Statements Component Units are entities for which the City is considered to be financially accountable. In addition to the separate column in the Government-Wide Financial Statements, the Component Units Financial Statements include the Statement of Net Position and the Statement of Activities Notes to the Financial Statements The Notes to the Financial Statements are a presentation of information integral to the financial statements and essential to a user s understanding of City s financial position

38 Statement of Net Position September 30, 2015 Governmental Business-type Component Activities Activities Total Units Assets Cash and cash equivalents $ 22,894,417 $ 21,029,731 $ 43,924,148 $ 112,410 Investments 78,763,055 57,232, ,995, ,723 Receivables (net): Accounts 2,007,819 4,143,622 6,151, Interest 156, , , Notes 320, , Special assessments 267, , Internal balances 457,083 (457,083) Due from other governmental agencies 4,602,988 4,083 4,607,071 9 Inventories 172, , , Prepaid items 391, , , Capital assets: Non-depreciable 46,685,848 35,411,141 82,096,989 1,376 Depreciable (net) 165,836, ,002, ,838,983 1,416,982 Total assets 322,556, ,242, ,798,537 1,918,187 Deferred Outflows of Resources Non-pension: Deferred charge on refunding 2,995, ,263 3,393, Pension: Difference between expected and actual experience 21,301 18,799 40, Changes in assumptions 556, ,058 1,047, Contributions to the pension plan subsequent to the measurement date 14,607,161 2,832,116 17,439, Total deferred outflows of resources 18,180,196 3,740,236 21,920, The accompanying notes are an integral part of this statement. 22

39 Governmental Business-type Component Activities Activities Total Units Liabilities Accounts payable 5,103,750 3,137,288 8,241,038 10,810 Retainages payable 599, ,865 1,063, Liability for unpaid claims 2,657, ,657, Accrued interest payable 810,322 1,249,138 2,059, Due to other governmental agencies 123,488 12, , Accrued wages 1,125, ,223 1,597,546 1,175 Unearned revenue 1,186,096 6,350,650 7,536,746 1,692 Customer deposits 546,582 1,151,733 1,698, Noncurrent liabilities: Due within one year 8,245,001 3,797,021 12,042, Due in more than one year 156,194,446 72,960, ,155, Deferred Inflows of Resources Pension: Difference between expected and actual experience Net difference between projected and actual earnings on pension plan investments 7,861,001 1,568,576 9,429, Total deferred inflows of resources 7,861,600 1,568,576 9,430, Net Position Net investment in capital assets 160,348, ,774, ,123,071 1,418,358 Restricted for: Debt service 4,393,681 6,322,604 10,716, Construction 866,787 5,978,612 6,845, Community redevelopment 7,686, ,686, Infrastructure improvements 23,629, ,629, Housing and community development 2,421, ,421, Transportation 7,094, ,094, Building services 6,874, ,874, Law enforcement programs 493, , Tourist development 3,037, ,037, Grant programs 252, , Golden Gate Point streetscape 54, , Economic development 30, , Unrestricted (deficit) (60,901,080) 35,742,792 (25,158,288) 486,152 Total net position $ 156,282,565 $ 199,818,717 $ 356,101,282 $ 1,904,510 23

40 Statement of Activities For the Year Ended September 30, 2015 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities: General government $ 10,178,446 $ 1,635,077 $ -- $ 2,162 Public safety: Police 28,751,647 1,459,573 1,102, ,090 Fire 2,811, , Building inspections 3,012,398 6,024, Other public safety 454, , Physical environment 7,906,172 99,104 4,617, ,997 Transportation 11,549, , ,633 7,611,059 Culture and recreation 3,499, , , ,277 Economic environment 4,417, ,041, Interest and fiscal charges 3,789, , Total governmental activities 76,369,810 10,758,662 10,941,476 9,010,585 Business-type activities: Water and Sewer 43,023,887 42,844,313 (8,439) -- Van Wezel 11,058,586 10,757, , Solid Waste 9,790,922 10,549, Bobby Jones Golf Course 2,874,348 2,474, Municipal Auditoriums 503, , Parking Management 1,416, , Total business-type activities 68,667,772 67,656, , Total primary government $ 145,037,582 $ 78,415,228 $ 11,893,088 $ 9,010,585 Component Units: St. Armands Business Improvement District $ 151,177 $ -- $ -- $ -- Downtown Improvement District 383, Total component units $ 534,494 $ -- $ -- $ -- General revenues: Taxes: Property taxes Gasoline taxes Sales tax Public service taxes Occupational licenses Other taxes Franchise fees State revenue sharing, unrestricted Investment earnings Miscellaneous Gain on disposition of capital assets Transfers Total general revenues and transfers Change in net position Net position - beginning, as restated Net position - ending The accompanying notes are an integral part of this statement. 24

41 Net (Expense) Revenue and Changes in Net Position Governmental Business-type Component Activities Activities Total Units $ (8,541,207) $ -- $ (8,541,207) $ -- (25,803,334) -- (25,803,334) -- (2,603,895) -- (2,603,895) -- 3,011, ,011, (24,590) -- (24,590) -- (2,971,981) -- (2,971,981) -- (3,099,628) -- (3,099,628) -- (1,924,677) -- (1,924,677) -- (375,793) -- (375,793) -- (3,325,661) -- (3,325,661) -- (45,659,087) -- (45,659,087) (188,013) (188,013) , , , , (399,544) (399,544) (171,860) (171,860) (718,180) (718,180) (59,594) (59,594) -- (45,659,087) (59,594) (45,718,681) -- (151,177) (383,317) (534,494) 26,527, ,527, ,374 2,432, ,432, ,808, ,808, ,188, ,188, , , , , ,767, ,767, ,828, ,828, ,014, ,138 1,670,394 3,989 3,910, ,910,383 3,988 93,077 70, , (9,412,865) 9,412, ,097,546 10,139,012 64,236, ,351 8,438,459 10,079,418 18,517,877 51, ,844, ,739, ,583,405 1,852,653 $ 156,282,565 $ 199,818,717 $ 356,101,282 $ 1,904,510 25

42 Governmental Funds Balance Sheet September 30, 2015 Penny General Sales Tax Assets Cash and cash equivalents $ 4,672,021 $ 5,151,920 Investments 16,073,031 17,724,015 Receivables (net):. Accounts 1,923, Interest 34,656 29,596 Interfund 564, Notes Special assessments Due from other governmental agencies 1,319,084 1,119,497 Inventories 108, Prepaid items 365, Total assets $ 25,060,025 $ 24,025,028 Liabilities Liabilities: Accounts payable $ 926,101 $ 336,585 Accrued interest payable Retainages payable -- 58,521 Due to other funds Due to other governmental agencies 15, Interfund payables Advance from other funds Accrued wages 986, Unearned revenue 639, Customer deposits Total liabilities 2,567, ,106 Deferred Inflows of Resources Unavailable revenue - notes receivable Unavailable revenue - special assessments Total deferred inflows of resources Fund Balances Nonspendable: Inventory 108, Prepaid items 365, Restricted for: Infrastructure improvements -- 23,629,922 Community redevelopment Housing and community development Building services Transportation Law enforcement programs Golden Gate Point streetscape Tourist development Grant programs Economic development Debt service Construction Committed to: Revenue stabilization 1,997, Deep Horizon Oil Spill 2,116, Development application system Public art Neighborhood grant programs Citizens with disabilities Forestry Transportation Affordable housing Law enforcement Economic development Culture and recreation Assigned to: Subsequent year expenditures 753, Subsequent year budget deficit 272, Other purposes (encumbrances) 347, Unassigned 16,530, Total fund balances 22,492,067 23,629,922 Total liabilities, deferred inflows of resources, and fund balances $ 25,060,025 $ 24,025,028 The accompanying notes are an integral part of this statement. 26

43 Community Housing and Other Total Redevelopment Community Governmental Governmental Agency Development Funds Funds $ 2,085,326 $ 38,361 $ 7,001,977 $ 18,949,605 7,174, ,972 24,088,712 65,191, ,230 2,007,267 12, , , , ,468 37, , , , ,264 1,903,492 4,461, , , ,532 $ 9,272,232 $ 573,228 $ 33,429,214 $ 92,359,727 $ 1,108,876 $ 76,893 $ 2,268,680 $ 4,717, , , , ,663 5, , , ,907 41, , , ,179 72,168 1,074, , ,627 1,186, , ,582 1,585, ,760 3,576,535 8,415, ,468 37, , , , , , , , , , ,629,922 7,686, ,686, ,421,734 2,421, ,874,315 6,874, ,094,135 7,094, , , ,145 54, ,032,710 3,032, , , ,342 30, ,191,178 5,191, ,025,864 2,025, ,997, ,116, , , , , ,219 67, , , , , , , , , ,007 5, ,746 70, ,578 31, , , , , (123,952) 16,406,941 7,686, ,548,295 83,356,846 $ 9,272,232 $ 573,228 $ 33,429,214 $ 92,359,727 27

44 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position As of September 30, 2015 Fund balances - total governmental funds $ 82,854,591 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets $ 338,207,725 Less accumulated depreciation (129,857,960) 208,349,765 Other assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Prepaid bond insurance costs 198,291 Less accumulated amortization (192,294) 5,997 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the governmental funds. Accrued interest payable (810,093) General obligation bonds (38,798,446) Special obligation bonds (24,791,622) Loans payable (940,000) Other post-employment benefits (16,821,234) Unamortized bond premium (2,632,648) (84,794,043) Deferred outflow of resources are not reported in governmental funds. Unamortized loss on refunding 2,995,329 Deferred revenue in governmental funds is susceptible to full accrual on the entity-wide statements. Grants 507,358 Special assessments 267,235 Mortgages receivable 320,617 Interest subsidy on Build America Bonds received before interest payment was due 136,548 1,231,758 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net position of the internal service funds that are reported with governmental activities 12,246,600 Net pension liability and pension related deferred outflows and inflows of resources are not due in the current period and therefore are not reported in the governmental funds. Net pension liability (73,791,531) Deferred outflows of resources 14,890,616 Deferred inflows of resources (7,706,517) (66,607,432) Net position of governmental activities $ 156,282,565 The accompanying notes are an integral part of this statement. 28

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46 Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended September 30, 2015 Penny General Sales Tax Revenues Taxes $ 30,509,376 $ -- Franchise fees 4,767, Special assessments Licenses and permits 760, Intergovernmental 8,132,542 7,306,401 Charges for services 2,360, Charges to other funds 4,428, Fines and forfeits 912, Investment earnings 215, ,816 Miscellaneous 3,669,483 4,792 Total revenues 55,758,362 7,463,009 Expenditures Current: General government 13,848, Public safety 32,981, ,000 Physical environment 3,320,419 72,880 Transportation 3,281, ,279 Culture and recreation 1,481,746 32,064 Economic environment 65, Debt service: Principal payments Interest and fiscal charges Bond issuance costs Capital outlay -- 5,021,010 Total expenditures 54,979,461 5,440,233 Excess (deficiency) of revenues over (under) expenditures 778,901 2,022,776 Other financing sources (uses) Transfers in 4,814, ,000 Transfers out (783,673) (1,294,769) General obligation bonds Premium on general obligation bonds Payment to bond escrow agent Total other financing sources (uses) 4,030,832 (994,769) Net change in fund balances 4,809,733 1,028,007 Fund balances - beginning 17,682,334 22,601,915 Fund balances - ending $ 22,492,067 $ 23,629,922 The accompanying notes are an integral part of this statement. 30

47 Community Housing and Other Total Redevelopment Community Governmental Governmental Agency Development Funds Funds $ 3,862,363 $ -- $ 7,215,445 $ 41,587, ,767, , , ,996,209 6,756,920 3,928,580 2,384,477 9,047,648 30,799, ,018 3,162, ,428, ,333 1,377, ,796 27, , ,125 1,816,123 9, ,677 5,891,767 9,741,862 2,421,589 24,304,452 99,689, ,931 14,062, ,647,992 36,779, ,219,615 7,612,914 46, ,793,364 7,285, ,947 1,654, ,694 2,420,674 1,627,439 4,414, ,553,534 4,553,534 67, ,360,550 4,428, , ,794 10,092,695 1,262 2,397,692 17,512,659 10,508,320 2,421,936 25,225,858 98,575,808 (766,458) (347) (921,406) 1,113, ,447,978 10,562,830 (5,939,002) -- (2,316,683) (10,334,127) ,855,000 33,855, ,705,627 2,705, (38,346,036) (38,346,036) (5,939,002) 347 1,345,886 (1,556,706) (6,705,460) ,480 (443,240) 14,392, ,621,560 83,297,831 $ 7,686,562 $ -- $ 29,046,040 $ 82,854,591 31

48 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended September 30, 2015 Net change in fund balances - total governmental funds $ 59,015 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures, however, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives. Expenditures for capital assets $ 8,984,661 Less current year depreciation (9,116,425) (131,764) The net effect of the disposals of capital assets is to decrease net position. Book value of capital assets disposed (9,779) Capital assets acquired in prior year transferrred to the Parking Management Enterprise Fund in the current year (2,503,609) (2,513,388) Donations of capital assets increase net position in the statement of activities, but do not appear in the governmental funds because they are not financial resources. 274,170 The collection of special assessments and receipt of repayment of long-term receivables provides current financial resources. Neither transaction, however, has any effect on net position of governmental activities. Collection of special assessments (105,969) Receipts on mortgages receivable (85,696) (191,665) The issuance of long-term debt (e.g., notes, leases) provides current financial resources to governmental funds, while the repayment of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position of governmental activities. Bonds issued (33,855,000) Premium on bonds issued (2,705,627) Payment to refunded bond escrow agent 38,346,036 Interest included in payment to refunded bond escrow agent (578,382) 1,207,027 Repayment of long-term debt is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Principal repayments: General obligation bonds 1,167,950 Special obligation bonds 4,040,831 Loans payable 1,015,000 6,223,781 Some revenues and expenses reported in the statement of activities are not reported in the governmental funds because they have no effect on current financial resources Interest subsidy received before interest payment due (12,987) Accrued interest 180,289 Interest on capital appreciation bonds (352,749) Other post-employment benefits (272,027) (457,474) Governmental funds report the effect of bond insurance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Amortization of bond premium 96,639 Amortization of deferred loss on refunding (98,154) Amortization of current year bond insurance costs (7,281) (8,796) Changes to net pension liability and pension related deferred outflows and inflows of resources do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds 5,152,073 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net expense of the internal service funds is reported with governmental activities. (1,179,623) Change in net position of governmental activities $ 8,433,356 The accompanying notes are an integral part of this statement. 32

49 General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Positive Original Final Actual Amounts (Negative) Revenues Taxes $ 30,212,862 $ 30,212,862 $ 30,509,376 $ 296,514 Franchise fees 4,825,158 4,825,158 4,767,877 (57,281) Licenses and permits 391, , , ,119 Intergovernmental 8,247,534 8,247,534 8,132,542 (114,992) Charges for services 2,145,914 2,104,019 2,360, ,776 Charges to other funds 4,226,593 4,226,593 4,428, ,295 Fines and forfeits 682, , , ,722 Investment earnings 250, , ,943 (34,057) Miscellaneous 1,271,460 1,316,007 3,669,483 2,353,476 Total revenues 52,253,138 52,315,790 55,758,362 3,442,572 Expenditures Current: General government 14,000,429 14,050,426 13,848, ,765 Public safety 34,025,592 34,017,340 32,981,810 1,035,530 Physical environment 3,506,789 3,516,789 3,320, ,370 Transportation 3,349,213 3,349,213 3,281,776 67,437 Culture and recreation 1,612,515 1,624,140 1,481, ,394 Economic environment ,000 65, ,951 Total expenditures 56,494,538 56,780,908 54,979,461 1,801,447 Excess (deficiency) of revenues over (under) expenditures (4,241,400) (4,465,118) 778,901 5,244,019 Other financing sources (uses) Transfers in 4,620,799 4,749,956 4,814,505 64,549 Transfers out (661,839) (841,089) (783,673) 57,416 Total other financing sources (uses) 3,958,960 3,908,867 4,030, ,965 Net change in fund balances (282,440) (556,251) 4,809,733 5,365,984 Fund balances - beginning 17,682,334 17,682,334 17,682, Fund balances - ending $ 17,399,894 $ 17,126,083 $ 22,492,067 $ 5,365,984 The accompanying notes are an integral part of this statement. 33

50 Penny Sales Tax Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Positive Original Final Actual Amounts (Negative) Revenues Intergovernmental $ 6,400,000 $ 6,832,126 $ 7,306,401 $ 474,275 Investment earnings 41,500 41, , ,316 Miscellaneous ,000 4,792 (145,208) Total revenues 6,441,500 7,023,626 7,463, ,383 Expenditures Current: Public safety 150, , , Physical environment 4, ,900 72, ,020 Transportation , ,279 (1,345) Culture and recreation 1,000 32,302 32, Economic environment -- 4,420, ,420,000 Capital outlay: Public safety 454, ,292 54, ,871 Physical environment 51,190 1,974, ,170 1,836,255 Transportation 6,213,390 12,216,154 4,217,148 7,999,006 Culture and recreation 902,133 2,971, ,271 2,360,563 Total expenditures 7,776,901 23,157,841 5,440,233 17,717,608 Excess (deficiency) of revenues over (under) expenditures (1,335,401) (16,134,215) 2,022,776 18,156,991 Other financing uses Transfers in , , Transfers out (1,261,364) (1,429,539) (1,294,769) 134,770 Total other financing sources (uses) (1,261,364) (1,129,539) (994,769) 134,770 Net change in fund balances (2,596,765) (17,263,754) 1,028,007 18,291,761 Fund balances - beginning 22,601,915 22,601,915 22,601, Fund balances - ending $ 20,005,150 $ 5,338,161 $ 23,629,922 $ 18,291,761 The accompanying notes are an integral part of this statement. 34

51 Community Redevelopment Agency Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Positive Original Final Actual Amounts (Negative) Revenues Taxes $ 3,848,000 $ 3,848,000 $ 3,862,363 $ 14,363 Intergovernmental 3,913,535 3,913,535 3,928,580 15,045 Investment earnings 40,000 40, ,796 94,796 Miscellaneous 2,636,828 3,332,975 1,816,123 (1,516,852) Total revenues 10,438,363 11,134,510 9,741,862 (1,392,648) Expenditures Current: Public safety -- 4, ,704 Transportation 555, ,177 46, ,838 Culture and recreation (35) Economic environment 338,041 1,660, ,694 1,358,879 Debt service: Principal payments -- 1,748, ,748,590 Interest and fiscal charges -- 67,557 67, Capital outlay: Transportation 10,505,133 15,986,363 9,995,370 5,990,993 Culture and recreation ,178 97, ,853 Total expenditures 11,398,454 20,908,142 10,508,320 10,399,822 Excess of revenues over expenditures (960,091) (9,773,632) (766,458) 9,007,174 Other financing uses Transfers out (7,239,002) (5,939,002) (5,939,002) -- Net change in fund balances (8,199,093) (15,712,634) (6,705,460) 9,007,174 Fund balances - beginning 14,392,022 14,392,022 14,392, Fund balances (deficit) - ending $ 6,192,929 $ (1,320,612) $ 7,686,562 $ 9,007,174 The accompanying notes are an integral part of this statement. 35

52 Housing and Community Development Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Positive Original Final Actual Amounts (Negative) Revenues Intergovernmental $ 2,259,214 $ 4,954,778 $ 2,384,477 $ (2,570,301) Charges for services Investment earnings ,417 27,417 Miscellaneous ,868 9,692 (205,176) Total revenues 2,259,214 5,169,646 2,421,589 (2,748,057) Expenditures Current: Economic environment 2,256,864 5,167,159 2,420,674 2,746,485 Capital outlay: General government 2,350 2,487 1,262 1,225 Total expenditures 2,259,214 5,169,646 2,421,936 2,747,710 Excess of revenues over expenditures (347) (347) Other financing sources Transfers in Net change in fund balances Fund balances - beginning Fund balances - ending $ -- $ -- $ -- $ -- The accompanying notes are an integral part of this statement. 36

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54 Proprietary Funds Statement of Net Position September 30, 2015 Governmental Business-type Activities - Enterprise Funds Activities - Water and Van Solid Other Internal Sewer Wezel Waste Funds Totals Service Funds Assets Current assets: Cash and cash equivalents $ 9,693,135 $ 2,142,546 $ 1,665,368 $ 271,174 $ 13,772,223 $ 3,944,812 Investments 33,347,035 7,370,942 5,729, ,909 47,380,206 13,571,233 Receivables (net): Accounts 3,593, , ,023 20,018 4,143, Interest 56,697 12,212 9,790 1,676 80,375 39,468 Due from other funds ,663 Due from other governmental agencies ,083 4, Inventories 219,479 2, , ,025 63,911 Prepaid items 94, ,834 2,247 83, ,485 13,837 Total unrestricted current assets 47,004,686 10,127,043 7,672,748 1,349,542 66,154,019 17,639,476 Restricted current assets: Cash and cash equivalents 2,861, , ,863, Cash with fiscal agents 4,393, ,393, Investments 9,843, , ,852, Accrued interest receivable 21, , Total restricted current assets 17,120, , ,131, Total current assets 64,125,537 10,127,043 7,683,672 1,349,542 83,285,794 17,639,476 Noncurrent assets: Capital assets: Non-depreciable: Land 6,040, , ,686,553 12,252, Art collections , , Construction in progress 22,320, ,545 25, ,939, ,633 Depreciable: Buildings 25,134,048 26,733, ,019 23,577,331 75,608, Improvements , ,271 10,190,531 11,351,939 3,011,865 Utility systems 274,644, ,644, Equipment 9,778,076 1,679,646 6,159,142 1,010,422 18,627,286 10,383,379 Less accumulated depreciation (181,400,542) (14,911,005) (4,887,956) (10,030,466) (211,229,969) (9,373,368) Total capital assets (net of accumulated depreciation) 156,517,466 15,654,158 1,807,704 30,434, ,413,699 4,172,509 Other assets: Advance to other funds ,572 Total noncurrent assets 156,517,466 15,654,158 1,807,704 30,434, ,413,699 4,294,081 Total assets 220,643,003 25,781,201 9,491,376 31,783, ,699,493 21,933,557 Deferred Outflows of Resources Non-pension: Deferred charge on refunding 398, , Pension: Difference between expected and actual experience 15, , ,799 1,859 Changes in assumptions 400,142 3,205 68,485 19, ,058 48,550 Contributions to the pension plan subsequent to the measurement date 2,373,197 19, , ,919 2,832, ,842 Total deferred outflows of resources $ 3,186,920 $ 22,555 $ 394,880 $ 135,881 $ 3,740,236 $ 294,251 The accompanying notes are an integral part of this statement. 38

55 Governmental Business-type Activities - Enterprise Funds Activities - Water and Van Solid Other Internal Sewer Wezel Waste Funds Totals Service Funds Liabilities Current liabilities: Accounts payable $ 2,208,955 $ 201,525 $ 577,961 $ 65,414 $ 3,053,855 $ 386,615 Retainages payable 322, , ,465 $ 1,480 Due to other funds Due to other governmental agencies 81 12, , Interfund payables 457, ,083 65,427 Accrued interest payable Liability for unpaid claims ,657,380 Accrued wages 311,078 57,649 56,904 46, ,223 51,091 Compensated absences 445,187 70,494 70,146 66, ,021 2,383,379 Unearned revenue 212,782 5,762, , ,981 6,350, Total unrestricted current liabilities 3,958,480 6,205, , ,358 11,423,617 5,545,538 Current liabilities payable from restricted assets: Accounts payable 83, , Retainages payable 39, , Accrued interest payable 1,248, ,248, Customer deposits 1,140, , ,151, Revenue bonds & loans payable - current 3,145, ,145, Total current liabilities payable from restricted assets 5,657, , ,668, Total current liabilities 9,615,815 6,205, , ,358 17,091,876 5,545,538 Noncurrent liabilities: Compensated absences 427,729 67,730 67,396 63, ,453 2,289,912 Revenue bonds, loans payable and unamortized premium less current maturities 52,199, ,199, Net pension liability 16,406, ,434 2,808, ,318 20,134,554 1,990,675 Total noncurrent liabilities 69,034, ,164 2,875, ,916 72,960,560 4,280,587 Total liabilities 78,649,849 6,404,945 3,858,368 1,139,274 90,052,436 9,826,125 Deferred Inflows of Resources Pension: Net difference between projected and actual earnings on pension plan investments 1,278,163 10, ,760 61,414 1,568, ,083 Net Position Net investment in capital assets 103,878,476 15,654,158 1,807,704 30,434, ,774,709 4,172,509 Restricted: Debt service 6,322, ,322, Construction 5,978, ,978, Unrestricted 27,722,219 3,734,414 4,001, ,735 35,742,792 8,074,091 Total net position $ 143,901,911 $ 19,388,572 $ 5,809,128 $ 30,719,106 $ 199,818,717 $ 12,246,600 39

56 Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Position For the Year Ended September 30, 2015 Governmental Business-type Activities - Enterprise Funds Activities - Water and Van Solid Other Internal Sewer Wezel Waste Funds Totals Service Funds Operating revenues Charges for services $ 42,699,217 $ 10,115,107 $ 10,473,903 $ 2,611,103 $ 65,899,330 $ 14,433,971 Rents 21, ,207 60, , , Fines , , Miscellaneous 123,136 9,672 15,571 10, , ,762 Total operating revenues 42,844,313 10,757,986 10,549,474 3,504,793 67,656,566 14,731,733 Operating expenses Personal services 9,940,459 1,757,230 2,214,737 1,533,200 15,445,626 4,122,424 Contractual services 6,758,532 7,879,891 5,784, ,885 21,287,347 8,745,394 Repairs and maintenance 3,852, , ,080 1,601,525 6,142, ,985 Supplies and materials 2,237, , , ,148 3,127,727 1,710,948 Depreciation 8,911,163 1,032, , ,619 11,340, ,332 Other 33, , Total operating expenses 31,733,089 11,058,586 9,790,904 4,794,377 57,376,956 16,106,083 Operating income (loss) 11,111,224 (300,600) 758,570 (1,289,584) 10,279,610 (1,374,350) Nonoperating revenues (expenses) Grant income (8,439) 960, , Investment earnings 508,595 71,151 62,768 13, , ,493 Interest expense (947,227) (947,227) (777) Loan and bond issue expense (53,624) (53,624) -- Gain (loss) on disposition of capital assets (10,241,470) 27 21, (10,219,956) 24,293 Total nonoperating revenues (expenses) (10,742,165) 1,031,229 83,916 13,963 (9,613,057) 199,009 Income (loss) before transfers 369, , ,486 (1,275,621) 666,553 (1,175,341) Capital contributions ,637,286 9,637, Transfers in , , Transfers out (886,260) -- (886,260) (4,282) Change in net position 369, ,629 (43,774) 9,023,504 10,079,418 (1,179,623) Net position - beginning, as restated 143,532,852 18,657,943 5,852,902 21,695, ,739,299 13,426,223 Net position - ending $ 143,901,911 $ 19,388,572 $ 5,809,128 $ 30,719,106 $ 199,818,717 $ 12,246,600 The accompanying notes are an integral part of this statement. 40

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58 Proprietary Funds Statement of Cash Flows Year Ended September 30, 2015 Cash flows from operating activities Business-type Activities - Enterprise Funds Governmental Activities - Water and Van Solid Other Internal Sewer Wezel Waste Funds Totals Service Funds Cash received from customers and users $ 44,359,935 $ 11,460,172 $ 10,421,114 $ 3,527,752 $ 69,768,973 $ 1,607,154 Cash received from other funds for goods and services ,126,917 Cash payments to vendors for goods and service (12,273,928) (7,878,368) (6,306,031) (2,419,072) (28,877,399) (4,561,011) Cash payments to employees for services (11,235,826) (1,879,098) (2,389,000) (1,678,244) (17,182,168) (4,172,237) Cash payments to customers (588,727) (588,727) -- Cash payments to other funds (2,485,213) (277,948) (385,066) (303,578) (3,451,805) (368,920) Claims paid (6,207,300) Net cash provided (used) by operating activities 17,776,241 1,424,758 1,341,017 (873,142) 19,668,874 (575,397) Cash flows from noncapital financing activities Grants (8,439) 960, , Interfund loan borrowings 457, ,083 65,427 Interfund loan repayments (35,145) (35,145) -- Transfers in , , Transfers out (886,260) -- (886,260) (4,282) Loan to/from other fund Repayment of loan to/from other fund ,754,020 Interest on loan to/from other fund ,261 Net cash provided (used) by noncapital financing activities 413, ,051 (886,260) 661,839 1,149,129 1,888,426 Cash flows from capital and related financing activities Proceeds from issuance of refunding bonds 43, , Payment to bond escrow agent Acquisition of capital assets (13,103,096) (1,396,840) (754,550) (252,518) (15,507,004) (923,609) Principal repayments - revenue bonds (3,765,000) (3,765,000) -- Interest paid (2,833,850) (2,833,850) -- Fiscal charges paid (44,070) (44,070) -- Federal Interest subsidy 450, , Proceeds from sale of capital assets 48, , ,010 24,293 Net cash used by capital and related financing activities (19,203,718) (1,396,813) (733,384) (252,179) (21,586,094) (899,316) Cash flows from investing activities Interest on investments 587,159 69,676 64,856 14, , ,560 Proceeds from sale and maturities of investments 5,269, , ,397 6,655,647 1,192,796 Purchase of investments -- (24,176) (24,176) -- Net cash provided (used) by investing activities 5,857,155 45, , ,835 7,367,600 1,302,356 Net increase (decrease) in cash and cash equivalen 4,843,177 1,033, ,483 54,353 6,599,509 1,716,069 Cash and cash equivalents at beginning of year 12,105,006 1,109, , ,821 14,430,222 2,228,743 Cash and cash equivalents at end of year $ 16,948,183 $ 2,142,546 $ 1,667,828 $ 271,174 $ 21,029,731 $ 3,944,812 The accompanying notes are an integral part of this statement. 42

59 Business-type Activities - Enterprise Funds Governmental Activities - Water and Van Solid Other Internal Sewer Wezel Waste Funds Totals Service Funds Reconciliations of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) $ 11,111,224 $ (300,600) $ 758,570 (1,289,584) $ 10,279,610 $ (1,374,350) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 8,911,163 1,032, , ,619 11,340, ,332 Pension expense (663,615) (5,532) (31,174) (33,776) (734,097) (36,415) Net (increase) decrease in: Accounts receivable (525,926) 39,272 7,003 1,353 (478,298) 2,339 Due from other governmental agencies (202) (202) -- Inventories (82,098) (725) -- (3,947) (86,770) 12,516 Prepaid items 182, ,375 2,127 (37,147) 260,720 7,514 Net increase (decrease) in: Accounts payable (144,460) (200) 108,043 (42,635) (79,252) (38,153) Retainages payable (333,399) (333,399) -- Liability for unpaid claims (120,888) Due to other governmental agencies (46) (12,679) (12,119) (894) Accrued wages 23,459 9,047 10,120 7,648 50,274 8,905 Compensated absences 118,073 37,525 8,401 12, , ,879 Unearned revenue 6, ,593 (134,956) 21, , Customer deposits 107, (407) , Other post-employment benefits (934,026) (162,908) (161,610) (131,631) (1,390,175) (146,182) Total adjustments 6,665,017 1,725, , ,442 9,389, ,953 Net cash provided (used) by operating activities: $ 17,776,241 $ 1,424,758 $ 1,341,017 $ (873,142) $ 19,668,874 $ (575,397) Noncash investing, capital, and financing activities Capital assets transferred from other funds $ -- $ -- $ -- 9,637,286 $ 9,637,286 $ -- Amortization of loan and bond insurance costs 2, , Amortization of premium on issuance of bonds 236, , Amortization of deferred loss on defeasance of d 96, , Proceeds from refunding bonds deposited immediately into an irrevocable escrow account for the defeasance of debt 4,680, ,680, Bond issuance costs withheld from bond procee 7, , The accompanying notes are an integral part of this statement. 43

60 Fiduciary Funds Statement of Fiduciary Net Position September 30, 2015 Pension and OPEB Agency Trust Funds Funds Assets Cash and cash equivalents $ 2,155,712 $ 53,710 Investments: Money market funds 871, U.S. Government securities 1,245, U.S. Government agency securities 1,910, Common and preferred stock 21,317, Corporate bonds and notes 3,246, Domestic mutual funds 2,832, Bond mutual funds 1,206, Real estate funds 4,629, Mortgage backed securities 786, Municipal securities Foreign stocks 4,399, Foreign mutual funds 411, Foreign bond mutual funds 334, Total investments 43,191, Receivables (net): Accounts 191, Interest and dividends 91, Total receivables 283, Other assets: Prepaid items 1, Equipment Less accumulated depreciation Total other assets 1, Total assets 45,632,136 53,805 Deferred Outflow of Resources Pension: Difference between expected and actual experience Changes in assumptions Total deferred outflows of resources Liabilities Accounts payable 58, Liability for unpaid claims 580, Accrued wages Compensated absences Unearned revenue Accrued liabilities -- 53,805 Net pension liability 15, Total liabilities 655,126 53,805 Deferred Inflows of Resources Pension: Net diference between projected and actual earnings on pension plan investments 1, Net Position Restricted for pension and OPEB benefits $ 44,976,217 $ -- The accompanying notes are an integral part of this statement. 44

61 Fiduciary Funds Statement of Changes in Fiduciary Net Position For the Year Ended September 30, 2015 Pension and OPEB Trust Funds Additions Contributions Plan members $ 1,884,557 Employer City of Sarasota 5,879,506 Sarasota County 3,986 State on behalf payments, through General Fund -- Other 837,798 Total contributions 8,605,847 Investment income Net increase in fair value of investments 878,915 Interest 160,354 Dividends 710,527 Total investment income 1,749,796 Less investment expense (376,580) Net investment income (loss) 1,373,216 Total additions 9,979,063 Deductions Benefits 7,782,073 Other benefits 403,462 Administrative expenses 978,819 Refunds of contributions -- Total deductions 9,164,354 Net increase (decrease) 814,709 Net Position Restricted for Pension and OPEB Benefits Beginning of Year, restated 513,896,749 End of Year $ 514,711,458 The accompanying notes are an integral part of this statement. 45

62 Component Units Statement of Net Position September 30, 2015 St. Armands Business Improvement Downtown Improvement District District Total Assets Cash and cash equivalents $ 65,258 $ 47,152 $ 112,410 Investments 224, , ,723 Receivables (net): Interest Due from other governmental agencies Prepaid items Capital assets: Non-depreciable 1, ,376 Depreciable (net) 1,132, ,690 1,416,982 Total assets 1,423, ,367 1,918,187 Liabilities Accounts payable 8,163 2,647 10,810 Accrued wages -- 1,175 1,175 Unearned revenue 1, ,692 Total liabilities 9,580 4,097 13,677 Net Position Net investment in capital assets 1,133, ,690 1,418,358 Unrestricted 280, , ,152 Total net position $ 1,414,240 $ 490,270 $ 1,904,510 The accompanying notes are an integral part of this statement. 46

63 Component Units Statement of Activities For the Year Ended September 30, 2015 Program expenses: St. Armands Business Improvement Downtown Improvement District District Total Personal services $ -- $ 34,316 $ 34,316 Contractural services 90, , ,965 Repairs and maintenance -- 67,937 67,937 Supplies and materials Depreciation 60,819 38,306 99,125 Total program expenses 151, , ,494 Program profit (loss) (151,177) (383,317) (534,494) General revenues: Property taxes 229, , ,374 Investment earnings 2,072 1,917 3,989 Miscellaneous 2,888 1,100 3,988 Total general revenues 234, , ,351 Change in net position 83,530 (31,673) 51,857 Net position - beginning 1,330, ,943 1,852,653 Net position - ending $ 1,414,240 $ 490,270 $ 1,904,510 The accompanying notes are an integral part of this statement. 47

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65 Notes to the Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Sarasota, Florida, (the City) was incorporated in The City is on the west coast of Florida, approximately half-way down the state and is comprised of 24 square miles with a population of 52,905. The City was created pursuant to the Laws of Florida, Chapter The current charter was approved by a special act of the State of Florida legislature in 1973 and by the voters of the City at an election held September 6, The City operates under the Commission-Manager form of government and provides municipal services such as police protection, public works and all the necessary functions of general government. The City also has certain enterprise operations consisting of a water and sewer utility, a golf course, a performing arts hall, a solid waste collection service, a municipal auditorium and parking management. The financial statements of the City have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. As required by generally accepted accounting principles, the accompanying financial statements present the City of Sarasota and its component units (entities for which the City is considered to be financially accountable). Blended component units, although legally separate entities, are in substance part of the government s operations. Therefore, data from these units are presented with data of the City (the primary government). The discretely presented component units are aggregated and reported in a separate column in the government-wide financial statements to emphasize that they are legally separate from the City. Each blended and discretely presented component unit has a September 30 th year-end. Blended Component Unit: The Community Redevelopment Agency (CRA) was created by the City Commission, pursuant to Florida Statutes, Section , to provide for the rehabilitation, conservation and redevelopment of certain areas within the City. The CRA operates under the guidance of the City Commission which meets separately as the CRA s governing body to approve the adoption of the annual budget, the issuance of debt, the execution of contracts and the payment of unbudgeted expenditures. The financial statements of the CRA have been included within the City s reporting entity as the Community Redevelopment Special Revenue Fund. Separate financial statements of the CRA are not available. The Golden Gate Point Special District (District) was created by the City Commission, pursuant to Florida Statutes, Section The purpose of the District is to construct and maintain enhancement and improvements within the public rights of way on Golden Gate Point. The City Commission is the governing board of the District which meets to approve the adoption of the annual budget, the issuance of debt, the execution of contracts and the payment of expenditures. The financial statements of the District have been included within the City s reporting entity as the Golden Gate Point Special Revenue Fund. Separate financial statements of the District are not available. Discretely Presented Component Units: The St. Armands Business Improvement District (BID) was created by City Ordinance under Chapter of the Florida Statutes. The boundaries of the BID are made up of all parcels of real property located within the CT Zone District in the vicinity of St. Armands Circle. The BID is a dependent taxing authority with the power to levy up to two mills, with City Commission approval, for the purpose of purchasing supplemental services (maintenance, security, sanitation, promotions, infrastructure and capital improvements). The Downtown Improvement District (DID) was created by City Ordinance under Chapter of the Florida Statutes. The boundaries of the DID includes all non-residential parcels within the downtown core of the City. The DID is a dependent taxing authority with the power to levy up to two mills, with City Commission approval, for the purpose of purchasing supplemental services (maintenance, security, sanitation, promotions, infrastructure and capital improvements). The City Commission appoints the governing boards. The BID and DID are fiscally dependent on the City, and their financial statements are included in separate columns of the accompanying financial statements. 49

66 Notes to the Financial Statements September 30, 2015 Separate financial statements are not available. The BID and DID are accounted for as governmental fund types and use the same applicable accounting policies the City presents in the Notes to Financial Statements. B. Government-Wide and Fund Financial Statements The basic financial statements consist of the government-wide financial statements and fund financial statements. The government-wide financial statements required under this statement (the Statement of Net Position and the Statement of Activities) report information on all of the non-fiduciary activities of the City and its component units. For the most part, the effect of interfund activity has been removed from these statements so as not to distort financial results. Fiduciary funds are also excluded from the governmentwide financial statements since by definition these assets are being held for the benefit of a third party and cannot be used to address activities or obligations of the government. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from businesstype activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses 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 (fund financial statements) are provided for governmental funds, proprietary funds, and fiduciary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The City s fiduciary funds are presented in the fund financial statements by type (pension/opeb trust and agency funds) but as noted above are not included in the government-wide statements. A reconciliation is provided that converts the results of governmental fund accounting to the government-wide presentations. Internal Service Funds of a government (which traditionally provide services primarily to other funds of the government) are presented in summary form as part of the proprietary fund financial statements. Since the principal users of the internal services are the City s governmental activities, financial statements of internal service funds are consolidated into the governmental activities column when presented at the governmentwide level. To the extent possible, the costs of these services are reflected in the appropriate governmental activities. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements, the proprietary fund financial statements and the fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses 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. Operating revenues shown for proprietary operations generally result from producing or providing goods and services such as water, sewer and solid waste collection. Operating expenses for these operations include all costs related to providing the service or product. These costs include salaries, supplies, travel, contract services, depreciation, administrative expenses and other expenses directly related to costs of services. All other revenue and expenses not meeting these definitions are reported as non-operating revenues and expenses. 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 50

67 Notes to the Financial Statements September 30, 2015 measurable and available. Revenues are considered to be available when they are collectible within the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days (90 days for grant revenue) of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. 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. Grant revenues are considered earned and are accrued simultaneously with the grant expenditure. In applying the susceptibility-to-accrual concept to intergovernmental revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. There are, however, essentially two types of these revenues. In one, monies must be expended for the specific purpose or project before any amounts will be paid to the City; therefore, revenues are recognized based upon the expenditures recorded. In the other, monies are virtually unrestricted as to purpose of expenditure and substantially irrevocable; i.e., revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenues at the time of receipt or earlier if they meet the availability criterion. All other revenue items are considered to be measurable and available only when cash is received by the government. Agency funds are unlike all other types of funds, reporting only assets and liabilities. Therefore, they do not have a measurement focus, but do however use the accrual basis of accounting to recognize receivables and payables. They are merely clearing accounts for assets held by the City as an agent for individuals, private organizations and other governmental entities. The financial transactions of the City are recorded in individual funds. Each fund is accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. GASB Statement No. 34 sets forth minimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category or the governmental and enterprise combined) for the determination of major funds. The City reports the following major governmental funds: The General Fund is the City s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Most of the essential governmental services such as police protection, public works, street, highway and landscape maintenance and general administration are provided by the General Fund. The Penny Sales Tax Fund accounts for the revenue derived from a one cent local option infrastructure sales surtax imposed by Sarasota County, Florida. The Community Redevelopment Fund is used to account for tax increment revenues that encourage development in the downtown and Newtown areas. The Housing and Community Development Fund accounts for a variety of affordable housing and community development programs funded by the Federal Department of Housing and Urban Development. The City reports the following major proprietary funds: The Water and Sewer Fund accounts for the provision of water and sewer services to the residents and businesses of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, financing and related debt service and billing and collection. The Van Wezel Performing Arts Hall Fund accounts for revenues and expenses of a cultural center which provides a wide variety of entertainment, including performances by nationally known theater, ballet and musical groups, for which a significant portion is financed through user charges. The Solid Waste Management Fund accounts for the provision of solid waste collection and recycling activities to the residents and businesses of the City. 51

68 Notes to the Financial Statements September 30, 2015 In addition, the City reports the following fund types: Internal Service Funds account for services provided to other departments within the City on a cost reimbursement basis. These services include: information technology services, equipment maintenance services, equipment replacement services and general benefits and insurance services. Because all of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The excess revenue or expenses for the funds are allocated to the appropriate functional activity. The Pension Trust Funds account for the activities of the General Employees Defined Benefit Pension, Police Officers Defined Benefit Pension, Firefighters Defined Benefit Pension and General Employees Defined Contribution plans, which accumulate resources for pension benefit payments to qualified employees. The Other Post Employment Benefits Trust Fund accounts for the future liability of costs for medical/prescription/dental coverage, extended life insurance coverage and benefits under the Employee Assistance Program available to retirees and their dependents. The Agency Funds account for impact fees collected from citizens and disbursed to Sarasota County. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the government s water and sewer function and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the Water and Sewer enterprise fund, the Van Wezel Performing Arts Hall enterprise fund, and the Solid Waste enterprise fund are charges to customers for sales and services. The Water and Sewer fund also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. The principal operating revenues of the internal service funds are interfund charges. The 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 City allocates charges for indirect services provided by General Fund departments based on a cost allocation plan. The costs are included in the program expense reported by functional activity in the Statement of Activities. D. Cash and Cash Equivalents The City maintains a cash and investment pool that is available for use by all funds. The City considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents for purposes of the statement of cash flows. The City s cash and investment pool consists of United States Government securities, United States Government Agency securities, Federal Instrumentalities, Mortgage-Backed Securities, Florida Prime administered by the Florida State Board of Administration, certificates of deposit, money market funds, Florida League of Cities Municipal Investment Trust and cash. Cash balances and requirements of all funds are considered in determining the amount to be invested. Interest earned on pooled cash and investments is allocated to funds based on their average daily balances. E. Investments For all funds, except the OPEB and pension trust funds, investments consist of U.S. Government securities, U.S. Government Agency securities, Federal Instrumentalities, Mortgage-Backed Securities, Florida Prime 52

69 Notes to the Financial Statements September 30, 2015 administered by the Florida State Board of Administration, money market funds and the Florida League of Cities Municipal Investment Trust. Investments of the OPEB and pension trust funds consist of U.S. Government securities, U.S. Government Agency securities, corporate bonds and notes, common and preferred stocks, mutual funds, foreign securities, real estate, and money market funds. All investments are reported at fair value using quoted market prices or the best estimate available. The difference between cost and fair value of investments held is recorded as net unrealized gains or losses and is included in net investment earnings. F. Other Receivables All trade receivables on the statement of net position are shown net of an allowance for uncollectibles. Long-term notes receivable due to governmental funds represent loans to property owners for rehabilitation of properties. Recognition of governmental fund type revenues is deferred until they become current, in accordance with the modified accrual basis of accounting. G. Interfund Receivables and Payables During the course of its operations, the City has numerous transactions between funds to provide services, construct assets and service debt. To the extent that certain transactions between funds were not paid for or received as of September 30, 2015, balances of interfund receivables and payables expected to be liquidated within one year have been recorded as due from and due to other funds. Balances of interfund receivables and payables not expected to be liquidated within one year are recorded as advances to and advances from other funds. Balances of advances to other funds are reserved in the fund balances of the respective funds since these balances are not available for appropriation. Short-term interfund loans to eliminate cash deficits are classified as interfund receivables/payables. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances. H. Inventories Inventories are adjusted to annual and periodic counts and are valued at cost, which approximates market, using the average cost method. Inventory is accounted for using the consumption method, whereby inventories are recorded as expenditures when they are used. I. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. J. Restricted Assets Proceeds of the City s enterprise fund revenue bonds, as well as other resources set aside in accordance with bond covenants or local ordinance, are classified as restricted on the fund level balance sheets of the enterprise funds. These include the following: interest and sinking accounts used for accumulation of resources needed to meet debt service requirements as they become due; general reserve account used to accumulate resources to pay the cost of improvements, to pay the cost of purchasing or redeeming bonds, to pay the principal and interest on any obligations subordinate to the bonds issued under the resolution, to make up any deficiencies in any of the Accounts and to pay the cost of any item qualifying as an expenditure of the Renewal, Replacement and Improvement Account; and the utility construction accounts used for acquisition and construction of assets funded by revenue bond proceeds. Restricted assets are not presented on the statement of net position of the governmental funds under the modified accrual basis of accounting; however, certain assets of these funds are restricted as to use. Such assets, consisting primarily of cash and receivables, include debt proceeds, permit fees, state and federal forfeiture awards, state and federal grants and amounts held for debt service. All applicable assets in the enterprise funds and in the governmental funds have been restricted in amounts sufficient to meet restrictive purposes. 53

70 Notes to the Financial Statements September 30, 2015 K. 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. Capital assets are defined by the City as assets with an initial estimated useful life in excess of one year and an individual cost of more than $500 for tangible personal property and $1,000 for buildings, improvements, infrastructure and utility systems. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The total interest expense incurred by the water and sewer fund during the year was $2,683,075. Of this amount, $1,145,251, less investment income of $65,771, was included as part of the cost of capital assets under construction for water and wastewater construction projects. The City has a collection of art presented both in buildings and public outdoor spaces. The true value of the art is expected to either be maintained or enhanced over time and thus, the art is not depreciated. If individual pieces are lost or destroyed the loss is recorded. Property, plant, and equipment of the City is depreciated using the straight line method over the following estimated useful lives: L. Deferred Outflows/Inflows of Resources Assets Years Buildings Other improvements Public domain infrastructure System infrastructure 30 Vehicles 4 Office equipment 5 Computer equipment 3 In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has the following items that qualify for reporting in this category: Deferred charges on refunding. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Differences between expected and actual experience with regard to economic and demographic factors in the measurement of the total pension liability and changes of assumptions about future economic or demographic factors or of other inputs. These amounts are deferred and included in collective pension expense, beginning in the current measurement period, using a systematic and rational method over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the pension plan (active employees and inactive employees) determined as of the beginning of the measurement period. Pension contributions subsequent to measurement date related to the net pension liability are reported as deferred outflows of resources until the next measurement date. 54

71 Notes to the Financial Statements September 30, 2015 In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category: Unavailable revenues reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from the following sources: 1) Revenues that are not collected during the availability period. The City considers grant revenues to be available if they are collected within 90 days of the end of the current fiscal period; 2) An offset account to the long-term notes receivables and special assessments in the governmental funds. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Differences between expected and actual experience with regard to economic and demographic factors in the measurement of the total pension liability. This amount is deferred and included in collective pension expense, beginning in the current measurement period, using a systematic and rational method over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the pension plan (active employees and inactive employees) determined as of the beginning of the measurement period. Net differences between projected and actual earnings on pension plan investments related to the net pension liability. Net differences between projected and actual earnings on pension plan investments identified during the measurement period are deferred and amortized as a component of pension expense in future periods. M. 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, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond insurance costs are recorded as prepaid items and amortized over the term of the bonds using the bonds outstanding method, which approximates the effective interest method. Other bond issuance costs are expensed as incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. N. Compensated Absences It is the City s policy to allow employees to accumulate unused vacation benefits up to certain maximum hours. Unused sick leave benefits cannot be accumulated. Unused vacation is paid upon an employee s termination. Earned but unpaid vacation benefits are recognized as an expense or expenditure in the Proprietary and Governmental Fund types when earned because the City has provided financial resources for the full amount through its budget process. The City s Governmental Funds liability for accrued compensated absences is reported in the General Benefits and Insurance Internal Service Fund. This fund is reimbursed through payroll charges to the City s Governmental Funds. A liability for those amounts is reported in governmental funds only if they have matured as a result of employee resignations or retirements. 55

72 Notes to the Financial Statements September 30, 2015 O. Net Position The government-wide and business-type fund financial statements utilize a net position presentation. Net position is presented in three components net investment in capital assets, restricted, and unrestricted. Net Investment in Capital Assets This component of net position consists of capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, notes or other borrowings attributable to the acquisition, construction, or improvement of those assets. This component does not include the portion of debt attributable to the unspent proceeds. Restricted This component consists of net position that has constraints placed on it either externally by third-parties (creditors, grantors, contributors, or laws or regulations of other governments) or by law through constitutional provisions or enabling legislation. Unrestricted This component consists of net position that does not meet the definition of invested in capital assets (net of related debt), and restricted. When both restricted and unrestricted resources are available for use, it is the City s policy to use restricted resources first, then unrestricted resources as they are needed. P. Fund Balance In the fund financial statements, fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purpose for which amounts in the funds can be spent. Fund balance is reported in five components nonspendable, restricted, committed, assigned and unassigned. Nonspendable Fund Balance consists of amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. Not in spendable form includes items that are not expected to be converted to cash (such as inventories and prepaid items) and long-term loans and notes receivable. Restricted Fund Balance consists of amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance consists of amounts that can only be used for specific purposes imposed by formal action (resolution) of the City Commission, the City s highest level of decision making authority. The committed amounts cannot be used for any other purpose unless the City Commission removes or changes the limitation by taking the same form of action (resolution) it employed to previously commit those amounts. Assigned Fund Balance consists of amounts that are set aside with the intent to be used for a specific purpose by the City Manager or his designee as authorized in the annual budget resolution. In governmental funds other than the General Fund, assigned fund balance represents the amount that is not restricted or committed. Assigned amounts cannot cause a deficit in unassigned fund balance. Unassigned Fund Balance consists of excess amounts that have not been classified in the previous four categories. All funds in this category also provide the resources necessary to meet unexpected expenditures and revenue shortfalls. When an expenditure is incurred, the City uses restricted amounts first when both restricted and unrestricted fund balances are available. Additionally, the City would first use unassigned fund balance, followed by committed fund balance and then assigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. 56

73 Notes to the Financial Statements September 30, 2015 Q. General Fund Revenue Stabilization Reserve Maintaining a General Fund Revenue Stabilization Reserve is a necessity for sound financial management and fiscal accountability. The General Fund Revenue Stabilization Reserve was established to minimize the impact of declines from economic conditions on major General Fund revenue sources. The General Fund Revenue Stabilization Reserve was created in the 2009 fiscal year using $2,937,500 of fund balance. The General Fund Revenue Stabilization Reserve fund balance is committed by the City Commission as set forth in the annual budget (and any amendments thereto) as a means to ensure funding to help mitigate cyclical downturns in the General Fund revenue base. The Stabilization Reserve is quantified by calculating a 10-year trend of six specific General Fund revenue sources: (1) Communication Services Tax, (2) Electric Franchise Fees, (3) Natural Gas Franchise Fees, (4) State Revenue Sharing, (5) Half-Cent Sales Tax, and (6) Investment Earnings. If revenues exceed the 10-year average for the six General Fund revenue sources, the excess will be transferred to the Stabilization Reserve. If revenues do not meet the 10-year average, the Stabilization Reserve will be reduced. The six revenue sources identified are distinguished from other revenue shortfalls that occur during the normal course of governmental operations. At September 30, 2015, the reserve had a balance of $1,997,301. R. Property Tax Calendar The City levies property taxes each November 1 st, which become a lien on real and personal property located in the City. Property taxes are based on the assessed values determined by the Sarasota County Property Appraiser as of the prior January 1 st. The current year s levy is based on taxable assessed property values totaling $7,595,478,127. The State of Florida permits the City to levy taxes up to 10 mills of assessed property valuations for the General Fund. For the fiscal year, the City levied taxes of mills for the General Fund and an additional mills for debt service on general obligation bonds. The Sarasota County Tax Collector collects property taxes on behalf of each municipality within county boundaries. All taxes are due from property owners on March 31 st. Taxes become delinquent on April 1 st. By May 31 st of each year, either all taxes have been collected and remitted to the City or the delinquent taxes are raised by public auction of tax certificates. Due to this arrangement there are no material unremitted tax revenues at the end of the fiscal year. The major dates in this process are listed on the following table. PROPERTY TAX CALENDAR July 1 September 30 October 1 November 1 November 1 - March 31 April 1 May 31 Assessment roll validated Millage resolution approved Beginning of City s fiscal year for which tax is to be levied Tax bills rendered and due Property taxes due with various discounts Taxes delinquent and property subject to lien Tax certificates sold by County NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the capital projects funds, which adopt project-length budgets. The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. No later than the first regular City Commission meeting of September, the City Manager submits to the City Commission a proposed operating budget for the fiscal year commencing October 1 st. The operating budget includes proposed expenditures and the means of financing the expenditures. 57

74 Notes to the Financial Statements September 30, A public hearing is conducted to obtain taxpayer comments. 3. Prior to October 1 st, the budget is legally enacted through passage of a resolution. The budget resolution restricts total expenditures by fund. Expenditures for any year may not exceed current year fund appropriations plus accumulated fund equity. 4. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level. Transfers of appropriations between funds require the approval of the City Commission. The transfer of appropriations between line items within the same department can be accomplished with Department Head and Budget Director approval. 5. All unencumbered and unexpended appropriations lapse at fiscal year-end. Encumbered appropriations also lapse, but may be honored by additional appropriations in the subsequent year s budget. 6. The City Commission has the power to revise its budget appropriations by resolution from time to time during the fiscal year; however, no revision may be made by transferring any encumbered funds unless such funds are first released or discharged from any such encumbrance. 7. Formal budgetary integration is employed as a management control device during the year for the general, special revenue and capital projects funds. 8. Budgets for the general, special revenue, debt service and capital projects funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the general, special revenue and capital projects funds. Encumbrances outstanding at year-end are reported as assigned fund balance since they do not constitute expenditures or liabilities. Encumbrances which the City intends to honor are appropriated as part of the subsequent year s budget. Budgeted amounts are as originally adopted or amended by the City. Supplemental appropriations made during the fiscal year are included in the Final Budget columns on the statement of revenues, expenditures and changes in fund balances-budget and actual. Supplemental budgetary appropriations for major funds made during the year included the following: The General Fund revenue budget was increased by $191,809. This amount includes an increase of $44,547 for various donations, an increase of $60,000 in right-of-way permit revenue, and $87,262 of grant funding for the police marine patrol. The General Fund expenditure budget was increased by $465,620. Increases to the expenditure budget included $60,000 for construction right-of-way mitigation expenses, $21,767 additional administrative service support in the Building department, $39,135 for an accreditation manager in the Police department, $24,000 for the Downtown Ambassador Program, $15,000 for additional election expenses, $12,000 for homelessness response, $4,114 for risk management software, $3,433 for the Robert L. Taylor Community Complex youth programs, and $1,000 to promote safe boating. The increase also included re-appropriations for various projects that were budgeted in a previous year but not completed. This includes $93,603 for painting the Police building, $83,100 for repairs at City Hall, $24,712 reserve for contingency, and $83,756 for various other projects. The Penny Sales Tax fund revenue budget was increased by re-appropriations in the amount of $432,126 in anticipated revenue for the Marion Anderson development project and $150,000 in anticipated contributions for City Island drainage improvements. The Penny Sales Tax fund expenditure budget was increased by $15,425,533 for re-appropriations for various projects that were budgeted in the previous fiscal year but not completed. This includes 58

75 Notes to the Financial Statements September 30, 2015 $4,420,000 for Housing, $1,150,000 for the Bobby Jones clubhouse replacement, $811,266 for intersection improvements at 1 st, Main and Ringling, $740,770 for the Marion Anderson development project, $665,785 for the US 41 and 14 th Street roundabout, $642,436 for wayfinding signage, $588,317 for street reconstruction, $572,907 for new sidewalks, and $5,834,052 for various other projects. In addition to these re-appropriations, the expenditure budget was increased by an additional $123,582. This includes $275,000 for Hart s Landing and ($151,418) for projects completed under budget. The Community Redevelopment fund revenue budget was increased by $696,147 in anticipation of sales proceeds for the retail space at the State Street Parking Garage. The Community Redevelopment fund expenditure budget was increased by $7,512,317 for reappropriations of various projects that were budgeted in the previous fiscal year but not completed. This includes $1,438,700 for 1 st Street-US41 to Pineapple, $1,222,891 for the Dr. Martin Luther King Jr. streetscape improvements, $890,587 for the Main Street-Orange Avenue roundabout, $646,641 for the Housing Authority, and $3,313,498 for various other projects. In addition to these re-appropriations, the expenditure budget was increased by an additional $516,147 for early debt repayment, $180,000 for the State Street Parking Garage, and $1,224 for economic development. The Housing and Community Development fund revenue and expenditure budgets were each increased by $2,910,432. This amount includes re-appropriations of $2,540,995 for grant funding and an additional $369,437 of additional program income available for grants. B. Deficit fund equity The Glen Oaks Debt Service Fund had a deficit fund balance of $123,952. This deficit was due to the transfer of cash to the Glen Oaks Capital Projects Fund. This deficit will be eliminated with the collection of special assessments and interest earnings. In addition, the Equipment Maintenance Internal Service Fund had a net deficit of $763,782. This deficit was due to the allocation of its share of net pension liability for the General Employees Pension Plan. The deficit will be eliminated by future revenues. C. Excess of expenditures over appropriations Expenditures exceeded appropriations at the fund level (i.e., the legal level of budgetary control) for the following funds at September 30, 2015: Nonmajor Funds Appropriations Expenditures Special Revenue Funds: Development Services $3,199,395 $3,215,035 The excess was covered by available fund balance, which was appropriated, and revenues in excess of budget as allowed by the budget resolution. NOTE 3 - DEPOSITS AND INVESTMENTS Cash and cash equivalents include cash on hand, amounts in demand and time deposits and short-term investments with original maturity dates within three months of the date acquired by the city. All of the City s deposits are held in qualified public depositories pursuant to Florida Statutes, Chapter 280, Florida Security for Public Deposits Act. Under the Act, all qualified public depositories are required to pledge eligible collateral having a market value equal to or greater than the average daily or monthly balance of all public deposits, times the depository s collateral pledging level. The pledging level may range from 50% to 125% depending upon the depository s financial condition and establishment period. All collateral must be deposited with an approved financial institution. Any losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. When public deposits are made in accordance with Chapter 280, no public depositor shall be liable for any loss thereof. 59

76 Notes to the Financial Statements September 30, 2015 The City maintains a cash and investment pool that is available for use by all funds, except the Pension Trust Funds. The deposits and investments of the Pension Trust Funds are held separately from those of other City funds. Interest income earned as a result of pooling is distributed monthly to the appropriate funds based on average daily balances. The City s investment guidelines have been defined in a written investment policy and approved by the City Commission. The guidelines specify limits by instrument, and establish a diversified investment strategy and a minimum credit quality. It applies to all funds except the Pension Trust Funds. The direction of investment strategies, within policy limits, is established by an internal investment committee that meets quarterly. The City s investment manager is authorized to invest in the State Board of Administration s Local Government Investment Pool (Florida Prime Fund), U.S. Government Securities, U.S. Government Agencies, Interest Bearing Time Deposit or Savings Accounts, Repurchase Agreements, Commercial Paper, State and/or Local Government Taxable and/or Tax-Exempt Debt, Intergovernmental Investment Pools, Corporate Obligations, FDIC Corporate Obligations, and Mortgage-Backed Securities (MBS). According to City policies, the Pension Trust Funds are also authorized to invest in common and preferred stock, mutual funds, convertible debentures, commercial paper, corporate bonds, foreign securities, real estate, and money market funds. The Florida Prime Fund and Florida League of Cities Municipal Investment Trust meet the criteria of 2a7- like pools and therefore the investments are valued using the pooled share price. The pooled share price is equivalent to the fair value of the position in each of these 2a7-like pools. The Florida Prime Fund is administered by the State Board of Administration under the regulatory oversight of the State of Florida, Chapter 19-7 of the Florida Administrative Code. The Florida League of Cities Municipal Investment Trust is an interlocal governmental entity created under the laws of the State of Florida to provide eligible units of local government with an investment vehicle to pool their surplus funds, and to invest such funds into one or more investment portfolios under the direction and daily supervision of an investment advisor (Atlanta Capital Management Company). These portfolios are actively traded and have been structured to meet a variety of investment horizons using those investments permitted under the Trust s investment policy. Fitch IBCA (an international rating agency) rates the Trust s fixed income portfolios. Investment compliance and performance is monitored by Asset Consulting Group. The independent auditing firm of Shorstein & Shorstein, P.A. conducts the Trust s annual audit in accordance with generally accepted auditing standards. The operation and administration of the Trust is the responsibility of a Board of Trustees who are selected from elected officials of governmental entities within the State of Florida and are members of the Trust. In addition, an Investment Advisory Committee comprised of eight finance directors from throughout the state assists the administrator with developing and maintaining the investment guidelines and policies of the Trust. The Trust holds legal title to all funds, investments, and assets of the Trust on behalf of the members of the Trust. The Florida League of Cities, Inc. serves as administrator of the Trust. 60

77 Notes to the Financial Statements September 30, 2015 A. City of Sarasota As of September 30, 2015, the City had the following cash, cash equivalents and investments: Weighted Average Portfolio / Investments Fair Value Maturity (Years) Cash Deposits $ 37,039,474 Not Applicable Money Market Funds 5,338, Federal Agency Bonds/Notes 17,698, Agency Mortgage-Backed Securities 6,791, Agency Collateralized Mortgage Obligations 1,227, Corporate Notes 32,979, Municipal Obligations 3,850, U.S Treasury Bonds/Notes 46,711, Supra-National Agency Bonds/Notes 1,950, Asset Backed Securities 5,228, Commercial Paper 6,496, Investment pools: Florida Prime 10,066, Municipal Investment Trust 5,093, Total Cash & Investments $ 180,472,608 Portfolio weighted average maturity 1.30 City investments include Component Units and Agency Funds. 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. When interest rates increase, the value of fixed rate securities fall. The inverse is also true, as interest rates fall, the value on fixed rate securities increase. The City manages its exposure to declines in fair market values by decreasing the weighted average maturity of its investment portfolio during periods of rising interest rates. The City s investment policy generally limits the weighted average maturity of the portfolio to a period of five years or less. Credit Risk Credit quality risk results from potential default of investments that are not financially sound. The investment policy limits investments in commercial paper to A-1/P-1 rated paper with the aggregate value not to exceed twenty percent of the total portfolio. The City s investments in United States Government Securities, United States Agencies, Federal Instrumentalities and Mortgage-Backed Securities are rated AA+ by Standard & Poor s and Aaa by Moody s Investors Service. Money market funds are invested with financial institutions that comply with Chapter 280 of Florida Statutes, whereby the City is made whole by all participating banks should a principal loss be incurred by the City. Investments in Florida Prime are rated AAA by Standard & Poor s. Investments in the Florida Municipal Investment Trust are rated by Fitch for the 1-3 Year High Quality Bond Fund at AAA/V2 and the Intermediate High Quality Bond Fund at AAA/V3 as of September 30, Concentration of Credit Risk Concentration of credit risk is the risk of loss attributable to the quantity of the government s investment in a single issuer. The City s investment policy allows for investing in a variety of securities based on the issuer. The allowable concentration in any one issuer is based on the type of issuer - i.e., 15% for Mortgage- Backed Securities, 25% for the Florida Prime Fund, Interest Bearing Time Deposit or Savings Accounts, Intergovernmental Investment Pools, 40% for United States Government Agencies, and up to 100% for United States Government Securities. 61

78 Notes to the Financial Statements September 30, 2015 Credit Concentration Risk Percentage of Investment Type Rating at Fair Value Total Investments Federal Home Loan Mortgage Corp. AA+ $ 9,976, % 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. All United States Government securities, United States Government Agencies, and Mortgage-Backed securities are held by a third party custodial entity in the name of the City. Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. The City s investment policy does not permit investments in foreign securities. B. General Employees Defined Benefit Pension Plan As of September 30, 2014, the General Employees Defined Benefit Pension Plan had the following cash, cash equivalents and investments: Weighted Average Portfolio / Investments Fair Value Maturity (Years) Cash Deposits $ 1,193,861 Not Applicable Money market funds 9,184, U.S. Government securities 4,107, U.S. Government agency securities 13,178, Common and preferred stock 72,233,305 Not Applicable Corporate bonds and notes 11,068, Real estate funds 6,607,633 Not Applicable Foreign stocks 22,977,298 Not Applicable Total Cash & Investments $ 140,551,770 Portfolio weighted average maturity 9.76 Interest Rate Risk The Plan manages exposure to declines in fair values through other methods such as evaluating the credit rating, diversifying the investments in the portfolio, and outside portfolio consulting. The Plan does not limit the weighted average maturity of its investment portfolio. Credit Risk The Plan must operate in compliance with all applicable State and Federal laws concerning the investment of pension assets. All equity investments are limited to those issues that are traded on a major stock exchange or in over-the-counter securities for which there is an active market maker regulated by the NASD. Investments in corporate fixed income securities must hold a rating in one of the three highest classifications by a major rating service. If commercial paper is used, it must be rated A-1 or P-1. Concentration of Credit Risk The Plan does not allow for any investment in more than 10% (at market) of an investment manager s equity portfolio to be invested in the shares of a single corporate issuer. Investments in equity securities shall not exceed 75% of the market value of the total Plan assets. Except for Treasury and agency obligations, no more than 10% (at cost) of any investment manager s total fixed income portfolio shall be invested in the securities of a single issuer. No more than 17.5% (at market) of the Funds assets may be invested in securities issued by corporations domiciled outside the United States. 62

79 Notes to the Financial Statements September 30, 2015 Custodial Credit Risk For an investment, this is the risk that, in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan does not believe that they have a custodial risk exposure as all their securities are insured, registered, and held by an outside custodian. Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. The plan does not have a policy that addresses the risks associated with investments in foreign currency. The plan holds $22,977,298 in foreign investments. This amount represents approximately 16.4 percent of total plan investments. Most of the foreign investments are denominated in U.S. dollars, therefore minimizing the foreign currency risk. C. Firefighters Defined Benefit Pension Plan As of September 30, 2014, the Firefighters Defined Benefit Pension Plan had the following cash, cash equivalents and investments: Weighted Average Portfolio / Investments Fair Value Maturity (Years) Cash Deposits $ 627,608 Not Applicable Money market funds 5,422, U.S. Government securities 4,375, U.S. Government agency securities 1,673, Common and preferred stock 84,175,638 Not Applicable Corporate bonds and notes 19,936, Real estate funds 13,640,187 Not Applicable Mortgage backed securities 1,150, Municipal securities 117, Foreign stocks 3,162,214 Not Applicable Total Cash & Investments $ 134,281,491 Portfolio weighted average maturity 5.94 Interest Rate Risk The Plan manages exposure to declines in fair values through other methods such as evaluating the credit rating, diversifying the investments in the portfolio, and outside portfolio consulting. The Plan does not limit the weighted average maturity of its investment portfolio. Credit Risk The Plan limits its short term investments to the following: money market or short term investment funds provided by the funds custodian; direct obligations of the United States Government with a maturity of one year or less; commercial paper issued by United States Corporations which have a maturity of 270 days or less and that is rated A-1 or higher by Standard & Poor s or P-1 or higher by Moody s and Bankers Acceptances issued by the largest fifty banks in the United States. All equity investments are limited to fully and easily negotiable equity securities. All equity investments are limited to those issues that are traded on a major stock exchange. Investments in corporate fixed income securities are limited to those securities rated A or higher by Moody s or Standard & Poor s rating services. Investments in collateralized mortgage obligations are limited to 25% of the market value of the investment manager s total portfolio and are restricted to those issues backed by the full faith of the United States Government, an Agency thereof, or are rated AAA by a major rating service and PAC (planned amortization class), NAC (non-accelerated securities) or VADM (very accurately defined maturity) securities. Concentration of Credit Risk The Plan does not allow for any investment in more than 6% (at market) of an investment manager s equity portfolio to be invested in the shares of a single corporate issuer. Investments in the shares of companies 63

80 Notes to the Financial Statements September 30, 2015 that have been publicly traded for less than one year are limited to no more than 10% of an investment manager s portfolio. Investments in securities (stocks, bonds, and cash equivalents) issued by corporations domiciled outside the United States shall not exceed 10% (at cost) of the Fund s total market value. No more than 10% (at cost) of any investment manager s total fixed income portfolio shall be invested in the securities of any single corporate issuer. No more than 10% (at cost) of the Fund s total market value may be invested in real estate investments. All real estate investments are to be made through participation in diversified commingled funds of real properties. Real estate investments shall be broadly diversified as to property type and location. Custodial Credit Risk For an investment, this is the risk that, in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan does not believe that they have a custodial risk exposure as all their securities are insured, registered, and held by an outside custodian. Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. The plan does not have a policy that addresses the risks associated with investments in foreign currency. The plan holds $3,162,214 in foreign investments. This amount represents approximately 2.4 percent of total plan investments. Most of the foreign investments are denominated in U.S. dollars, therefore minimizing the foreign currency risk. D. Police Officers Defined Benefit Pension Plan As of September 30, 2014, the Police Officers Defined Benefit Pension Plan had the following cash, cash equivalents and investments: Weighted Average Portfolio / Investments Fair Value Maturity (Years) Cash Deposits $ 1,124,663 Not Applicable Money market funds 3,312, Common and preferred stock 99,162,335 Not Applicable Corporate bonds 18,440, Domestic mutual fund 100,090 Not Applicable Bond mutual funds 21,550, Real estate funds 22,134,732 Not Applicable Foreign mutual funds 30,072,727 Not Applicable Total Cash & Investments $ 195,897,551 Portfolio weighted average maturity 5.35 Interest Rate Risk The Plan manages exposure to declines in fair values through other methods such as evaluating the credit rating, diversifying the investments in the portfolio, and outside portfolio consulting. The Plan does not limit the weighted average maturity of its investment portfolio. Credit Risk The Plan limits its short term investments to the following: money market or short term investment funds provided by the funds custodian; direct obligations of the United States Government with a maturity of one year or less; commercial paper with a maturity of 270 days or less and that is rated A-1 or higher by Standard & Poor s or P-1 or higher by Moody s; and bankers acceptances issued by the largest fifty banks in the United States. Investments in cash and cash equivalents shall not exceed 15% of the Custodian s portfolio. All equity investments are limited to fully and easily negotiable equity securities. Investments in the shares of companies that have been publicly traded for less than one year are limited to no more than 15% of the market value of an investment manager s total equity portfolio. Investments in corporate fixed income securities are limited to those securities rated A or higher by Moody s or Standard & Poor s rating services. Investments in collateralized mortgage obligations are limited to 25% of the market value of the investment 64

81 Notes to the Financial Statements September 30, 2015 manager s total portfolio and are restricted to those issues backed by the full faith of the United States Government, an Agency thereof, or are rated AAA by a major rating service and PAC (planned amortization class), NAC (non-accelerated securities) or VADM (very accurately defined maturity) securities. Concentration of Credit Risk The Plan does not allow for any investment in more than 5% (at cost) of an investment manager s equity portfolio to be invested in the shares of a single corporate issuer. Investments in equity securities shall not exceed 75% of the market value of the total Plan assets. No more than 10% (at cost) of any investment manager s total fixed income portfolio shall be invested in the securities of any single corporate issuer. No more than 25% (at market) of the Fund assets may be invested in securities (equity or fixed income) issued by corporations domiciled outside the United States. Investments in real estate shall not exceed 10% (at cost) of the value of the total fund assets. Custodial Credit Risk For an investment, this is the risk that, in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan does not believe that they have a custodial risk exposure as all their securities are insured, registered, and held by an outside custodian. Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. The plan restricts foreign investments to 25% of total plan assets. The plan holds $30,072,727 in foreign investments. This amount represents approximately 15.4 percent of total plan investments. Many of the foreign investments are denominated in U.S. dollars, therefore minimizing the foreign currency risk. E. OPEB Trust Fund As of September 30, 2015, the OPEB Trust Fund had the following cash, cash equivalents and investments: Weighted Average Portfolio / Investments Fair Value Maturity (Years) Cash Deposits $ 500,629 Not Applicable Money market funds 871, U.S. Government securities 1,245, U.S. Government agency securities 1,910, Common and preferred stock 21,317,711 Not Applicable Corporate bonds 3,246, Real estate funds 4,629,262 Not Applicable Mortgage backed securities 786, Foreign stocks 4,399,368 Not Applicable Foreign bonds mutual funds 309, Total Cash & Investments $ 39,216,333 Portfolio weighted average maturity 0.68 Interest Rate Risk The Plan manages exposure to declines in fair values through other methods such as evaluating the credit rating, diversifying the investments in the portfolio, and outside portfolio consulting. The Plan does not limit the weighted average maturity of its investment portfolio. Credit Risk The Plan limits its fixed income investments to marketable debt securities issued or guaranteed by the United States Government or its agencies, domestic corporations, asset-backed and commercial mortgagebacked securities, domestic banks and other US financial institutions. All securities must hold a rating in one of the 3 highest classifications by a major rating service. If commercial paper is used it must be rated A-1 or P-1. All equity securities are limited to securities listed on the New York, American and principal 65

82 Notes to the Financial Statements September 30, 2015 regional and foreign exchanges, and in over-the-counter securities for which there is an active market maker regulated by the NASD. Concentration of Credit Risk The Plan does not allow for any investment in more than 10% (at market) of an investment manager s equity portfolio to be invested in the shares of a single corporate issuer. Investments in equity securities shall not exceed 75% of the market value of the total Plan assets. Except for Treasury and agency obligations, no more than 10% (at cost) of any investment manager s total fixed income portfolio shall be invested in the securities of a single issuer. No more than 10% (at market) of the Funds assets may be invested in securities issued by corporations domiciled outside the United States. Custodial Credit Risk For an investment, this is the risk that, in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan does not believe that they have a custodial risk exposure as all their securities are insured, registered, and held by an outside custodian. Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. The plan does not have a policy that addresses the risks associated with investments in foreign currency. The trust fund holds $4,708,760 in foreign investments. This amount represents approximately 12 percent of total trust fund investments. Many of the foreign investments are denominated in U.S. dollars, therefore minimizing the foreign currency risk. F. General Employees Defined Contribution Retirement Plan As of September 30, 2015, the General Employees Defined Contribution Retirement Plan had the following cash, cash equivalents and investments: Weighted Average Portfolio/Investments Fair Value Maturity (Years) Cash Deposits $ 199,830 Not Applicable Domestic mutual funds 2,832,702 Not Applicable Bond mutual funds 1,206, Foreign mutual funds 411,999 Not Applicable Foreign bond mutual funds 24, Total Cash & Investments $ 4,675,462 Portfolio weighted average maturity 6.63 The General Employees Defined Contribution Plan utilizes the same investment guidelines as those used for the General Employees Pension Plan investments. Interest rate risk, credit risk, concentration of credit risk, custodial credit risk, and foreign currency risk are the same as those that have been disclosed for City investments. G. Discretely Presented Component Units The St. Armands Business Improvement District and Downtown Improvement District utilizes the same investment guidelines as those used for City investments. Interest rate risk, credit risk, concentration of credit risk, custodial credit risk, and foreign currency risk are the same as those that have been disclosed for City investments. 66

83 Notes to the Financial Statements September 30, 2015 Reconciliation of Cash and Investments A reconciliation of cash and investments as shown on the Statement of Net Position and Statement of Fiduciary Net Position follows: Statement of Statement of Fiduciary Net Position Net Position Total Primary Government Cash and cash equivalents $ 43,924,148 $ 3,643,325 $ 47,567,473 Investments 135,995, ,129, ,124,994 Total $ 179,919,718 $ 513,772,749 $ 693,692,467 Component Unit Cash and cash equivalents $ 112,410 $ 45,383 Investments 386, ,625 Total $ 499,133 $ 346,008 Total $ 694,038,475 NOTE 4 - RECEIVABLES AND DEFERRED REVENUE A. Receivables Receivables as of year-end for the City s governmental activities, individual major governmental funds, nonmajor governmental funds in the aggregate, internal service funds in the aggregate and applicable allowances for uncollectible accounts, are as follows (no allowance for uncollectibles was needed): Special Accounts Interest Interfund Notes Assessments Total General Fund $ 1,923,037 $ 34,656 $ 564,417 $ -- $ -- $ 2,522,110 Penny Sales Tax -- 29, ,596 Community Redevelopment -- 12, ,814 Housing and Community Devl , ,631 Nonmajor Governmental Funds 84,230 40, , , ,892 Internal Service Funds , ,020 Total receivables $ 2,007,819 $ 156,975 $ 564,417 $ 320,617 $ 267,235 $ 3,317,063 The interfund receivable in the General Fund was partially eliminated in the conversion from governmental funds balance sheet and internal service funds statement of net position to the governmental activities statement of net position. Receivables for the City s business-type activities, including individual major funds and allowances for uncollectibles accounts are as follows: Receivables-unrestricted: Water and Sewer Van Wezel Solid Waste Other Funds Total Accounts (billed) $ 1,751,240 $ 264,028 $ 360,837 $ 20,018 $ 2,396,123 Accounts (unbilled) 2,012, ,012,498 Allowance for uncollectibles (170,185) -- (94,814) -- (264,999) Accounts (net) 3,593, , ,023 20,018 4,143,622 Interest 56,697 12,212 9,790 1,676 80,375 Receivables-restricted: Interest 21, ,958 Total receivables (net) $ 3,672,208 $ 276,240 $ 275,813 $ 21,694 $ 4,245,955 67

84 Notes to the Financial Statements September 30, 2015 B. Special assessments receivable In 1995, the City Commission approved funding the acquisition of land for a parking lot in the St. Armands business district with a special assessment. The assessment was levied against the real property located within the St. Armands Special Assessment District. To expedite the land purchase, the City borrowed $1,795,000 from the First Florida Governmental Financing Commission (FFGFC). Although the special assessment is not specifically obligated by the loan agreement, these assessments will be used to repay the loan from the FFGFC. The special assessment receivables, which are recorded in a debt service fund, are to be collected over a twenty year period. Interest earnings are based upon an average interest rate of 5.50%. In 2011, the City Commission approved to design and construct a privacy wall and related improvements for the Glen Oaks Estates Subdivision with a special assessment. The assessment was levied against the property located within the Glen Oaks Estates Subdivision Special Assessment District. The special assessment receivables, which are recorded in a debt service fund, are to be collected over a twenty year period with interest earnings of 4.3%. The special assessments receivables at September 30, 2015, are as follows: St. Armands $140,000 Glen Oaks Estates Subdivision 127,235 Total $267,235 Current assessments receivable and the related revenues are recognized when billed and due. Assessments receivable not due during the current year are classified as deferred. Revenue is not recognized on deferred receivables until they become current, in accordance with the modified accrual basis of accounting. Receivables are considered delinquent if an annual payment is not received. As of September 30, 2015, all special assessments receivable were deferred. C. Unearned revenue Governmental funds report unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds and businesstype funds also defer revenue recognition in connection with resources that have been received, but not yet earned (unearned). As of September 30, 2015, the various components of unearned revenue reported in the governmental funds and business-type funds were as follows: Governmental Funds: Unearned Grant drawdowns prior to meeting all eligibility requirements $ 477,310 Prepaid occupational licenses 619,550 Receipts for future services 82,346 Rental receipts not yet earned 6,890 Total unearned revenue for governmental funds $ 1,186,096 Business-type Funds: Van Wezel ticket sales $ 5,012,050 Solid Waste collections billed in advance 266,529 Water and Sewer impact & connection fees 84,496 Grant receipts not yet earned 116,673 Unused gift certificates 320,274 Rental receipts not yet earned 421,742 Receipts for future services 128,886 Total unearned revenue for business-type funds $ 6,350,650 68

85 Notes to the Financial Statements September 30, 2015 NOTE 5 - INTERFUND BALANCES Interfund balances at September 30, 2015, consisted of the following amounts: A. Interfund receivables/payables: The General Fund has a $564,417 interfund receivable from various funds. This amount represents a shortterm loan made to cover a temporary cash deficit in pooled cash at year-end for the following funds: B. Due to/from other funds: Nonmajor Governmental Funds $ 41,907 Internal Service Funds 65,427 Water & Sewer 457,083 Total $ 564,417 The City reports interfund balances between funds. The total of all balances agrees with the sum of interfund balances presented in the statements of net position/balance sheet for governmental funds and for proprietary funds. This balance is an interfund receivable that is expected to be liquidated within one year. Due to Internal Service Funds from: Nonmajor Governmental Funds $ 5,663 C. Advances from/to other funds: Receivable Fund Payable Fund Amount Internal Service Nonmajor Governmental Funds $ 121,572 The General Benefits and Insurance Internal Service Fund provided an advance to the Glen Oaks Estates Subdivision Special Assessment District for the design and construction of a wall. The repayment of the advance began in the fiscal year with a final maturity in

86 Notes to the Financial Statements September 30, 2015 D. Interfund transfers: The City reports interfund transfers between many of its funds. The sum of all transfers presented in the following schedule agrees with the sum of interfund transfers presented in the governmental and proprietary fund financial statements. Interfund transfers for the year ended September 30, 2015, consisted of the following: Transfer Purpose Amount Transfers to General Fund from: Community Redevelopment fund Program funding $ 2,616,746 Nonmajor governmental funds Program funding & inv earnings 1,307,217 Solid Waste fund Return on investment 886,260 Internal Service funds Program funding & inv earnings 4,282 Total transfers to General fund $ 4,814,505 Transfer to Penny Sales Tax Fund from: Nonmajor governmental funds Program funding 300,000 Transfer to Housing & Community Development fund from: General Fund Investment earnings 347 Transfers to nonmajor governmental funds from: General Fund Grant match 121,487 Penny Sales Tax fund Debt service 1,294,769 Community Redevelopment fund Debt service 3,322,256 Nonmajor governmental funds Debt service 709,466 Total transfers to nonmajor governmental funds 5,447,978 Transfers to nonmajor enterprise funds from: General Fund Operating subsidies 661,839 Total interfund transfers in $ 11,224,669 Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. 70

87 Notes to the Financial Statements September 30, 2015 NOTE 6 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2015, was as follows: Additions Retirements Beginning and and Ending Governmental Activities: Balance Transfers Transfers Balance Capital assets not being depreciated: Land $ 40,480,911 $ -- $ -- $ 40,480,911 Art collections 877,973 14, ,373 Construction in progress 13,746,718 1,768,482 10,202,636 5,312,564 Total capital assets not being depreciated 55,105,602 1,782,882 10,202,636 46,685,848 Capital asset being depreciated: Buildings 72,780,323 1,084, ,864,694 Improvements and infrastructure 192,314,316 12,498,628 1,022, ,790,400 Equipment 25,882,305 2,617,393 1,087,039 27,412,659 Total capital assets being depreciated 290,976,944 16,200,392 2,109, ,067,753 Less accumulated depreciation for: Buildings 16,487,722 1,645, ,133,283 Improvements and infrastructure 95,083,868 6,099,953 1,022, ,161,277 Equipment 19,443,405 2,357, ,881 20,936,768 Total accumulated depreciation 131,014,995 10,102,758 1,886, ,231,328 Total capital assets being depreciated, net 159,961,949 6,097, , ,836,425 Governmental Activities capital assets, net $ 215,067,551 $ 7,880,516 $ 10,425,794 $ 212,522,273 Business-type Activities: Capital assets not being depreciated: Land $ 12,252,113 $ -- $ -- $ 12,252,113 Art collections 219, ,297 Construction in progress 41,358,001 8,056,686 26,474,956 22,939,731 Total capital assets not being depreciated 53,829,411 8,056,686 26,474,956 35,411,141 Capital asset being depreciated: Buildings 65,478,818 10,130, ,608,936 Improvements 11,147, , ,351,939 Utility systems 252,650,432 21,993, ,644,366 Equipment 17,736,072 2,125,553 1,234,339 18,627,286 Total capital assets being depreciated 347,013,208 34,453,658 1,234, ,232,527 Less accumulated depreciation for: Buildings 37,901,841 1,570, ,472,647 Improvements 5,957, , ,197,520 Utility systems 143,735,112 7,801, ,536,310 Equipment 13,528,720 1,729,093 1,234,321 14,023,492 Total accumulated depreciation 201,123,476 11,340,814 1,234, ,229,969 Total capital assets being depreciated, net 145,889,732 23,112, ,002,558 Business-type Activities capital assets, net $ 199,719,143 $ 31,169,530 $ 26,474,974 $ 204,413,699 Note: capital expenditures in governmental activities are reduced by $8,795,588, which is the amount expensed for the State Street parking garage. This asset was transferred to the Parking fund. 71

88 Notes to the Financial Statements September 30, 2015 Additions Retirements Beginning and and Ending Discretely Presented Component Units: Balance Transfers Transfers Balance St. Armands Business Improvement District Capital assets not being depreciated: Art collections $ 1,376 $ -- $ -- $ 1,376 Total capital assets not being depreciated 1, ,376 Capital assets being depreciated: Improvements 1,508, ,508,809 Equipment 66, ,082 Total capital assets being depreciated 1,574, ,574,891 Less accumulated depreciation for: Improvements 315,698 60, ,517 Equipment 66, ,082 Total accumulated depreciation: 381,780 60, ,599 Total capital assets being depreciated, net 1,193,111 (60,819) -- 1,132,292 Component unit capital assets, net $ 1,194,487 $ (60,819) $ -- $ 1,133,668 Downtown Improvement District Capital assets not being depreciated: Construction in progress $ 57,156 $ -- $ 57,156 $ -- Total capital assets not being depreciated 57, , Capital assets being depreciated: Improvements $ 391,465 $ 57,156 $ -- $ 448,621 Equipment 15, ,011 Total capital assets being depreciated 406,476 57, ,632 Less accumulated depreciation for: Improvements 130,474 35, ,853 Equipment 10,162 2, ,089 Total accumulated depreciation: 140,636 38, ,942 Total capital assets being depreciated, net 265,840 18, ,690 Component unit capital assets, net $ 322,996 $ 18,850 $ 57,156 $ 284,690 Depreciation expense was charged to functions/programs of the City as follows: Governmental activities: General government $ 597,723 Public safety 2,138,208 Physical environment 1,179,544 Transportation 4,188,873 Culture and recreation 1,003,451 Economic environment 8,626 Capital assets held by the government s internal service funds are charged to the various functions based on their usage of the assets Total depreciation expense - governmental activities $ 986,333 10,102,758 Business-type activities: Water and Sewer $ 8,911,164 Van Wezel Solid Waste Other 1,032, , ,618 Total depreciation expense - business-type activities $ 11,340,814 72

89 Notes to the Financial Statements September 30, 2015 NOTE 7 - LONG-TERM DEBT Bonds and notes outstanding at September 30, 2015, consist of the following for governmental activities: Average Amount Amount Interest Governmental Activities: Purpose of Issue Issued Outstanding Rate General Obligation Bonds Series 2007 New Police building $ 46,305,000 $ 2,140, % Series 2008 Street improvements 5,800,000 2,803, % Series 2015 Refunding 33,855,000 33,855, % Total 85,960,000 38,798,446 Special Obligation Bonds Series 1992 Capital Appreciation Refunding 19,555,000 4,400, % Series 2009 Land and Community Ctr 21,066,000 13,020, % Series 2010 Sports Stadium Rehab 8,260,000 7,370, % Total 48,881,000 24,791,622 Loans Payable 2001B FFGFC Refunding 1,270, , % 2003 FFGFC Parking garage & equip. 5,150, , % Total 6,420, ,000 Total for Governmental Activities $ 141,261,000 $ 64,530,068 Bonds and notes outstanding at September 30, 2015, consist of the following for business-type activities: Average Amount Amount Interest Business-type Activities: Purpose of Issue Issued Outstanding Rate Revenue Bonds: Series 2004 Water & Sewer Refunding $ 9,915,000 $ 490, % Series 2010A Water & Sewer System improvements 8,865,000 4,520, % Series 2010B Water & Sewer System improvements 25,255,000 25,255, % Series 2011 Water & Sewer Refunding 21,885,000 19,035, % Series 2015 Water & Sewer Refunding 4,730,000 4,730, % Total for Business-type Activities $ 70,650,000 $ 54,030,000 The City complies with Federal arbitrage regulations and has no rebate liability due as of September 30,

90 Notes to the Financial Statements September 30, 2015 The following is a summary of changes in long-term debt for the year ended September 30, 2015 (in thousands of dollars): Beginning Ending Due within Governmental Activities: Balance (b) Additions Reductions Balance one year Bonds payable: General obligation bonds $ 40,701 $ 33,855 $ 35,758 $ 38,798 $ 1,269 Special obligation bonds (a) 28, ,041 24,792 4,202 Total bonds payable 69,181 34,208 39,799 63,590 5,471 Loans payable 1, , Unamortized premium 177 2, , Compensated absences 4,549 2,431 2,307 4,673 2,384 Net OPEB obligation 16, ,821 Net pension liability 88,092-12,310 75, Long-term liabilities $ 180,650 $ 39,629 $ 55,840 $ 164,439 $ 8,245 Business-type Activities: Revenue Bonds $ 57,745 $ 4,730 $ 8,445 $ 54,030 $ 3,145 Unamortized premium 1, , Compensated absences 1, , Net OPEB obligation 1, ,506 - Net pension liability 21,847-1,712 20, Long-term liabilities $ 83,635 $ 5,600 $ 12,477 $ 76,758 $ 3,797 (a) The addition in special obligation bonds represents the current year accreted value increase on the 1992 Capital Appreciation Bonds. (b) The beginning balance has been restated for the addition of the net pension liability in conjunction with the implementation of Governmental Accounting Standards Board Statement No. 68. Annual debt service requirements for Governmental Activities as of September 30, 2015, are as follows: Governmental Activities Fiscal General Obligation Bonds Special Obligation Bonds Loans Payable Year Principal Interest Principal Interest Principal Interest Total 2016 $ 1,269,354 $ 1,546,357 $ 4,202,267 $ 1,255,828 $ 390,000 $ 39,225 $ 8,703, ,316,010 1,495,388 4,296,401 1,293, ,000 22,000 8,693, ,377,927 1,440,646 1,197, , ,000 11,200 5,277, ,430,116 1,385,657 1,262, , ,979, ,487,587 1,328,586 1,325, , ,970, ,410,701 5,659,965 7,772,117 2,847, ,690, ,891,751 3,550,156 1,705,000 1,362, ,509, ,625,000 1,691,438 2,050, , ,080, ,990, , ,000 70, ,251,602 Total $ 38,798,446 $ 18,308,893 $ 24,791,622 $ 10,244,417 $ 940,000 $ 72,425 $ 93,155,803 Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included in the totals for governmental activities. For the governmental activities, compensated absences are liquidated by the General Benefits and Insurance Internal Service Fund. This fund is reimbursed through payroll charges to the City s governmental funds where the employee vacation benefits are earned. The net OPEB obligation has been liquidated by the General Fund and Internal Service Funds. Since 100% of annual pension costs are contributed each year, there are no net pension obligations to liquidate. 74

91 Notes to the Financial Statements September 30, 2015 Annual debt service requirements for Business-Type Activities as of September 30, 2015, are as follows: Business-Type Activities Fiscal Year Principal Revenue Bonds Interest Total 2016 $ 3,145,000 $ 2,412,622 $ 5,557, ,310,000 2,399,246 4,709, ,175,000 2,314,741 4,489, ,260,000 2,228,693 4,488, ,350,000 2,137,626 4,487, ,525,000 9,110,811 21,635, ,570,000 6,693,713 15,263, ,660,000 4,787,363 12,447, ,170,000 2,434,574 11,604, ,865, ,669 3,974,669 Total $ 54,030,000 $ 34,629,058 $ 88,659,058 Future Revenues that are Pledged The City has pledged future revenue sources for various debt issues. The following table provides a summary of the pledged revenues for the City s outstanding debt issues: Business-Type Governmental Activities Activities Tax Increment Penny Sales Water & Sewer Source of Revenue Pledged Revenue Tax Net Revenue Revenue Pledged Thru 11/1/ /1/ /1/2040 Total Principal and Interest Outstanding $6,686,902 $28,349,136 $88,659,058 Current Year Principal and Interest Paid 3,138,097 2,190,415 6,598,850 Current Year Revenue 7,790,943 7,306,401 20,022,387 Description of Debt Series 1992 and 2009 Special Obligation Bonds Purpose of Debt Refund 1988 and 1989 Special Obligation Bonds/Parking Facility Series 2009 and 2010 Special Obligation Bonds Land and Capital Improvements Water & Sewer Utility Revenue Bonds issued Construction and Refunding Bonds Debt Coverage Defeased Debt The City has defeased certain bonds by placing the proceeds of new bonds in irrevocable trust accounts to provide for all future debt service payments on the old bonds. All such defeasements have been in prior years. The assets of the trust accounts and the liability for the defeased bonds are not included in the City s financial statements. On September 30, 2015, outstanding bonds which are considered defeased in substance were: Governmental Activities: General Obligation Bonds Series 2007 $ 34,590,000 Business-type Activities: Water & Sewer Revenue Bonds Series 2005 $ 5,055,000 General Obligation Refunding Bonds Series 2015 On May 5, 2015, the City issued $33,855,000 of general obligation refunding bonds with an average interest rate of 3.84%. The bonds were issued for the purpose of providing funds, together with other legally available funds, to (i) advance refund all of the City s General Obligation Bonds, Series 2007 maturing on and after July 1, 2018, and (ii) paying certain costs and expenses relating to the issuance of the bonds. The City in effect will reduce its aggregate debt service payments by $5,004,535 over the next 22 years 75

92 Notes to the Financial Statements September 30, 2015 and obtain an economic gain (difference between the present value of the old and new debt service payments) of $3,214,592. Water and Sewer Revenue Refunding Bonds Series 2015 On July 23, 2015, the City issued $4,730,000 of water and sewer refunding bonds with an average interest rate of 2.31%. The bonds were issued for the purpose of providing funds, to (i) advance refund all of the City s Water and Sewer Revenue Bonds, Series 2005 maturing on and after October 1, 2015, and (ii) paying certain costs and expenses relating to the issuance of the bonds. The City in effect will reduce its aggregate debt service payments by $426,730 over the next 10 years and obtain an economic gain (difference between the present value of the old and new debt service payments) of $373,455. NOTE 8 - COMPLIANCE WITH RATE COVENANT AND OTHER PROVISIONS Water and Sewer Revenue Bonds The Water and Sewer System Revenue Bond Resolution contains the provision that rates and charges for water and sewer service shall be adjusted as it shall appear necessary, so that the net revenues will be sufficient to provide an amount in each fiscal year at least equal to the greater of: (i) 100% of all amounts required to be deposited to the Bond Service, Redemption, Reserve, Renewal, Replacement and Improvement, and the General Reserve Accounts pursuant to clauses (a), (b), (c), (d) and (e) of Section 505 of the Bond Resolution for the then current fiscal year, or (ii) 125% of the maximum principal and interest requirements for any future fiscal year. The net revenues generated by the Water and Sewer System are sufficient to satisfy the above rate coverage requirement. The Administration of the City believes that it is in full compliance with Section 708 and all other covenants of the Water and Sewer System Revenue Bond Resolution. Water and Sewer System Revenue Bond Resolution The following is a synopsis of the terms of the Water and Sewer System Revenue Bond Resolution which describes the various accounts required to be established; the extent to which use of cash therein is restricted for the benefit of the bondholders; the sequence in which specified amounts of cash from net income are to be transferred into such accounts; special reserve subaccounts to be established within given accounts and the limitations on amounts required to be accumulated; and investment authorizations and related restrictions. The accounts established are listed as follows: Revenue Account - All revenues of the system are collected by the City and deposited as received into a depository to the credit of the Revenue Account. Interest and Sinking Account - All debt service requirements are recorded in this account. Three separate subaccounts designated the Bond Service Account, Redemption Account and Reserve Account are established to further delineate the exact purpose of said monies. Renewal, Replacement and Improvement Account - For paying the cost of unusual or extraordinary maintenance or repairs, the cost of renewals and replacements, the cost of acquiring, installing or replacing equipment, the cost of improvements and providing for the local share of any Federal or State assistance program. General Reserve Account - To pay the cost of improvements, to pay the cost of purchasing or redeeming bonds, to pay the principal and interest on any obligations subordinate to the bonds issued under the resolution, to make up any deficiencies in any of the Accounts and to pay the cost of any item qualifying as an expenditure of the Renewal, Replacement and Improvement Account. Flow of Cash from Net Revenues - The Finance Director shall, on or before the 20th day of each month, withdraw the balance remaining in the Revenue Account, less an amount to be held for the payment of current expenses, and deposit the sum withdrawn to the credit of the following accounts in said order: 76

93 Notes to the Financial Statements September 30, 2015 (a) to the Bond Service Account, one-sixth of the amount of interest payable on the bonds of each series on the next interest payment date and one-twelfth of the next maturing installment of principal on all serial bonds outstanding; (b) to the Redemption Account, one-twelfth of the next maturing installment of principal on all term bonds outstanding; (c) to the Reserve Account, such amount, if any, of any balance remaining, equal to the Reserve Account requirement which shall mean the maximum principal and interest coming due in the current or any subsequent fiscal year; provided, however, that the amount so deposited in respect of a deficiency in the Reserve Account upon any monthly withdrawal from the Revenue Account need not exceed one-sixtieth (1/60th) of the Reserve Account requirement; (d) to the credit of Renewal, Replacement and Improvement Account, such amount, if any, of any balance remaining; provided that the amount deposited to the credit of said account in each month shall not be less than an amount equal to one-twelfth of eight per centum (1/12 of 8%) of the revenues for the preceding fiscal year if at the time of such deposit the unencumbered balance of said account is less than $1,000,000; and provided further that the City Commission by resolution may establish maximum deposits to the credit of the Renewal, Replacement and Improvement Account for a period of time necessary to insure a regular flow of deposits to the General Reserve Account for the purpose of said Account; (e) to the General Reserve Account, the balance, if any, remaining after making the deposits under clauses (a), (b), (c) and (d) above; provided, however, the amount of net impact fees will be deposited to an impact fee subaccount within the General Reserve Account. If the amount deposited in any month to the credit of any of the accounts shall be less than the amount required to be deposited under the foregoing provision of this section, the requirement, therefore, shall nevertheless be cumulative and the amount of any deficiency in any month shall be added to the amount otherwise required to be deposited in each month thereafter until such time as all such deficiencies have been made up. Security for Deposits - All monies deposited with a depository shall be held in trust and guaranteed by the Federal Deposit Insurance Corporation or other Federal Agencies and any monies in excess of said guarantee shall be secured by setting aside government obligations or other marketable securities, with the approval of the Finance Director, having a market value not less than the amount of such deposits, or in such other manner as permitted by applicable State of Florida or federal laws. Investments - Monies held for the credit of the various accounts are invested and reinvested by the Finance Director as follows: Construction, revenue, bond service, redemption, reserve, renewal, replacement and improvement and general reserve accounts: investment obligations or time deposits which mature or are subject to redemption not later than the dates that monies held for the credit of these accounts are required for the purposes intended. However, investments for the Reserve Account are subject to redemption not later than the date of maturity of the bonds issued. 77

94 Notes to the Financial Statements September 30, 2015 NOTE 9 - RESTRICTED ASSETS The balances of restricted asset accounts in the enterprise funds at September 30, 2015, are as follows: Water and Sewer Revenue Account - Customer deposits $ 1,140,809 Interest & Sinking Account 7,573,147 Construction Accounts 8,406,895 17,120,851 Solid Waste Customer deposits 10,924 Total $ 17,131,775 NOTE 10 - SELF-INSURANCE PROGRAMS The City s self-insurance programs are accounted for as an Internal Service Fund, which was established to account for and finance its uninsured risks of loss. All funds of the City participate in the program and make payments to the General Benefits and Insurance Fund. Fund revenues are primarily contributions from other funds for amounts needed to pay insurance premiums, anticipated self-insured losses and administrative expenses. Group Health is a plan providing medical and dental coverage for employees and retirees. The employee s health benefits are accounted for in the General Benefits and Insurance Internal Service Fund. The retiree health benefits are partially funded and accounted for in the OPEB Trust Fund. The total claims liability of $3,238,321 at September 30, 2015, includes $1,880,231 for workers compensation, $1,033,078 for group health, $290,012 for police liability and $35,000 for general liability. This claims liability is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for unpaid claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated annually to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs), and other economic and social factors. The City is self-insured for the following types of risk exposures which are limited by insurance coverage as noted: General and Automotive Liability - The City is fully self-insured for general and automotive liability coverage and is relying on state statutes, which limit damage awards against state and local governments to $200,000 per claim and $300,000 per occurrence. However, there have been specific instances when the state legislature has overridden the statutes. Group Health - The City provides employees/retirees medical and dental coverage through a self-funded health plan. The City is self-insured for health claims on a per individual basis up to $250,000 annually. The City has insurance coverage for claims in excess of $250,000. Workers Compensation - The City is self-insured for workers compensation claims on a per occurrence basis up to $500,000. The City has insurance coverage for claims in excess of $500,000. Law Enforcement Death Benefit - This program provides a maximum benefit of $198,669 for law enforcement that are intentionally killed as a consequence of performing their duties. The City is fully selfinsured for this benefit. 78

95 Notes to the Financial Statements September 30, 2015 Police Liability - This program provides indemnification to police officers while acting on behalf of the City. The City is partially self-insured on a per claim basis up to $25,000 and for amounts in excess of $1,000,000. The City has insurance coverage for claims between these two limits. The claims liability accrued at September 30, 2015, for the self-insurance programs do not include automotive liability and law enforcement death benefit. The City obtains an annual actuarial review on its group health, workers compensation, general liability and police liability self-insurance programs. Although the level of funding for some of the City s selfinsurance programs have not been based upon actuarial computations, the actuarial reviews verified that the programs are adequately funded. Changes in claims liability amounts were as follows: General Benefits and Insurance Fund OPEB Trust Fund Year ended Year ended Year ended Year ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 Unpaid claims, beginning of year $ 2,778,268 $ 2,719,884 $ 436,904 $ 506,268 Incurred claims (including IBNRs) 6,086,412 8,504,162 7,669,443 6,868,926 Claim payments (6,207,300) (8,445,778) (7,525,406) (6,938,290) Unpaid claims, end of year $ 2,657,380 $ 2,778,268 $ 580,941 $ 436,904 The City purchases commercial insurance for property damage. There were no significant reductions in coverage from prior year. There were no settlements of property damage claims in excess of insurance coverage in each of the past three years. NOTE 11 - COMMITMENTS Construction/consulting commitments The City has active construction and other projects as of September 30, At year end the City s commitments with contractors and consultants are as follows: Spent Remaining to-date Commitment Governmental Activities: First Street Streetscape $ 332,518 $ 1,911,366 Street Resurfacing 70,132 1,944,723 Total $ 402,650 $ 3,856,089 Business-type Activities: Lift Stations $ 1,577,633 $ 1,873,567 Refuse Vehicles - 519,514 Total $ 1,577,633 $ 2,393,081 Encumbrances The City uses encumbrances to control expenditure commitments for the year and to enhance cash management. Encumbrances represent commitments related to contracts not yet performed and purchase orders not yet filled (executory contracts; and open purchase orders). Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations. Encumbrances still open at year-end are not accounted for as expenditures and liabilities but, rather, as restricted, committed, or assigned governmental fund balance. As of September 30, 2015, total governmental fund encumbrance balances for the City are as follows: 79

96 Notes to the Financial Statements September 30, 2015 General Fund $ 347,579 Penny Sales Tax 1,912,346 Community Redevelopment 2,184,631 Housing and Community Development 87,539 Nonmajor Governmental Funds 1,414,585 Total $ 5,946,680 Operating Leases There are no commitments under operating lease agreements for equipment and building during the next fiscal year. Interlocal Agreement Fire/EMS Services On November 21, 1995, the City entered into an agreement with Sarasota County for the consolidation of fire, communications and emergency medical services. The City and Sarasota County are mutually interested in providing professional fire, emergency medical service (EMS) protection, emergency communications for the dispatch of law enforcement, fire emergency management personnel, and other services to the citizens and properties within their respective jurisdictions. The common objective is to improve efficiency and technical capability while reducing the overall cost of such services to the citizenry. The County is responsible for operating and maintaining the Fire/EMS facilities. All facilities and improvements shall remain the property of the City and the City will continue to pay debt service on the facilities and properties with certain limitations. The City and County entered into a new agreement effective October 1, 2003, that remains in effect until September 30, The agreement will renew automatically for successive additional periods of twenty years. Either party may terminate this agreement with at least 365 days written notice during the following time periods: from August 1, 2018, to September 30, The new agreement provides for the City to pay to the Firefighters Pension Plan the lesser amount of the monies equivalent to the sum total of the Share Distribution paid to firefighters and the surviving spouse of firefighters that retired prior to January 1, 1996, or the required Employer s annual contribution to that plan. In addition, the City agrees each fiscal year to pay to the Firefighters Pension Plan the lesser amount of either $500,000 or the amount of the required Employer s annual contributions, less the amount of the City s payment to fund the Share Distribution in excess of $1,700,000. In addition, each fiscal year for which the required Employer s annual contribution, less the amount of the City s payment to fund the Share Distribution, exceeds $2,200,000, the County and City shall pay to the Firefighters Pension Plan monies equivalent to the amount of the excess as follows: 65% by the County and 35% by the City. For the current fiscal year the required contribution from the City was $2,858,623. Sports Complex Interlocal Agreement The City owned a Major League Baseball (MLB) spring training complex which was accounted for as an enterprise fund. The sports complex had been used for MLB spring training since it was completed in The sports complex required substantial renovation in order to attract a MLB team to conduct spring training at the facility. The City transferred ownership of the sports complex to the County for one dollar on November 10, In addition, the City provided the County with $9,753,524 that was used for the renovation of the stadium. This funding came from grant funds and the proceeds of bonds issued by the City. Funding for the bond principal and interest payments will come from a Florida Office of Tourism, Trade and Economic Development grant. The County has entered into a 30 year lease agreement with the Baltimore Orioles Major League Baseball team to use the sports complex as its spring training site. The County and the Baltimore Orioles designed and completed a substantial renovation to the sports complex. The City will have no further obligation to provide funding for the operation, maintenance or capital repairs and improvements while the sports complex is under County ownership. The County shall have the obligation to transfer ownership of the sports complex back to the City in the event that: (1) Major League spring training activities at the sports complex are discontinued by the Baltimore Orioles for a period of two years and no other MLB club agrees to use the sports complex for spring training activities, and (2) the County has repaid any and all debt issued in connection with the 80

97 Notes to the Financial Statements September 30, 2015 substantial renovation of the sports complex or any future capital repair or improvement; provided, however, that the County shall not issue debt having payment obligations that extend beyond the term of the lease, or any lease extension, between the County and the Baltimore Orioles. In order to effectuate this obligation the City must first notify the County in writing that it is of the opinion that the two above-described events have occurred, including a demand that ownership of the sports complex be transferred back to the City. The purchase price to be paid by the City to the County at the time of transfer shall be one dollar. Upon transfer of the sports complex back to the City, the sports complex shall be used for public recreational or other public use. In the event that the City desires to make the sports complex available for non-public uses the County shall have the option to purchase or lease the sports complex from the City. If the sports complex is purchased, the purchase price to be paid by the County to the City at the time of transfer shall be the appraised value of the sports complex land exclusive of the value of the improvements, assuming its use as a publicly owned sports complex. If the sports complex is leased, the rent to be paid by the County to the City shall be established on the basis that is a land lease only and shall exclude the value of the improvements. NOTE 12 - CONTINGENCIES Grant Programs Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. Water and Sewer System Lift Station 87 In late 2005, the City determined to construct a new lift station (Lift Station 87) serving the City s sewage system to replace an existing lift station. The project also entailed the installation of new gravity collection piping utilizing a tunneling process known as micro-tunneling. An outside engineering firm, AECOM Technical Services Inc., was hired in 2008 to design the system and the City contracted with Westra Construction to build the lift station and install the collection lines. Work began on the project in The new lift station was substantially completed but there were significant problems encountered with the microtunneling operation. Later it was discovered that AECOM had set the elevation of the piping too shallow as it approached the Osprey Avenue bridge crossing of Hudson Bayou. The City terminated AECOM after it failed to timely produce a solution to the micro-tunneling problems and the pipe elevation issue. Costs incurred to date total $11,239,947, which includes $2,602,714 for engineering, $7,226,920 for construction, and $1,410,313 for capitalized interest. This amount less $950,000 for repurposed was written off in the 2015 year. A new engineering firm (McKim & Creed) was contracted by the City to determine a solution to the problems encountered on the project and to design a solution to bring Lift Station 87 into operation. Although solutions were proposed and a preliminary design direction was proposed by McKim & Creed, it was determined by the City that further investigation needed to be undertaken at the Osprey Avenue bridge crossing to assure that running piping under that bridge at various elevations was indeed feasible. That investigation was completed by March of 2015, at which point final design decisions were made on how best to complete the project. There will be building costs associated with the construction of the Lift Station building. As of September 30, 2015, the actual method and cost of the demolition has not been determined or accrued. Water and Sewer System Litigation Arising From Lift Station 87 Westra Construction Corp. was the general contractor on the City s Lift Station 87 project, which was comprised of the construction of Lift Station 87 and the installation of related sewer lines and pumping equipment. The job was halted in midstream, redesigned and is now out for bid for completion. Westra sued the City and is seeking in the range of $9.5 million for delay and disruption, lost profit and lost opportunity. It is our view that not only is Westra s claim substantially inflated, but it is subject to meritorious defenses. In the event that Westra is successful in proving its claim, it is our view that most if not all of the financial 81

98 Notes to the Financial Statements September 30, 2015 responsibility can be passed on to the City s engineers on the job, AECOM Technical Services Inc. The City is currently suing AECOM for breach of contract and professional malpractice seeking, among other damages, the recovery of whatever the City may be obliged to pay Westra. The City is suing AECOM for substantial damages incurred by the City due to failures in the design of the Lift Station 87 project by AECOM. AECOM has counterclaimed against the City in that action seeking $105,572 for its last invoice on the project and unspecified damages for wrongful termination. It is our view that the $105,572 is not due because among other reasons the time spent was for unsuccessful attempts to correct errors by AECOM, which time is not compensable under the City s contract with AECOM. We believe that AECOM was not wrongfully terminated so there is no exposure for the City under the wrongful termination count. If AECOM is successful in proving its claims, it is our view that any amount awarded would be dwarfed by the amount that would be awarded the City against AECOM for its breach of contract and professional malpractice. The cases described above have been consolidated for trial. It is expected that all claims will be mediated in the summer of The likelihood is that all claims will be resolved in mediation. If not, the consolidated cases will proceed to trial either during the last quarter of 2017 or the first half of Other The City is engaged in numerous other legal actions alleging damages as a result of acts or omissions of the City, its officers, agents or employees with a potential liability of up to $1,000,000. The administration of the City believes that the ultimate outcome will not have a material adverse effect on the City. NOTE 13 DEFINED BENEFIT RETIREMENT PLANS The City maintains three defined benefit, public employee retirement plans. Assets are held separately and may be used only for the payment of benefits to the members and administrative expenses of the respective plans. The Plans are administered by a separate Board of Trustees. The City Commission approves all plan provisions and amendments. Each Plan s financial statements are prepared using the accrual basis of accounting. Employee and employer contributions are recognized as revenues when due and a formal commitment to provide contributions has been made. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. The Plans issue financial reports that include financial statements and required supplementary information. The pension plan s fiduciary net position in the City s annual financial report has been determined on the same basis used in the pension plan s stand-alone financial reports. The reports may be obtained from the City of Sarasota City Auditor and Clerk. For the current year, the General Employees', Police Officers' and Firefighters' Defined Benefit Pension Plans implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions. In addition to other disclosures, the GASB requires the following schedules be included in the Required Supplementary Information section of this report: A 10-year schedule of changes in the net pension liability, A 10-year schedule of contributions, and A 10-year schedule of the annual money-weighted rate of return on pension plan investments. Until a full 10-year trend is compiled, the Plans will present information for those years for which information is available. A. General Employees Defined Benefit Pension Plan Plan administration. The City of Sarasota General Employees Defined Benefit Pension Plan, a defined benefit single-employer public employee retirement plan, is administered by the Plan s Board of Trustees in accordance with Chapter 24, Article II, of the Sarasota City Code, 1986, as restated on November 16, The Plan s Board of Trustees consists of the City Auditor and Clerk, the Finance Director, four (4) members of the Plan, and a trustee who is a legal resident of the City and appointed by the City Commission. 82

99 Notes to the Financial Statements September 30, 2015 Plan membership. The Plan is closed to new members. At September 30, 2015, membership consisted of the following: Inactive plan members or beneficiaries currently receiving benefits 415 Inactive plan members entitled to but not yet receiving benefits 20 Active plan members 226 Total 661 Benefits provided. The Plan covers permanent, probationary and full time City of Sarasota employees who are not members of the Police Officers or Firefighters Pension Plans and were hired prior to September 7, The Plan also covers some previous City employees that became Sarasota County employees through consolidation. Members may retire as early as age 55 with 10 years of service. Such a retiree would receive a retirement benefit based upon a percentage of average annual earnings during the highest 3 years of the last 10 years of employment prior to the date of retirement multiplied by the years of service. The retirement benefit percentage increases based upon the retiree s age up to a maximum of 2.5% at age 65, or after 30 years of service regardless of age. The Plan provides disability benefits as if the participant retired at age 65, providing that 10 years of credited service has been attained. If an employee separates service from the City before achieving 10 years of credited service, the employee will receive his contributions plus 4.5 percent interest compounded annually. Contributions. Plan members are required to contribute 6 percent of their annual pay to the Plan and the City and County contribution must be at least 8 percent of annual payroll. The Plan s Board of Trustees has elected to change to a dollar-based contribution determination method, therefore $6,011,590 is required to be contributed by the City and County for the fiscal year ending September 30, The actuarially determined City & County contribution is the estimated amount necessary to finance the costs of benefits earned by plan members during the year, with an additional amount to finance any unfunded accrued liability. During the year ending September 30, 2015, contributions were made in accordance with contribution requirements determined by an actuarial valuation of the Plan as of September 30, Contributions totaling $6,802,599 were from the following sources; the City and County contributed $6,011,590, and plan members contributed $791,009. Deferred retirement option plan. Effective November 20, 2000, the City approved an ordinance creating a deferred retirement option plan (DROP). In lieu of terminating employment, any member may elect to defer receipt of such service retirement pension and to participate in the DROP. A member s participation in the DROP may not exceed sixty months beginning at the time the election becomes effective. A member may participate only once. An account is established for each member participating in the DROP. The member s DROP account consists of the monthly retirement benefit the member would have received had they terminated their employment and the earnings on those amounts. The accounts of members that entered the DROP prior to December 28, 2011, will be credited with interest at an effective rate of six and one-half (6 ½) percent per annum compounded quarterly. The accounts of members that entered the DROP on or after December 28, 2011, will be credited with interest at an effective rate of two (2) percent per annum compounded quarterly. The accrued benefit at September 30, 2015, was $980,832 and is included in net position restricted for pensions. Investment policy. All investments of the Plan must be consistent with the investment policy adopted by the Plan s Board of Trustees. The policy is structured to maximize the financial return to the Plan consistent with the risks incumbent in each investment and is structured to establish and maintain an appropriate diversification of the Plan s assets. Investments of the Plan are comprised of money market funds, U.S. Government securities, U.S. Government agency securities, common and preferred stocks, corporate bonds and notes, real estate funds, and foreign stocks as authorized by Plan policies. The investments as of September 30, 2015, for the Plan are reported in Note 3 on pages XX through XX. Rate of return. For the year ended September 30, 2015, the annual money-weighted rate of return on Plan investments, net of Plan investment expense was percent. The money-weighted rate of return 83

100 Notes to the Financial Statements September 30, 2015 expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Actuarial assumptions. The total pension liability, net pension liability, and certain sensitivity information are based on an actuarial valuation performed as of September 30, The September 30, 2013 and 2014 total pension liability were based on the following actuarial methods and assumptions: Inflation 2.3% Salary increases 4.8% to 7.2% depending on service, including inflation Investment rate of return 7.0%, net of pension plan investment expense Mortality rates were based on the RP-2000 Combined Healthy Participant Mortality Table for males and females with future mortality improvement projected from 2000 to all future years using Scale AA. The actuarial assumptions used in the September 30, 2014, valuation were based on the results of an actuarial experience study for the period October 1, 2013 to September 30, The long-term expected rate of return on 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 Plan investment expense) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Plan s target asset allocation as of September 30, 2015 (see the discussion of the Plan s investment policy) are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Domestic equity 55% 7.81% Fixed income International equity Real estate Discount rate. A single discount rate of 7.0% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on Plan investments of 7.0%. The projection of cash flows used to determine this single discount rate assumed that plan members contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the 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 Plan investments (7.0%) was applied to all periods of projected benefit payments to determine the total pension liability. The single discount rate was developed as follows: Single discount rate 7.00% Long-term expected rate of return 7.00% Long-term municipal bond rate * 4.11% Last year ending September 30 in the 2015 to 2114 projection period for which projected benefit payments are fully funded 2114 * Source: State & local bonds rate from the Federal Reserve statistical release (H.15) as of September 25, The statistical release describes this rate as Bond Buyer Index, general obligation, 20 years to maturity, mixed quality. In describing this index, the Bond Buyer notes that the bonds average credit quality is roughly equivalent to Moody s Investors Service s Aa2 rating and Standard & Poor s AA rating. 84

101 Notes to the Financial Statements September 30, 2015 Sensitivity of the net pension liability to changes in the discount rate. The following presents the Plan s net pension liability, calculated using a single discount rate of 7.0%, as well as what the Plan s net pension liability would be if it were calculated using a single discount rate that is one percentage-point lower or one percentage-point higher: 1.0% Current 1.0% Decrease Discount Increase (6.0%) Rate (7.0%) (8.0%) Net pension liability $ 64,075,831 $ 43,099,399 $ 25,428,083 Changes in the Net Pension Liability - The changes in Net Pension Liability for the General Employees Defined Benefit Pension Plan are as follows: Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability / (Asset) Balance at September 30, 2013 $ 177,625,424 $ 130,861,234 $ 46,764,190 Changes for the year: Service cost 2,036, ,036,380 Interest on the total pension liability 12,150, ,150,963 Differences between expected and actual experience 74, ,622 Changes of assumptions 1,949, ,949,249 Contributions from the employer -- 6,011,590 (6,011,590) Contributions from employees ,009 (791,009) Net investment income -- 13,236,828 (13,236,828) Administrative expenses -- (166,043) 166,043 Other -- 2,621 (2,621) Benefit payments, including refunds of employee contributions (10,082,435) (10,082,435) -- Net changes 6,128,779 9,793,570 (3,664,791) Balance at September 30, 2014 $ 183,754,203 $ 140,654,804 $ 43,099,399 Net pension liability. The net pension liability is measured as the total pension liability, less the amount of the pension plan s fiduciary net position. In actuarial terms, this will be the accrued liability less the market value of assets (not the smoother actuarial value of assets that is often encountered in actuarial valuations performed to determine the employer s contribution requirement). The net pension liability was measured as of September 30, 2014, using an actuarial valuation date of September 30, The components of the net pension liability at September 30, 2014, were as follows: Total pension liability $ 183,754,203 Plan fiduciary net position 140,654,804 Net pension liability $ 43,099,399 Plan fiduciary net position as a percentage of the total pension liability 76.55% Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2015, the City will recognize pension expense of $4,490,954 for the General Employees Defined Benefit Pension Plan (GEDBPP). At September 30, 2015, the City has deferred outflows and deferred inflows of resources related to the GEDBPP as follows: 85

102 Notes to the Financial Statements September 30, 2015 Deferred Outflows Deferred inflows of Resources of Resources Difference between expected and actual experience $ 40,240 $ -- Changes in assumptions 1,051, Contributions to the pension plan subsequent to the measurement date 6,141, Net difference between projected and actual earnings on pension plan investments -- 3,357,645 Total $ 7,233,299 $ 3,357,645 $6,141,916 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended September 30, Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Deferred Outflows/(Inflows Year Ended September 30, of Resources 2016 $ 93, (680,516) 2018 (839,141) 2019 (839,412) B. Firefighters Defined Benefit Pension Plan Plan administration. The City of Sarasota Firefighters Defined Benefit Pension Plan, a defined benefit costsharing multiple employer public employee retirement plan, is administered in accordance with Chapter 24, Article II, of the Sarasota City Code, 1986, as restated on November 16, On January 1, 1996, the City s Fire/Rescue Department was consolidated with Sarasota County, as such the Plan is closed to new entrants. The Plan remains intact with Sarasota County and the City of Sarasota making the employer contributions. Plan membership. The Plan is closed to new members. At September 30, 2015, membership consisted of the following: Inactive plan members or beneficiaries currently receiving benefits 163 Inactive plan members entitled to but not yet receiving benefits 1 Active plan members 9 Total 173 Benefits provided. The Plan covers former City of Sarasota firefighters who are employed by Sarasota County as a result of the consolidation. Any Plan member who has creditable service of 10 years and has attained age 50 or has creditable service of 25 years, regardless of age, is eligible for normal retirement. Such a retiree would receive a normal retirement benefit of 3 percent of average annual earnings during the highest 3 years of service during the last 10 years of service multiplied by the years of service. The pension benefit cannot exceed the average taxable earnings for the last 3 years of employment. The Plan provides disability benefits for both duty related and not duty related disabilities. Disability caused by performance of duties is computed at 3 percent of average compensation multiplied by years of service (minimum 25 years), and, at all times, must be equal to at least fifty percent of the base salary for a journeyman fire medic top step. A not in line of duty disability is computed at 2.5 percent of average compensation multiplied by years of service plus 5 percent of the firefighter s last monthly salary for each eligible child. 86

103 Notes to the Financial Statements September 30, 2015 The Plan provides death benefits for both duty related and not duty related deaths. Death caused by performance of duties is computed at two-thirds of 3 percent of average compensation multiplied by the years of service (minimum 25 years) plus 5 percent of the firefighters last monthly salary for each eligible child. A not in line of duty death is computed at two-thirds of 2.5 percent of average compensation multiplied by years of service plus 5 percent of the firefighters last monthly salary for each eligible child. Contributions. Plan members are required to contribute 8 percent of their annual salary to the Plan. Other contributions are received from the State of Florida, Sarasota County and the City. The State of Florida contribution results from the City s share of insurance tax. The County of Sarasota and the City contribute an amount to make the fund actuarially sound. For 2015, Sarasota County contributed $6,302,192 (67%) and the City of Sarasota contributed $3,104,064 (33%). These contributions include the contributions from the State of Florida. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations. The State of Florida makes contributions from taxes on casualty insurance premiums. The City recognized its portion of these on-behalf payments from the State as revenue and personnel expenditures in the City s General Fund before they were recorded as contributions in the Firefighters Pension Plan. Investment policy. All investments of the Plan must be consistent with the investment policy adopted by the Plan s Board of Trustees. The policy is structured to maximize the financial return to the Plan consistent with the risks incumbent in each investment and is structured to establish and maintain an appropriate diversification of the Plan s assets. Investments of the Plan are comprised of money market funds, U.S. Government securities, U.S. Government agency securities, municipal securities, common stock, corporate bonds and notes, real estate funds, and foreign stocks as authorized by Plan policies. The investments as of September 30, 2015, for the Plan are reported in Note 3 on pages XX through XX. Rate of return. For the year ended September 30, 2015, the annual money-weighted rate of return on Plan investments, net of Plan investment expense was percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Actuarial assumptions. The total pension liability, net pension liability, and certain sensitivity information are based on an actuarial valuation performed as of September 30, The September 30, 2013 and 2014 total pension liability were based on the following actuarial methods and assumptions: Inflation 3.75% Salary increases 3.75% to 6.75% including inflation Investment rate of return 7.25% The net pension liability was measured as of September 30, 2014, using an actuarial valuation date as of September 30, The net pension liability has been proportioned between the City of Sarasota and Sarasota County based upon actual 2015 fiscal year contributions. The City portion is 33% and the County portion is 67%. There has been no change in the proportion since the prior measurement date. Mortality rates were based on the RP-2000 Mortality Table for males and females. There is no provision for future mortality improvement. The actuarial assumptions used in the September 30, 2014, valuation were based on the results of an actuarial experience study for the period October 1, 2013 to September 30, The long-term expected rate of return on 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 Plan investment expense) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Plan s target asset allocation as of September 30, 2015 (see the discussion of the Plan s investment policy) are summarized in the following table: 87

104 Notes to the Financial Statements September 30, 2015 Target Long-Term Expected Asset Class Allocation Real Rate of Return Domestic equity 50.0% 0.00% Fixed income International equity Real estate Master limited partnerships Discount rate. A single discount rate of 7.25% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on Plan investments of 7.25%. The projection of cash flows used to determine this single discount rate assumed that plan members contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the 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 Plan investments (7.25%) was applied to all periods of projected benefit payments to determine the total pension liability. The single discount rate was developed as follows: Single discount rate 7.25% Long-term expected rate of return 7.25% Long-term municipal bond rate * 4.11% Last year ending September 30 in the 2015 to 2114 projection period for which projected benefit payments are fully funded 2114 * Source: State & local bonds rate from the Federal Reserve statistical release (H.15) as of September 25, The statistical release describes this rate as Bond Buyer Index, general obligation, 20 years to maturity, mixed quality. In describing this index, the Bond Buyer notes that the bonds average credit quality is roughly equivalent to Moody s Investors Service s Aa2 rating and Standard & Poor s AA rating. Sensitivity of the net pension liability to changes in the discount rate. The following presents the Plan s net pension liability, calculated using a single discount rate of 7.25%, as well as what the Plan s net pension liability would be if it were calculated using a single discount rate that is one percentage-point lower or one percentage-point higher: Net Pension Liability 1.0% Current 1.0% Decrease Discount Increase Employer (6.25%) Rate (7.25%) (8.25%) City of Sarasota $ 16,317,867 $ 10,079,433 $ 4,892,595 Sarasota County 33,130,214 20,464,304 9,933,450 Total $ 49,448,081 $ 30,543,737 $ 14,826,045 88

105 Notes to the Financial Statements September 30, 2015 Changes in the Net Pension Liability - The changes in Net Pension Liability for the Firefighters Defined Benefit Pension Plan are as follows: Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability / (Asset) Balance at September 30, 2013 $ 159,447,508 $ 123,533,392 $ 35,914,116 Changes for the year: Service cost 331, ,515 Interest on the total pension liability 11,538, ,538,343 Differences between expected and actual experience 1,072, ,072,137 Changes of assumptions 4,198, ,198,868 Contributions from the employer/state -- 9,406,256 (9,406,256) Contributions from employees -- 86,248 (86,248) Net investment income -- 13,132,597 (13,132,597) Administrative expenses -- (173,029) 173,029 Other -- 59,170 (59,170) Benefit payments, including refunds of employee contributions (11,537,394) (11,537,394) -- Net changes 5,603,469 10,973,848 (5,370,379) Balance at September 30, 2014 $ 165,050,977 $ 134,507,240 $ 30,543,737 Net pension liability. The net pension liability is measured as the total pension liability, less the amount of the pension plan s fiduciary net position. In actuarial terms, this will be the accrued liability less the market value of assets (not the smoother actuarial value of assets that is often encountered in actuarial valuations performed to determine the employer s contribution requirement). The components of the net pension liability at September 30, 2014, were as follows: City County Total Total pension liability $ 54,466,822 $ 110,584,155 $ 165,050,977 Plan fiduciary net position 44,387,389 90,119, ,507,240 $ 10,079,433 $ 20,464,304 $ 30,543,737 Plan fiduciary net position as a percentage of the total pension liability 81.49% Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2015, the City will recognize pension expense of $2,374,255 for the Firefighters Defined Benefit Pension Plan (FFDBPP). At September 30, 2015, the City has deferred outflows and deferred inflows of resources related to the FFDBPP as follows: Deferred Outflows Deferred inflows of Resources of Resources Contributions to the pension plan subsequent to the measurement date $ 2,811,820 $ -- Net difference between projected and actual earnings on pension plan investments -- 1,042,416 Total $ 2,811,820 $ 1,042,416 89

106 Notes to the Financial Statements September 30, 2015 $2,811,820 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended September 30, Other amounts reported as deferred outflows of resources and deferred inflows of resources of resources related to pensions will be recognized as pension expense as follows: Deferred Outflows/(Inflows Year Ended September 30, of Resources 2016 $ (260,604) 2017 (260,604) 2018 (260,604) 2019 (260,604) C. Police Officers Defined Benefit Pension Plan Plan administration. The City of Sarasota Police Officers Defined Benefit Pension Plan, a defined benefit single-employer public employee retirement plan, is administered by the Plan s Board of Trustees in accordance with Chapter 24, Article II of the Sarasota City Code, 1986, as amended and restated. A member who previously served as a police officer with the City during a period of previous employment and for which period accumulated contributions were withdrawn from the Plan, or a member who served as a police officer for any other municipal, county or state law enforcement department in the United States may purchase other police service time. To purchase other police service time, the police officer must contribute to the Plan, the amount actuarially determined for the time for which he or she is requesting credit, such that the crediting of service does not result in a cost or liability to the Plan. However, the member may not purchase prior police service that is counted for retirement benefits from another pension plan. The purchase of prior police service other than with the City of Sarasota and prior military service combined may not exceed 5 years. In addition, the Plan will accept rollovers of eligible pension accounts solely for the purpose of purchasing credited service. Other updates were made to the Plan pursuant to changes in the Internal Revenue Code regarding Section 415 limitations and eligible rollover provisions. It also provides for compliance with Chapter 185, Florida Statutes to ensure that the Plan will continue to qualify for funding under F.S in the event a change to the statute is effective before the Plan can be amended. Plan membership. At September 30, 2015, membership consisted of the following: Inactive plan members or beneficiaries currently receiving benefits 208 Inactive plan members entitled to but not yet receiving benefits 3 Active plan members 128 Total 339 Benefits provided. The Plan covers permanent and probationary City of Sarasota employees who are classified as uniform police personnel. Any Plan member who has creditable service of 10 years and has attained age 50 or has creditable service of 25 years, regardless of age, is eligible for normal retirement. Such a retiree would receive a normal retirement benefit of 3 percent of average annual earnings during the highest 3 years of service during the last 10 years of service multiplied by the years of service. The pension benefit cannot exceed the average taxable earnings for the last 3 years of employment. The Plan provides disability benefits for both duty related and not duty related disabilities. Disability caused by performance of duties is computed at 3 percent of average compensation multiplied by years of service (minimum 25 years). A not in line of duty disability is computed at 2.5 percent of average compensation multiplied by years of service plus 5 percent of the police officer s last monthly salary for each eligible child. The Plan provides death benefits for both duty related and not duty related deaths. Death caused by performance of duties is computed at two-thirds of 3 percent of average compensation multiplied by the years of service (minimum 25 years) plus 5 percent of the police officer s last monthly salary for each child. A not in line of duty death is computed at two-thirds of 2.5 percent of average compensation multiplied by years of service plus 5 percent of the police officer s last monthly salary for each eligible child. If a police 90

107 Notes to the Financial Statements September 30, 2015 officer is eligible for normal retirement at the time of death, the benefit shall be calculated at a 3% accrual rate. Contributions. Participants are required to contribute 8 percent of their annual salary to the Plan. If an employee separates service from the City before achieving 10 years of credited service, the employee will receive his contributions plus 5 percent regular interest compounded annually. Other contributions are received from the State of Florida and the City. The State of Florida contribution results from the City s share of insurance tax. The City contributes an amount to make the fund actuarially sound, but not less than 8 percent of payroll. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations. The State of Florida makes contributions from taxes on casualty insurance premiums. The City recognized these on-behalf payments from the State as revenue and personnel expenditures in the City s General Fund before they were recorded as contributions in the Police Officers Pension Plan. Deferred retirement option plan. Effective December 21, 1998, the City approved an ordinance creating a deferred retirement option plan (DROP). In lieu of terminating employment as a police officer, any member may elect to defer receipt of such service retirement pension and to participate in the DROP. A member s participation in the DROP may not exceed sixty months beginning at the time the election becomes effective. A member may participate only once. An account is established for each member participating in the DROP. The member s DROP account consists of the monthly retirement benefit the member would have received had they terminated their employment as a police officer and the earnings on those amounts. For members who entered the DROP prior to October 1, 2012, the member elects to receive either interest at a fixed rate of 6.5% per annum, compounded quarterly, or the actual net rate of investment return realized by the Pension Fund. For those who entered the DROP on or after October 1, 2012, the member elects to receive either interest at a fixed interest rate of 2.5% per annum compounded quarterly, or the actual rate of investment return realized by the Pension Fund. The City created an ordinance amending the DROP effective October 18, 2004, and making the election to enter the DROP an irrevocable notice of termination effective at the end of the DROP period. The accrued benefit at September 30, 2014, was $4,908,932 and is included in net position restricted for pensions. Investment policy. All investments of the Plan must be consistent with the investment policy adopted by the Plan s Board of Trustees. The policy is structured to maximize the financial return to the Plan consistent with the risks incumbent in each investment and is structured to establish and maintain an appropriate diversification of the Plan s assets. Investments of the Plan are comprised of money market funds, U.S. Government securities, U.S. Government agency securities, municipal securities, common and preferred stocks, stock mutual funds, bond mutual funds, corporate bonds, real estate mutual funds, and foreign mutual funds as authorized by Plan policies. The investments as of September 30, 2015, for the Plan are reported in Note 3 on pages XX through XX. Rate of return. For the year ended September 30, 2015, the annual money-weighted rate of return on Plan investments, net of Plan investment expense was percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Actuarial assumptions. The total pension liability, net pension liability, and certain sensitivity information are based on an actuarial valuation performed as of September 30, The September 30, 2013 and 2014 total pension liability were based on the following actuarial methods and assumptions: Inflation 2.5% Salary increases 4.9% to 12.7% depending on service, including inflation Investment rate of return 7.0% Mortality rates were based on the RP-2000 Combined Healthy Participant Mortality Table for males and females with future mortality improvement projected from 2000 to all future years using Scale AA. The actuarial assumptions used in the September 30, 2014, valuation were based on the results of an actuarial experience study for the period October 1, 2013 to September 30,

108 Notes to the Financial Statements September 30, 2015 The long-term expected rate of return on 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 Plan investment expense) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Plan s target asset allocation as of September 30, 2015 (see the discussion of the Plan s investment policy) are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Domestic equity 45.0% 0.00% Fixed income International equity Real estate Master limited partnerships Discount rate. A single discount rate of 7.0% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on Plan investments of 7.0%. The projection of cash flows used to determine this single discount rate assumed that plan members contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the 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 Plan investments (7.0%) was applied to all periods of projected benefit payments to determine the total pension liability. The single discount rate was developed as follows: Single discount rate 7.00% Long-term expected rate of return 7.00% Long-term municipal bond rate * 4.11% Last year ending September 30 in the 2015 to 2114 projection period for which projected benefit payments are fully funded 2114 * Source: State & local bonds rate from the Federal Reserve statistical release (H.15) as of September 25, The statistical release describes this rate as Bond Buyer Index, general obligation, 20 years to maturity, mixed quality. In describing this index, the Bond Buyer notes that the bonds average credit quality is roughly equivalent to Moody s Investors Service s Aa2 rating and Standard & Poor s AA rating. Sensitivity of the net pension liability to changes in the discount rate. The following presents the Plan s net pension liability, calculated using a single discount rate of 7.0%, as well as what the Plan s net pension liability would be if it were calculated using a single discount rate that is one percentage-point lower or one percentage-point higher: 1.0% Current 1.0% Decrease Discount Increase (6.0%) Rate (7.0%) (8.0%) Net pension liability $ 75,150,233 $ 42,888,772 $ 16,563,563 92

109 Notes to the Financial Statements September 30, 2015 Changes in the Net Pension Liability - The changes in Net Pension Liability for the Police Officers Defined Benefit Pension Plan are as follows: Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability / (Asset) Balance at September 30, 2013 $ 232,624,191 $ 181,137,540 $ 51,486,651 Changes for the year: Service cost 3,150, ,150,996 Interest on the total pension liability 15,888, ,888,805 Differences between expected and actual experience (838) -- (838) Contributions from the employer/state -- 8,223,214 (8,223,214) Contributions from employees ,571 (760,571) Net investment income -- 18,842,891 (18,842,891) Administrative expenses -- (189,834) 189,834 Benefit payments, including refunds of employee contributions (12,745,932) (12,745,932) -- Net changes 6,293,031 14,890,910 (8,597,879) Balance at September 30, 2014 $ 238,917,222 $ 196,028,450 $ 42,888,772 Net pension liability. The net pension liability is measured as the total pension liability, less the amount of the pension plan s fiduciary net position. In actuarial terms, this will be the accrued liability less the market value of assets (not the smoother actuarial value of assets that is often encountered in actuarial valuations performed to determine the employer s contribution requirement). The net pension liability was measured as of September 30, 2014, using an actuarial valuation date as of September 30, The components of the net pension liability at September 30, 2014, were as follows: Total pension liability $ 238,917,222 Plan fiduciary net position 196,028,450 Net pension liability $ 42,888,772 Plan fiduciary net position as a percentage of the total pension liability 82.05% Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2015, the City will recognize pension expense of $4,667,200 for the Police Officers Defined Benefit Pension Plan (PODBPP). At September 30, 2015, the City has deferred outflows and deferred inflows of resources related to the PODBPP as follows: 93

110 Notes to the Financial Statements September 30, 2015 Deferred Outflows Deferred inflows of Resources of Resources Difference between expected and actual experience $ -- $ 599 Contributions to the pension plan subsequent to the measurement date 8,485, Net difference between projected and actual earnings on pension plan investments -- 5,041,266 Total $ 8,485,541 $ 5,041,865 $8,485,541 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended September 30, Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Deferred Outflows/(Inflows Year Ended September 30, of Resources 2016 $ (1,260,556) 2017 (1,260,556) 2018 (1,260,438) 2019 (1,260,315) D. Summary of All Defined Benefit Pension Plans Totals for the City s single employer and cost-sharing multiple employer pension plans for the 2015 fiscal year are: Defined Benefit Pension Plans General Fire- Police Employees fighters Officers Total Net pension liability $ 43,099,399 $ 10,079,433 $ 42,888,772 $ 96,067,604 Deferred outflows of resources related to pensions 7,233,299 2,811,820 8,485,541 18,530,660 Deferred inflows of resources related to pensions 3,357,645 1,042,416 5,041,865 9,441,926 Pension expense 4,490,954 2,374,255 4,667,200 11,532,409 Note: Includes Governmental Activities, Business-type Activities and the portion allocated to Pension Trust Funds. Totals by funds are as follows: Net Pension Deferred Deferred Pension Liability Outflows Inflows Expense Governmental activities $ 75,782,206 $ 15,184,867 $ 7,861,600 $ 9,211,246 Business-type activities 20,134,554 3,341,973 1,568,576 2,305,446 Pension Trust funds 150,844 3,820 11,750 15,717 Totals $ 96,067,604 $ 18,530,660 $ 9,441,926 $ 11,532,409 94

111 Notes to the Financial Statements September 30, 2015 NOTE 14 GENERAL EMPLOYEES DEFINED CONTRIBUTION RETIREMENT PLAN Plan description. The General Employees Defined Contribution Retirement Plan was established as a single employer, public employee, retirement plan to provide income to all participating General Employees hired on or after September 7, All Plan provisions, including benefits, eligibility, vesting, etc., were established by City Ordinance The City Commission approves all plan provisions and amendments. The Plan does not issue a stand-alone financial report and is not included in any other retirement system s or entity s financial report. The Plan s financial statements are prepared using the accrual basis of accounting. Employee and employer contributions are recognized as revenues when due and a formal commitment to provide contributions has been made. Benefits and refunds are recognized when due and payable in accordance with terms of the Plan. All investments are directed by Plan members, including the non-vested portion of the City s contributions, if any. Plan members may elect to allocate investments among mutual funds, money market funds, and fixed income funds. Investments are reported at fair value. Membership. General Employees Defined Contribution Retirement Plan membership at September 30, 2015, is as follows: Active employees (vested and non-vested) 184 Retired and terminated members maintaining balances 40 Total 224 Benefits. Member contributions are 100% vested at all times. Employer contributions become vested after five years of employment. Funding policy. Members are required to contribute 6% of covered salary (regular pay only) to the Plan, and the City is required to match this contribution percentage. A Participant may elect to make an additional deferral of his or her compensation to a 457(b) Deferred Compensation Plan. In such event, the City shall match 100% of up to the first 2% electively deferred by the Participant, for a total match of 8%. While the Participant s elective deferral shall be deposited into a 457(b) Deferred Compensation Plan, the contributions made by the City shall be deposited into the Defined Contribution Plan. During 2015, actual contributions were $515,299 from employees, $634,535 from the City, and $3,986 from Sarasota County. The City contributed an additional $62,531 to fund administrative expenses for the plan. This contribution was from current year forfeitures for employees that have terminated before five years of employment. 95

112 Notes to the Financial Statements September 30, 2015 Financial Statements of the General Employees Defined Contribution Retirement Plan: Statement of Plan Net Position Assets Cash and cash equivalents $ 199,830 Investments: Domestic mutual funds 2,832,702 Bond mutual funds 1,206,223 Foreign mutual funds 411,999 Foreign bond mutual funds 24,708 Total investments 4,475,632 Receivables (net): Accounts 190,899 Interest and dividends 230 Total receivables 191,129 Total assets 4,866,591 Deferred Outflows of Resources Pension: Difference between expected and actual experience 14 Changes in assumptions 368 Total deferred outflows of resources 382 Liabilites Accounts payable 3,000 Accrued wages 543 Compensated absences 477 Net Pension liability 15,082 Total liabilities 19,102 Deferred Inflows of Resources Pension: Net difference between projected and actual earnings on pension plan investments 1,175 Net Position Held in trust for pension and OPEB benefits $ 4,846,696 96

113 Notes to the Financial Statements September 30, 2015 Statement of Changes in Plan Net Position Additions Contributions: Plan members $ 515,299 Employer City of Sarasota 634,535 Sarasota County 3,986 Other 62,531 Total contributions 1,216,351 Net decrease in fair value of investments (80,199) Interest 28,206 Total investment loss (51,993) Less investment expense (3,312) Total additions 1,161,046 Deductions Benefits 112,630 Administration expenses 42,468 Total deductions 155,098 Change in net assets 1,005,948 Total net position - beginning 3,840,748 Total net position - ending $ 4,846,696 NOTE 15 - OTHER POST-EMPLOYMENT BENEFITS PLAN A. Plan Description The City Commission established the Other Post-Employment Benefits (OPEB) Trust Fund for the purpose of accumulating, investing, and managing funds necessary to meet the costs of providing health and/or life insurance to retirees and their dependents. The plan is a single-employer defined benefit OPEB plan administered by the City to provide medical and life insurance benefits to eligible retirees and their dependents. The plan is administered by a separate oversight committee. The City Commission approves all plan provisions and amendments. Separate financial statements of the plan are not available. The Plan has adopted Governmental Accounting Standards Board (GASB) Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. In addition to other disclosures, the GASB requires for the current year and each of the two preceding years, annual OPEB cost, percentage of annual OPEB cost contributed and the net OPEB obligation at the end of the year. This information is presented later in this note. All full time employees of the City of Sarasota who satisfy the vesting, disability, early or normal retirement provisions of the applicable retirement plans may be eligible for post-employment benefits. Furthermore, certain individuals who transferred from the City to the County are eligible for certain benefits under the City s OPEB plan. These include certain Fire Rescue employees, and other former employees who were transferred to Sarasota County through a consolidation of services. They continue to be members of the City s Pension Plans, but are not covered under the City s benefit plans while an active employee. However, upon retirement under the City s pension plans, they may transfer to the City s benefit plans (medical, prescription and dental only; no life insurance) for coverage during their retirement years. 97

114 Notes to the Financial Statements September 30, 2015 Membership in the plan consisted of the following at September 30, 2015: Retirees and beneficiaries receiving benefits 586 Terminated plan members entitled to but not receiving benefits 22 Active plan members 538 Total 1,146 B. Summary of Significant Accounting Policies Basis of Accounting. The plan s financial statements are prepared using the accrual basis of accounting. Separate financial statements of the plan are not available. Employee and employer contributions are recognized as revenues when due and a formal commitment to provide contributions has been made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Method Used to Value Investments. Investments are reported at fair value using quoted market prices or the best estimate available. C. Funding Policy and Contributions The contribution requirements of plan members and the City are established and may be amended by the City Commission. The contribution is based on projected pay-as-you-go financing requirements, with an additional amount to prefund benefits as determined annually by the City Commission. These contributions are neither mandated nor guaranteed. The City has retained the right to unilaterally modify its payment for retiree health care and life insurance benefits. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations. For the 2015 fiscal year, the City contributed $5,244,971 to the plan, including $1,166,420 for current premiums (22 percent of total premiums) an additional $2,389,099 to prefund benefits (46 percent of total premiums) and $1,689,452 of contributions from the proprietary and pension funds to pay off their prior years OPEB liability (32 percent of premiums). Plan members receiving benefits contributed $1,369,258, or 21 percent of the total premiums through their required contributions. Retiree-only coverage is offered to plan members at no cost or up to $ per month based upon pension benefit and type of plan selected. Dependent coverage is offered at $ to $ per month for dependents less than age 65 and $ to $ per month for dependents eligible for Medicare. Rates vary based upon the type of plan selected by the retiree. D. Annual OPEB Cost and Net OPEB Obligation The City s annual other postemployment benefit cost (expense) is calculated based on the annual required contribution (ARC) of the employer. 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 following table shows the components of the City s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City s net OPEB obligation. Annual required contribution $ 4,236,625 Interest on net OPEB obligation 1,267,552 Adjustment to annual required contribution (1,545,851) Annual OPEB cost (expense) 3,958,326 Contributions made (5,244,971) Decrease in net OPEB obligation (1,286,645) Net OPEB obligation - beginning of year 18,107,879 Net OPEB obligation - end of year $ 16,821,234 The net OPEB obligation at the end of the year is $16,821,234 for governmental activities. The businesstype activities and fiduciary funds have made contributions to pay off their net OPEB obligation. 98

115 Notes to the Financial Statements September 30, 2015 The City s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the 2015 fiscal year and preceding years are as follows: Fiscal Annual Percentage of Net Year OPEB Annual OPEB OPEB Ended Cost Cost Contributed Obligation 9/30/2013 $11,450, % $14,486,747 9/30/ ,201, % 18,107,879 9/30/2015 3,958, % 16,821,234 E. Funded Status and Funding Progress As of October 1, 2014, the most recent actuarial valuation date, the plan was 54.5% funded. The actuarial accrued liability for benefits was $71,314,848, and the actuarial value of assets was $38,865,507, resulting in an unfunded actuarial accrued liability (UAAL) of $32,449,341. The covered payroll (annual payroll of active employees covered by the plan) was $33,991,862, and the ratio of the UAAL to the covered payroll was percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The schedule of employer contributions, presented as required supplementary information, presents trend information about the amounts contributed to the plan by the City in comparison to the annual required contribution (ARC), an amount that is actuarially determined in accordance with the parameters of GASB Statement 43. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. F. Actuarial Methods and Assumptions Projection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the October 1, 2014, actuarial valuation, the projected unit credit cost method was used. The actuarial assumptions included a 7 percent investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer s own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend of 9 percent initially, decreasing gradually. Both rates included a 2.5 percent inflation assumption. The actuarial value of assets was determined using the market value of assets on the valuation date. The UAAL is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at October 1, 2014, was 14 years. 99

116 Notes to the Financial Statements September 30, 2015 G. Financial Statements of the Other Post-Employment Benefits Plan: Statement of Plan Net Position Assets Cash and cash equivalents $ 500,629 Investments: Money market funds 871,343 U.S. Government securities 1,245,317 U.S. Government agency securities 1,910,292 Common and preferred stock 21,317,711 Corporate bonds and notes 3,246,973 Real estate mutual funds 4,629,262 Mortgage backed securities 786,046 Foreign stocks 4,399,368 Foreign bonds mutual funds 309,392 Total investments 38,715,704 Receivables (net): Accounts 1,088 Interest and dividends 91,259 Prepaid Items 1,612 Total assets 39,310,292 Liabilities Accounts payable 55,083 Liability for unpaid claims 580,941 Total liabilities 636,024 Net Position Restricted for OPEB benefits $ 38,674,268 Statement of Changes In Plan Net Position Additions Contributions: Plan members $ 1,369,258 Employer City of Sarasota 5,244,971 Other 775,267 Total contributions 7,389,496 Investment income : Net increase in fair value of investments 959,114 Interest 132,148 Dividends 710,527 Total investment income 1,801,789 Less investment expense (373,268) Net investment income 1,428,521 Total additions 8,818,017 Deductions Benefits 7,669,443 Other benefits 403,462 Administrative expenses 936,351 Total deductions 9,009,256 Change in net position (191,239) Total net position - beginning 38,865,507 Total net position - ending $ 38,674,

117 Notes to the Financial Statements September 30, 2015 NOTE 16 - DISCRETELY PRESENTED COMPONENT UNITS St. Armands Business Improvement District - Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual for the fiscal year ended September 30, 2015: Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Ad valorem taxes $ 228,415 $ 228,415 $ 229,747 $ 1,332 Investment earnings (loss) ,072 1,572 Miscellaneous 2,500 2,500 2, Total revenues 231, , ,707 3,292 Expenditures Current: Economic environment 137, ,735 90,358 57,377 Capital outlay: Economic environment 93,705 83, ,680 Total expenditures 231, ,415 90, ,057 Net change in fund balance , ,349 Fund balance - beginning 22,379 22, , ,844 Fund balance - ending $ 22,379 $ 22,379 $ 280,572 $ 258,193 Reconciliation to Statement of Net Position: Fund balance - ending $ 280,572 Capital assets 1,576,267 Less accumulated depreciation (442,599) Net position - ending $ 1,414,240 Reconciliation to Statement of Activities: Net change in fund balance $ 144,349 Current year depreciation (60,819) Change in net position $ 83,

118 Notes to the Financial Statements September 30, 2015 Downtown Improvement District Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual for the fiscal year ended September 30, 2015: Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Ad valorem taxes $ 344,234 $ 344,234 $ 348,627 $ 4,393 Investment earnings ,917 1,417 Miscellaneous ,100 1,100 Total revenues 344, , ,644 6,910 Expenditures Current: Economic environment 268, , ,011 40,970 Capital outlay: Economic environment 92, , ,726 Total expenditures 360, , , ,696 Net change in fund balance (16,125) (187,973) 6, ,606 Fund balance - beginning 18,174 18, , ,773 Fund balance - ending $ 2,049 $ (169,799) $ 205,580 $ 375,379 Reconciliation to Statement of Net Position: Fund balance - ending $ 205,580 Capital assets 463,632 Less accumulated depreciation (178,942) Net position - ending $ 490,270 Reconcilation to Statement of Activities: Net change in fund balance $ 6,633 Current year depreciation (38,306) Change in net position $ (31,673) 102

119 Notes to the Financial Statements September 30, 2015 NOTE 17 RESTATEMENT OF NET POSITION RESTRICTED FOR PENSIONS For the current year, the City implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment to GASB 68. As a result, the City was required to report its proportionate share of the net pension liability and deferred outflows from the General Employees Police Officers and Firefighters Defined Benefit Pension Plans. Prior period adjustments were made to decrease the affected Enterprise Funds, Internal Service Funds, and the Governmental Activities and Business-type Activities beginning net positions for the prior period costs associated with reporting the net pension liability and deferred outflows. The effects of these restatements are shown below: Net Position Pension Previously Net Pension Deferred Restated Net 9/30/2014 9/30/2013 9/30/2013 9/30/2014 Governmental Activities $ 221,491,533 $ (88,092,211) $ 14,444,784 $ 147,844,106 Business-type Activities 208,834,553 (21,846,618) 2,751, ,739,299 Enterprise Funds Water and Sewer 159,092,725 (17,801,837) 2,241, ,532,852 Van Wezel 18,782,593 (142,610) 17,960 18,657,943 Solid Waste 8,516,006 (3,046,821) 383,717 5,852,902 Bobby Jones Golf Course 4,100,432 (365,956) 46,089 3,780,565 Municipal Auditoriums 359,472 (250,343) 31, ,657 Parking Management 17,983,325 (239,051) 30,106 17,774,380 Total 208,834,553 (21,846,618) 2,751, ,739,299 Internal Service Funds Equipment Maintenance 231,687 (1,136,709) 143,157 (761,865) Information Technology 1,175,511 (1,023,236) 128, ,141 Total 1,407,198 (2,159,945) 272,023 (480,724) Fiduciary Funds Pension Trust Funds General Employees' Defined Benefit Pension 140,654,804 (49,102) 6, ,611,886 Police Officers' Defined Benefit Pension 196,028,450 (49,102) 6, ,985,532 Firefighters' Defined Benefit Pension 134,507,240 (49,102) 6, ,464,322 General Employees' Defined Contribution Retirement 3,855,051 (16,364) 2,061 3,840,748 Total $ 475,045,545 $ (163,670) $ 20,613 $ 474,902,488 NOTE 18 SUBSEQUENT EVENT Lease Purchase Agreement On December 9, 2015, the City entered into a $1,700,000 master tax exempt lease/purchase agreement with U. S. Bancorp Government Leasing and Finance, Inc. for the purchase of 38 police vehicles and related equipment. The lease has a final maturity date of December 9, 2018, with an interest rate of %. The annual debt service requirements for the lease are as follows: Payment Total Debt Date Principal Interest Service 12/9/2016 $ 557,640 $ 27,370 $ 585,010 12/9/ ,619 18, ,011 12/9/ ,741 9, ,010 Total $ 1,700,000 $ 55,031 $ 1,755,

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121 General Employees' Defined Benefit Pension Plan Required Supplementary Information Schedule of Changes in the Plan's Net Pension Liability and Related Ratios Last Two Fiscal Years 2015* 2014** Total Pension Liability Service Cost $ 2,119,194 $ 2,036,380 Interest 12,562,838 12,150,963 Benefit Changes Difference Between Actual & Expected Experience 101,089 74,622 Assumption Changes -- 1,949,249 Benefit Payments (discounted to beginning of year) (10,450,901) (9,957,849) Refunds (discounted to beginning of year) (12,822) (124,586) Net Change in Total Pension Liability 4,319,398 6,128,779 Total Pension Liability - Beginning 183,659, ,625,424 Total Pension Liability - Ending (a) $ 187,979,125 $ 183,754,203 Plan Fiduciary Net Position Contributions - Employer $ 6,249,607 $ 6,011,590 Contributions - Member 767, ,009 Net Investment Income (3,099,197) 13,236,828 Benefit Payments (discounted to beginning of year) (10,450,901) (9,957,849) Refunds (discounted to beginning of year) (12,822) (124,586) Administrative Expense (157,689) (166,043) Other 3,488 2,621 Net Change in Plan Fiduciary Net Position (6,699,807) 9,793,570 Plan Fiduciary Net Position - Beginning 140,654, ,861,234 Plan Fiduciary Net Position - Ending (b) $ 133,954,997 $ 140,654,804 Net Pension Liability - Ending (a) - (b) $ 54,024,128 $ 43,099,399 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 71.26% 76.55% Covered Employee Payroll $ 13,778,114 $ 14,151,688 Net Pension Liability as a Percentage of Covered Employee Payroll % % Notes to Schedule: The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. There is a difference in the Ending Total Pension Liability at 9/30/2014 and the Beginning Total Pension Liability at 9/30/2015. This is due to the 2014 trend information using a 9/30/2014 valuation date and a 9/30/2014 measurement date and the 2015 trend information uses a 9/30/2014 valuation date and a 9/30/2015 measurement date. * Valuation Date: 9/30/2014, Measurement Date: 9/30/2015 ** Valuation Date 9/30/2014, Measurement Date: 9/30/

122 General Employees' Defined Benefit Pension Plan Required Supplementary Information Schedule of Contributions Last Ten Fiscal Years 2015* Actuarially Determined Contribution $ 6,249,607 $ 6,011,590 $ 3,969,365 $ 3,626,629 Actual Contribution 6,249,607 6,011,590 3,969,365 3,626,629 Contribution Deficiency (Excess) $ -- $ -- $ -- $ -- Covered Payroll $ 13,778,114 $ 14,151,688 $ 13,956,483 $ 16,061,250 Actual Contribution as a % of Covered Payroll 45.36% 42.48% 28.44% 22.58% Notes to Schedule: Valuation Date September 30, 2014 Measurement Date September 30, 2014 Actuarially determined contribution rates are calculated as of October 1, which is two year(s) prior to the end of the fiscal year in which contributions are reported. Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Dollar, Closed Remaining Amortization Period 21 years Asset Valuation Method 5-year smoothed market Inflation 2.3% Salary Increases 4.8% to 7.2% depending on service, including inflation Investment Rate of Return 7.0% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition. Mortality RP-2000 Combined Healthy Participant Mortality Table for males and f s with future mortality improvement projected from 2000 to all future years by using Scale AA Other Information: There were no benefit changes for The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. * Estimates 106

123 $ 3,043,240 $ 2,766,721 $ 2,867,359 $ 2,368,489 $ 2,425,114 $ 1,881,632 3,043,240 2,766,721 2,867,359 2,368,489 2,425,114 1,881,632 $ -- $ -- $ -- $ -- $ -- $ -- $ 21,234,520 $ 20,849,450 $ 22,193,183 $ 23,084,682 $ 23,544,796 $ 21,202, % 13.27% 12.92% 10.26% 10.30% 8.87% 107

124 General Employees' Defined Benefit Pension Plan Required Supplementary Information Schedule of Investment Returns Last Two Fiscal Years Annual Money-Weighted Rate of Return, Net of Investment Expenses 0.00% 10.41% Notes to Schedule: The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. 108

125 Firefighters' Defined Benefit Pension Plan Required Supplementary Information Schedule of Changes in the Plan's Net Pension Liability and Related Ratios Last Two Fiscal Years 2015* 2014** Total Pension Liability Service Cost $ 331,515 Interest 11,538,343 Benefit Changes -- Difference Between Actual & Expected Experience 1,072,137 Assumption Changes 4,198,868 Benefit Payments, including refunds (discounted to beginning of year) (11,537,394) Net Change in Total Pension Liability -- 5,603,469 Total Pension Liability - Beginning 165,050, ,447,508 Total Pension Liability - Ending (a) $ 165,050,977 $ 165,050,977 Plan Fiduciary Net Position Contributions - Employer $ 9,406,256 Contributions - Member 86,248 Net Investment Income 13,132,597 Benefit Payments, including refunds (discounted to beginning of year) (11,537,394) Administrative Expense (173,029) Other -- 59,170 Net Change in Plan Fiduciary Net Position -- 10,973,848 Plan Fiduciary Net Position - Beginning 134,507, ,533,392 Plan Fiduciary Net Position - Ending (b) $ 134,507,240 $ 134,507,240 Net Pension Liability - Ending (a) - (b) $ 30,543,737 $ 30,543,737 City's Proportionate Share of the Net Pension Liability Proportion of the net pension liability 33.00% Proportionate share of the net pension liability $ 10,079,433 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 81.49% 81.49% Covered Employee Payroll $ 1,078,100 Net Pension Liability as a Percentage of Covered Employee Payroll #DIV/0! 2,833.11% Notes to Schedule: The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. There is a difference in the Ending Total Pension Liability at 9/30/2014 and the Beginning Total Pension Liability at 9/30/2015. This is due to the 2014 trend information using a 9/30/2014 valuation date and a 9/30/2014 measurement date and the 2015 trend information uses a 9/30/2014 valuation date and a 9/30/2015 measurement date. * Valuation Date: 9/30/2014, Measurement Date: 9/30/2015 ** Valuation Date 9/30/2014, Measurement Date: 9/30/

126 Firefighters' Defined Benefit Pension Plan Required Supplementary Information Schedule of Contributions Last Ten Fiscal Years 2015* Actuarially Determined Contribution $ - $ 8,593,058 $ 8,542,822 $ 6,985,373 Actual Contribution -- 8,616,358 8,542,822 6,985,373 Contribution Deficiency (Excess) $ - $ (23,300) $ - $ - Covered Payroll $ - $ 1,078,100 $ 1,696,225 $ 1,953,913 Actual Contribution as a % of Covered Payroll #DIV/0! % % % Notes to Schedule: Valuation Date September 30, 2014 Measurement Date September 30, 2014 Actuarially determined contribution rates are calculated as of September 30, which is twelve months prior to the beginning of the fiscal year in which contributions are reported. Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Dollar, Closed Remaining Amortization Period 8 years beginning October 1, 2014 Asset Valuation Method 3-year smoothed market Inflation 3.75% Salary Increases 3.75% to 6.75% including inflation Investment Rate of Return 7.50% Retirement Age Age and experience-based table of rates that are specific to the type of eligibility condition. Mortality RP-2000 Mortality Table for males and females. There is no provision for future mortality improvement. Other Information: Notes There were no benefit changes for Cost-of-living adjustment 3.5% annual increase assumed and 5.0% impacted by 50% of the Top Step Base Pay minimum The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. * Estimates 110

127 $ 5,725,453 $ 4,936,275 $ 4,302,657 $ 4,566,249 $ 3,757,948 $ 3,637,413 5,725,453 4,936,275 4,302,657 4,566,249 3,757,948 3,637,413 $ - $ - $ - $ - $ - $ - $ 2,111,302 $ 2,938,788 $ 3,589,095 $ 3,657,208 $ 3,706,963 $ 3,897, % % % % % 93.32% 111

128 Firefighters' Defined Benefit Pension Plan Required Supplementary Information Schedule of Investment Returns Last Two Fiscal Years Annual Money-Weighted Rate of Return, Net of Investment Expenses 10.87% Notes to Schedule: The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. 112

129 Police Officers' Defined Benefit Pension Plan Required Supplementary Information Schedule of Changes in the Plan's Net Pension Liability and Related Ratios Last Two Fiscal Years 2015* 2014** Total Pension Liability Service Cost $ 3,290,606 $ 3,150,996 Interest 16,362,460 15,888,805 Benefit Changes 3,008, Difference Between Actual & Expected Experience 58,566 (838) Assumption Changes Benefit Payments (discounted to beginning of year) (13,454,067) (12,738,564) Refunds (discounted to beginning of year) (7,000) (7,368) Net Change in Total Pension Liability 9,259,084 6,293,031 Total Pension Liability - Beginning 238,862, ,624,191 Total Pension Liability - Ending (a) $ 248,121,571 $ 238,917,222 Plan Fiduciary Net Position Contributions - Employer $ 7,864,404 $ 7,678,913 Contributions - State $ 570, ,301 Contributions - Member 825, ,571 Net Investment Income 1,171,981 18,842,891 Benefit Payments (discounted to beginning of year) (13,454,067) (12,738,564) Refunds (discounted to beginning of year) (7,000) (7,368) Administrative Expense (189,057) (189,834) Other Net Change in Plan Fiduciary Net Position (3,217,415) 14,890,910 Plan Fiduciary Net Position - Beginning 196,028, ,137,540 Plan Fiduciary Net Position - Ending (b) $ 192,811,035 $ 196,028,450 Net Pension Liability - Ending (a) - (b) $ 55,310,536 $ 42,888,772 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 77.71% 82.05% Covered Employee Payroll $ 12,301,962 $ 12,654,736 Net Pension Liability as a Percentage of Covered Employee Payroll % % Notes to Schedule: The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. There is a difference in the Ending Total Pension Liability at 9/30/2014 and the Beginning Total Pension Liability at 9/30/2015. This is due to the 2014 trend information using a 9/30/2014 valuation date and a 9/30/2014 measurement date and the 2015 trend information uses a 9/30/2014 valuation date and a 9/30/2015 measurement date. * Valuation Date: 9/30/2014, Measurement Date: 9/30/2015 ** Valuation Date 9/30/2014, Measurement Date: 9/30/

130 Police Officers' Defined Benefit Pension Plan Required Supplementary Information Schedule of Contributions Last Ten Fiscal Years 2015* Actuarially Determined Contribution $ 8,415,647 $ 8,207,512 $ 5,869,827 $ 5,416,725 Actual Contribution 8,435,377 8,223,214 5,869,827 5,416,725 Contribution Deficiency (Excess) $ (19,730) $ (15,702) $ - $ - Covered Payroll $ 12,301,962 $ 12,654,736 $ 9,558,125 $ 9,412,000 Actual Contribution as a % of Covered Payroll 68.57% 64.98% 61.41% 57.55% Notes to Schedule: Valuation Date September 30, 2014 Measurement Date September 30, 2014 Actuarially determined contribution rates are calculated as of October 1, which is two year(s) prior to the end of the fiscal year in which contributions are reported. Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 23 years Asset Valuation Method 5-year smoothed market Inflation 2.5% Salary Increases 4.9% to 12.7% depending on service, including inflation Investment Rate of Return 7.0% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition. Mortality RP-2000 Combined Healthly Participant Mortality Tables for males and females with future mortality improvements projected from 2000 to all future years by using Scale AA. Other Information: There were no benefit changes for The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. * Estimates 114

131 $ 4,143,925 $ 3,941,662 $ 4,003,036 $ 4,182,557 $ 4,333,312 $ 3,942,053 4,143,925 3,941,662 4,003,036 4,182,557 4,333,312 3,942,053 $ - $ - $ - $ - $ - $ - $ 10,375,692 $ 10,513,000 $ 11,356,425 $ 11,866,188 $ 11,885,113 $ 11,164, % 37.49% 35.25% 35.25% 36.46% 35.31% 115

132 Police Officers' Defined Benefit Pension Plan Required Supplementary Information Schedule of Investment Returns Last Two Fiscal Years Annual Money-Weighted Rate of Return, Net of Investment Expenses 10.60% Notes to Schedule: The 2015 fiscal year was the year of implementation of GASB Statement No. 68. Ten year trend information will be presented for future fiscal years. 116

133 Other Post Employment Benefits Plan Required Supplementary Information Schedule of Funding Progress (in millions of dollars) (2) (6) Actuarial (4) UAAL as (1) Accrued (3) Unfunded a Percentage Actuarial Actuarial Liability Funded AAL (5) of Covered Valuation Value of (AAL) Ratio (UAAL) Covered Payroll Date Assets Entry Age (1) (2) (2) - (1) Payroll (4) (5) 10/01/2006 $0.00 $ % $ $ % 10/01/ /01/ /01/ /01/ /01/ /01/ Analysis of the dollar amounts of actuarial value of assets or actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of the OPEB Plan s funding status on a going-concern basis. Analysis of this percentage over time indicates whether the Plan is becoming financially stronger or weaker. Generally, the greater this percentage, the stronger the Plan. Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of covered payroll approximately adjusts for the effects of inflation and aids analysis of the progress being made in accumulating sufficient assets to pay benefits when due. Generally, the smaller this percentage, the stronger the Plan. 117

134 Other Post Employment Benefits (OPEB) Plan Required Supplementary Information Schedule of Employer Contributions Year Annual Ended Required Percentage September 30, Contribution Contributed 2008 $ 8,765, % ,098, % ,992, % ,808, % ,114,000 11,771,000 12,615,000 4,236, % 75.26% 70.32% % 118

135 Nonmajor Governmental Funds Special Revenue Funds Special revenue funds are used to account for revenues derived from specific sources which are restricted to finance specific activities. State Housing Initiative Partnership (SHIP) - To account for revenue received from the Florida Housing Finance Corporation to be used for affordable housing needs. Development Services - To account for revenues and expenditures related to providing services to the development community including plans review, construction inspections and development approval. Gas Tax - To account for the proceeds of a local option gas tax on motor fuels and special fuels that is restricted to transportation. Special Law Enforcement (forfeiture) - To account for revenue received from fines or sale of property forfeited that is restricted for law enforcement purposes only. Golden Gate Point - To account for revenues and expenditures related to the construction and maintenance of enhancements and improvements within the public rights of way on Golden Gate Point. Multi-Modal Transportation Impact - To account for Impact Fees collected and expenditures restricted for the purpose of acquisition, expansion, and development of the public facilities identified in the Capital Improvement Program. Tourist Development Tax - To account for tourist development tax revenues and expenditures for tourist related projects. Miscellaneous Grants - To account for several miscellaneous grants which have a single purpose and require minimal special accounting requirements. Multi-Purpose - To account for miscellaneous revenues that are legally restricted to expenditures for a particular purpose. 119

136 Nonmajor Governmental Funds Debt Service Funds Debt service funds are used to account for the accumulation of resources for the payment of principal, interest and related costs, on long-term general and special obligation debt and loans payable Refunding Bonds - To account for the accumulation of resources for the payment of principal and interest on the 1992 Special Obligation Refunding Bonds General Obligation Bonds - To account for the accumulation of resources for the payment of principal and interest on the 2007 General Obligation Bonds General Obligation Bonds - To account for the accumulation of resources for the payment of principal and interest on the 2008 General Obligation Bonds General Obligation Bonds To account for the accumulation of resources for the payment of principal and interest on the 2015 General Obligation Bonds issued to advance refund 2007 General Obligation Bonds maturing on or after 7/1/ Build America - To account for the accumulation of resources for the payment of principal and interest on funds borrowed for the acquisition of land (Payne Park), construction of the Palm Parking Garage, and construction of the Robert L. Taylor Community Complex Sales Tax Payment Revenue Bonds To account for funds received for the purpose of financing a portion of the cost of the reconstruction of the Ed Smith Stadium Complex. 2001B First Florida - To account for the accumulation of resources for the advance refunding of the 1994 FFGFC loan payable First Florida - To account for the accumulation of resources for the payment of principal and interest on funds borrowed for the construction of a parking garage and the acquisition of equipment for energy efficiency First Florida - To account for the accumulation of resources for the payment of principal and interest on funds borrowed for the acquisition of land for transportation purposes and related demolition. Glen Oaks -To account for the accumulation of resources for the payment of principal and interest on funds borrowed for the design and construction of a privacy wall for the Glen Oaks Estates Subdivision. 120

137 Nonmajor Governmental Funds Capital Projects Funds Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. Capital and Extraordinary Maintenance - To account for funds appropriated for major capital facilities, improvements and equipment Sales Surtax Bond Construction - To account for funds from the 1989 Infrastructure Sales Surtax Bonds First Florida Construction - To account for funds received from the First Florida Governmental Financing Commission for the acquisition and remodeling of the Federal Building and the remodeling of City Hall First Florida Construction - To account for funds received from the First Florida Governmental Financing Commission for the acquisition, construction and improvements to projects in the Downtown Master Plan General Obligation Bonds - To account for funds received for the proceeds of bonds issued for the construction of a new police headquarters Build America Bonds To account for funds received for the proceeds of bonds issued to build a community center and acquire land for a park and parking garage Stadium Bonds - To account for funds received from the Build America Bond Series 2010 (issue date 12/16/10) for the purpose of financing a portion of the cost of the construction, reconstruction and renovation of the Ed Smith Stadium Complex. 121

138 Nonmajor Governmental Funds Combining Balance Sheet September 30, 2015 Special Revenue Funds Assets State Housing Initiative Development Partnership Services Gas Tax Cash and cash equivalents $ 569,396 $ 1,715,354 $ 1,471,485 Investments 1,958,878 5,901,285 5,062,312 Receivables (net): Accounts Interest 3,310 10,370 8,642 Notes 37, Special assessments Due from other governmental agencies ,055 Prepaid items 1,296 1, Total assets $ 2,570,029 $ 7,628,011 $ 6,994,494 Liabilities Accounts payable $ 107,459 $ 42,649 $ 121,319 Accrued interest payable Retainages payable Due to other funds Due to other governmental agencies Interfund payables Advance from other funds Accrued wages 2,391 62, Unearned revenue Customer deposits Total liabilities 109, , ,319 Deferred Inflows of Resources Unavailable revenue - grants Unavailable revenue - notes receivable 37, Unavailable revenue - special assessments Total deferred inflows of resources 37, Fund Balances Nonspendable: Prepaid items 1,296 1, Restricted for: Housing and community development 2,421, Building services -- 6,874, Transportation ,873,175 Law enforcement programs Golden Gate Point streetscape Tourist development Grant programs Economic development Debt service Construction Committed to: Development application system , Public art Neighborhood grant programs Citizens with disabilities Forestry Transportation Affordable housing Law enforcement Economic development Culture and recreation Assigned to: Subsequent year expenditures Unassigned Total fund balances (deficit) 2,423,030 7,522,987 6,873,175 Total liabilities, deferred inflows of resources and fund balances $ 2,570,029 $ 7,628,011 $ 6,994,

139 Special Revenue Funds Special Law Tourist Multi-Modal Enforcement Golden Gate Development Transportation Miscellaneous Multi- (Forfeiture) Point Tax Impact Fees Grants Purpose $ 94,346 $ 12,639 $ 426,837 $ 23, ,706 $ 674, ,575 43,480 1,468,437 81,841 1,275,328 2,319, , , ,380 3, ,156, ,814 8,800 3, $ 423,323 $ 56,201 $ 3,053,053 $ 105,761 $ 1,881,228 $ 3,090,232 $ 3,370 $ 2,056 $ 15,240 $ -- $ 66,817 $ 1,843, , ,204 84, , , , ,139 39,443 3,370 2,056 15, ,689 2,070, , , , , , , , , ,530, , , , , , , , , , , , ,953 54,145 2,530, , ,539 1,020,185 $ 423,323 $ 56,201 $ 3,053,053 $ 105,761 $ 1,881,228 $ 3,090,232 (continued) 123

140 Nonmajor Governmental Funds Combining Balance Sheet (continued) September 30, 2015 Assets Debt Service Funds General General General Refunding Obligation Obligation Obligation Bonds Bonds Bonds Bonds Cash and cash equivalents $ 875,847 $ 91,918 $ 50,721 $ 814 Investments 3,013, , ,492 2,802 Receivables (net): Accounts Interest 5, Notes Special assessments Due from other governmental agencies Prepaid items Total assets $ 3,894,083 $ 409,034 $ 225,507 $ 3,621 Liabilities Accounts payable $ -- $ -- $ -- $ -- Accrued interest payable Retainages payable Due to other funds Due to other governmental agencies Interfund payables Advance from other funds Accrued wages Unearned revenue Customer deposits Total liabilities Deferred Inflows of Resources Unavailable revenue - grants Unavailable revenue - notes receivable Unavailable revenue - special assessments Total deferred inflows of resources Fund Balances Nonspendable: Prepaid items Restricted for: Housing and community development Building services Transportation Law enforcement programs Golden Gate Point streetscape Tourist development Grant programs Economic development Debt service 3,894, , ,507 3,621 Construction Committed to: Development application system Public art Neighborhood grant programs Citizens with disabilities Forestry Transportation Affordable housing Law enforcement Economic development Culture and recreation Assigned to: Subsequent year expenditures Unassigned Total fund balances (deficit) 3,894, , ,507 3,621 Total liabilities, deferred inflows of resources and fund balances $ 3,894,083 $ 409,034 $ 225,507 $ 3,

141 Debt Service Funds Sales Tax 2001B Build Payment Rev First First First America Bonds Florida Florida Florida Glen Oaks $ 2,677 $ 117,105 $ 5,867 $ 20,212 $ 2,357 $ 738 9, ,872 20,185 69,535 8,108 2, , , $ 11,902 $ 520,620 $ 166,111 $ 89,843 $ 10,465 $ 130,518 $ -- $ -- $ -- $ -- $ -- $ , , , , , , , , ,620 26,111 89,843 10, (123,952) 11, ,620 26,111 89,843 10,457 (123,952) $ 11,902 $ 520,620 $ 166,111 $ 89,843 $ 10,465 $ 130,518 (continued) 125

142 Nonmajor Governmental Funds Combining Balance Sheet (concluded) September 30, 2015 Capital Projects Funds Assets Capital and 1989 Sales 2000 Extraordinary Surtax Bond First Florida Maintenance Construction Construction Cash and cash equivalents $ 8,842 $ 17,382 $ 69,702 Investments 30,421 59, ,793 Receivables (net): Accounts Interest Notes Special assessments Due from other governmental agencies Prepaid items Total assets $ 39,312 $ 77,283 $ 309,900 Liabilities Accounts payable $ 3,592 $ -- $ -- Accrued interest payable Retainages payable Due to other funds Due to other governmental agencies Interfund payables Advance from other funds Accrued wages Unearned revenue Customer deposits Total liabilities 3, Deferred Inflows of Resources Unavailable revenue - grants Unavailable revenue - notes receivable Unavailable revenue - special assessments Total deferred inflows of resources Fund Balances Nonspendable: Prepaid items Restricted for: Housing and community development Building services Transportation Law enforcement programs Golden Gate Point streetscape Tourist development Grant programs Economic development Debt service Construction -- 77, ,900 Committed to: Development application system Public art Neighborhood grant programs Citizens with disabilities Forestry Transportation Affordable housing Law enforcement Economic development Culture and recreation Assigned to: Subsequent year expenditures 35, Unassigned Total fund balances (deficit) 35,720 77, ,900 Total liabilities, deferred inflows of resources and fund balances $ 39,312 $ 77,283 $ 309,

143 Capital Project Funds Total Nonmajor First Florida General Build America Stadium Governmental Construction Obligation Bonds Bonds Bonds Funds $ 107,121 $ 11,920 $ 260,094 $ -- $ 7,001, ,526 41, , ,088, , , , , , ,073 1,908, ,141 $ 476,269 $ 53,037 $ 1,156,407 $ 58,073 $ 33,434,317 $ -- $ 24,492 $ 25,875 $ 12,776 $ 2,268, , , , ,907 41, , , , , ,492 25,875 54,738 3,576, , , , , , ,421, ,874, ,094, , , ,530, , , ,191, ,269 28,545 1,130,532 3,335 2,025, , , , , , , , , , , , (123,952) 476,269 28,545 1,130,532 3,335 29,046,040 $ 476,269 $ 53,037 $ 1,156,407 $ 58,073 $ 33,434,

144 Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended September 30, 2015 Special Revenue Funds State Housing Special Law Initiative Development Enforcement Partnership Services Gas Tax (Forfeiture) Revenues Taxes $ -- $ -- $ 2,432,847 $ -- Special assessments Licenses and permits -- 5,898, Intergovernmental 1,839, Charges for services , Fines and forfeits ,513 Investment earnings 33,588 50,508 53,606 3,656 Miscellaneous ,831 Total revenues 1,873,759 6,673,313 2,486, ,000 Expenditures Current: General government , Public safety -- 2,977, ,517 Physical environment Transportation , Culture and recreation Economic environment 1,491, Debt service: Principal payments Interest and fiscal charges Bond issuance costs Capital outlay -- 23,394 1,049,709 13,050 Total expenditures 1,491,542 3,215,035 1,222, ,567 Excess (deficiency) of revenues over (under) expenditures 382,217 3,458,278 1,263,494 7,433 Other financing sources (uses) Transfers in Transfers out -- (215,000) (938,610) -- General obligation bonds issued Premium on general obligation bon Payment to bond escrow agent Total other financing sources (uses) -- (215,000) (938,610) -- Net change in fund balances 382,217 3,243, ,884 7,433 Fund balances (deficit) - beginning 2,040,813 4,279,709 6,548, ,520 Fund balances (deficit) - ending $ 2,423,030 $ 7,522,987 $ 6,873,175 $ 419,

145 Special Revenue Funds Tourist Multi-Modal Golden Gate Development Transportation Miscellaneous Multi- Point Tax Impact Fees Grants Purpose $ 100,659 1,544,783 $ -- $ -- $ 14, , ,185, ,012,521 3,547, ,723 69, ,659 61, ,939 7,726 12,855 11, ,855 11, ,246 3,748, ,761 1,384,613 3,715, ,678 23, ,219, , ,527, ,483 30, ,534 93, ,280 16,453 93,089 4,219, ,975 3,690,976 8,157 (470,862) 105, ,638 24, , (18,939) -- (921,662) (9,382) (18,939) -- (766,770) (9,382) 8,157 (489,801) 105,761 (79,132) 14,976 45,988 3,020, ,046,671 1,005,209 $ 54,145 $ 2,530,455 $ 105,761 $ 967,539 $ 1,020,185 (continued) 129

146 Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (continued) Year Ended September 30, 2015 Debt Service Funds General General General 2009 Refunding Obligation Obligation Obligation Build Bonds Bonds Bonds Bonds America Revenues Taxes $ -- $ 2,848,104 $ 274,508 $ -- $ -- Special assessments Licenses and permits Intergovernmental ,119 Charges for services Fines and forfeits Investment earnings 28,926 9,552 2, ,180 Miscellaneous Total revenues 28,926 2,857, , ,299 Expenditures Current: General government Public safety Physical environment Transportation Culture and recreation Economic environment Debt service: Principal payments 474,753 1,005, , ,670,831 Interest and fiscal charges 1,671, , , , ,560 Bond issuance costs , Capital outlay Total expenditures 2,146,100 1,981, , ,581 2,466,391 Excess (deficiency) of revenues over (under) expenditures (2,117,174) 876,300 (2,457) (481,566) (2,205,092) Other financing sources (uses) Transfers in 1,783, ,462 2,212,170 Transfers out -- (209,462) General obligation bonds issued ,855, Premium on general obligation bon ,705, Payment to bond escrow agent -- (969,709) -- (36,284,902) -- Total other financing sources (uses) 1,783,000 (1,179,171) ,187 2,212,170 Net change in fund balances (334,174) (302,871) (2,457) 3,621 7,078 Fund balances (deficit) - beginning 4,228, , , ,824 Fund balances (deficit) - ending $ 3,894,083 $ 409,034 $ 225,507 $ 3,621 $ 11,

147 Debt Service Funds 2010 Sales Tax 2001B Payment Rev. First First First Bonds Florida Florida Florida Glen Oaks $ -- $ -- $ -- $ -- $ , , , , ,008 2,644 5, , ,232 1,008 2,644 10, , , , , ,122 14,986 47,436 25,672 5, , , , ,672 5,705 (506,935) (38,754) (296,428) (663,028) 5, , , , , , , (6,931) (38,754) (1,978) (369,028) 5, ,551 64,865 91, ,485 (128,964) $ 520,620 $ 26,111 $ 89,843 $ 10,457 $ (123,952) (continued) 131

148 Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (concluded) Year Ended September 30, 2015 Capital Projects Funds Capital and 1989 Sales Extraordinary Surtax Bond First Florida First Florida Maintenance Construction Construction Construction Revenues Taxes $ -- $ -- $ -- $ -- Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings 2,011 1,617 2,584 3,971 Miscellaneous Total revenues 2,011 1,617 2,584 3,971 Expenditures Current: General government Public safety Physical environment Transportation Culture and recreation Economic environment Debt service: Principal payments Interest and fiscal charges -- 4, Bond issuance costs Capital outlay 322,934 2, Total expenditures 322,934 6, Excess (deficiency) of revenues over (under) expenditures (320,923) (4,509) 2,584 3,971 Other financing sources (uses) Transfers in Transfers out (2,011) (1,617) General obligation bonds issued Premium on general obligation bon Payment to bond escrow agent -- (146,000) Total other financing sources (uses) (2,011) (147,617) Net change in fund balances (322,934) (152,126) 2,584 3,971 Fund balances (deficit) - beginning 358, , , ,298 Fund balances (deficit) - ending $ 35,720 $ 77,283 $ 309,900 $ 476,

149 Capital Projects Funds Total Nonmajor General Build America Stadium Governmental Obligation Bonds Bonds Bonds Funds $ -- $ -- $ -- $ 7,215, , ,996, ,047, , ,333 9,507 9,870 (169) 281, , ,677 9,507 9,870 57,904 24,304, ,931 7, ,647, ,219, ,793, , , ,627, ,553, ,360, , ,515 61, ,397, ,858 61,231 58,073 25,225,858 (587,351) (51,361) (169) (921,406) ,447, (2,316,683) ,855, ,705,627 (945,425) (38,346,036) (945,425) ,345,886 (1,532,776) (51,361) (169) 424,480 1,561,321 1,181,893 3,504 28,621,560 $ 28,545 $ 1,130,532 $ 3,335 $ 29,046,

150 State Housing Initiative Partnership Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental $ 1,779,149 $ 1,779,149 $ 1,839,544 $ 60,395 Investment earnings ,588 33,588 Miscellaneous 300, , (299,373) Total revenues 2,079,149 2,079,149 1,873,759 (205,390) Expenditures Current: Economic environment 2,105,031 3,528,732 1,491,542 2,037,190 Total expenditures 2,105,031 3,528,732 1,491,542 2,037,190 Net change in fund balances (25,882) (1,449,583) 382,217 1,831,800 Fund balances - beginning 2,040,813 2,040,813 2,040, Fund balances - ending $ 2,014,931 $ 591,230 $ 2,423,030 $ 1,831,

151 Development Services Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Licenses and permits $ 2,757,000 $ 2,757,000 $ 5,898,174 $ 3,141,174 Charges for services 261, , , ,256 Miscellaneous Investment earnings 11,000 11,000 50,508 39,508 Total revenues 3,029,000 3,108,300 6,673,313 3,565,013 Expenditures Current: General government 220, , ,931 85,751 Public safety 2,675,581 2,807,551 2,977,710 (170,159) Capital outlay: Public safety 4,340 92,162 23,394 68,768 Total expenditures 2,900,303 3,199,395 3,215,035 (15,640) Excess (deficiency) of revenues over (under) expenditures 128,697 (91,095) 3,458,278 3,549,373 Other financing uses Transfers out (215,000) (215,000) (215,000) -- Net change in fund balances (86,303) (306,095) 3,243,278 3,549,373 Fund balances - beginning 4,279,709 4,279,709 4,279, Fund balances - ending $ 4,193,406 $ 3,973,614 $ 7,522,987 $ 3,549,

152 Gas Tax Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Taxes $ 2,340,000 $ 2,340,000 $ 2,432,847 $ 92,847 Investment earnings ,606 53,606 Total revenues 2,340,000 2,340,000 2,486, ,453 Expenditures Current: Transportation 184, , , ,384 Capital outlay: Transportation 2,213,368 6,638,026 1,049,709 5,588,317 Total expenditures 2,397,468 7,123,660 1,222,959 5,900,701 Excess (deficiency) of revenues over (under) expenditures (57,468) (4,783,660) 1,263,494 6,047,154 Other financing uses Transfers out (926,899) (926,899) (938,610) (11,711) Net change in fund balances (984,367) (5,710,559) 324,884 6,035,443 Fund balances - beginning 6,548,291 6,548,291 6,548, Fund balances - ending $ 5,563,924 $ 837,732 $ 6,873,175 $ 6,035,

153 Special Law Enforcement (Forfeiture) Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Fines and forfeits $ -- $ -- $ 356,513 $ 356,513 Investment earnings ,656 3,656 Miscellaneous ,831 16,831 Total revenues , ,000 Expenditures Current: Public safety , ,517 93,911 Capital outlay: Public safety 2,495 55,539 13,050 42,489 Total expenditures 2, , , ,400 Net change in fund balance (2,526) (505,967) 7, ,400 Fund balances - beginning 412, , , Fund balances - ending $ 409,994 $ (93,447) $ 419,953 $ 513,

154 Golden Gate Point Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Taxes $ 100,000 $ 100,000 $ 100,659 $ 659 Investment earnings Total revenues 100, , ,246 1,246 Expenditures Current: Transportation 100, ,940 93,089 7,851 Total expenditures 100, ,940 93,089 7,851 Net change in fund balance (940) (940) 8,157 9,097 Fund balances - beginning 45,988 45,988 45, Fund balances - ending $ 45,048 $ 45,048 $ 54,145 $ 9,

155 Tourist Development Tax Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Taxes $ 50,000 $ 50,000 $ 1,544,783 $ 1,494,783 Intergovernmental -- 1,995,330 2,185, ,701 Investment earnings ,939 18,939 Total revenues 50,000 2,045,330 3,748,753 1,703,423 Expenditures Current: Physical environment 432,753 5,065,586 4,219, ,971 Total expenditures 432,753 5,065,586 4,219, ,971 Excess (deficiency) of revenues over (under) expenditures (382,753) (3,020,256) (470,862) 2,549,394 Other financing uses Transfers out (18,939) (18,939) Net change in fund balances (382,753) (3,020,256) (489,801) 2,530,455 Fund balances - beginning 3,020,256 3,020,256 3,020, Fund balances - ending $ 2,637,503 $ -- $ 2,530,455 $ 2,530,

156 City of Sarasota, Florida Multi-Modal Transportation Impact Fees Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Licenses and permits $ 300,000 $ 300,000 $ 98,035 $ (201,965) Investment earnings ,726 7,726 Total revenues 300, , ,761 (194,239) Expenditures Capital outlay: Transportation 300, , ,000 Total expenditures 300, , ,000 Excess (deficiency) of revenues over (under) expenditures , ,761 Fund balances - beginning Fund balances - ending $ -- $ -- $ 105,761 $ 105,

157 Miscellaneous Grants Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental $ 500,004 $ 3,492,733 $ 1,012,521 $ (2,480,212) Charges for services -- 11,000 7,723 (3,277) Fines and forfeits 40,000 40,000 46,659 6,659 Investment earnings ,855 12,805 Miscellaneous -- 70, , ,355 Total revenues 540,054 3,614,283 1,384,613 (2,229,670) Expenditures Current: Public safety 26, , , ,591 Transportation -- 76, ,994 Culture and recreation 8, ,677 52,483 97,194 Economic environment 25, ,757 42, ,223 Capital outlay: Public safety 14,741 34,392 34, Physical environment -- 2,518, ,947 2,318,403 Transportation 49, ,968 77, ,970 Culture and recreation 18, ,012 7, ,812 Total expenditures 142,965 4,231, ,975 3,534,444 Excess (deficiency) of revenues over (under) expenditures 397,089 (617,136) 687,638 1,304,774 Other financing sources (uses) Transfers in , ,892 (192,533) Transfers out (515,004) (902,266) (921,662) (19,396) Total other financing sources (uses) (515,004) (554,841) (766,770) (211,929) Net change in fund balances (117,915) (1,171,977) (79,132) 1,092,845 Fund balances - beginning 1,046,671 1,046,671 1,046, Fund balances - ending $ 928,756 $ (125,306) $ 967,539 $ 1,092,

158 Multi-Purpose Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Taxes $ 9,000 $ 9,000 $ 14,544 $ 5,544 Intergovernmental -- 3,543,496 3,547,144 3,648 Charges for services -- 4,592 69,739 65,147 Fines and forfeits 15,000 15,000 61,161 46,161 Investment earnings ,530 11,530 Miscellaneous -- 2,000 11,216 9,216 Total revenues 24,000 3,574,088 3,715, ,246 Expenditures Current: Public safety 1,074 24,154 23, Transportation 4,198 3,547,831 3,527,025 20,806 Culture and recreation 26,500 33,000 30,391 2,609 Economic environment 29, ,037 93, ,674 Capital outlay: Public safety -- 4,405 3, Transportation 2,618 50,590 2,618 47,972 Culture and recreation -- 32,344 10,085 22,259 Total expenditures 63,450 3,895,361 3,690, ,385 Excess (deficiency) of revenues over (under) expenditures (39,450) (321,273) 24, ,631 Other financing sources (uses) Transfers out (9,382) (9,382) Net change in fund balances (39,450) (321,273) 14, ,249 Fund balances - beginning 1,005,209 1,005,209 1,005, Fund balances - ending $ 965,759 $ 683,936 $ 1,020,185 $ 336,

159 1992 Refunding Bonds Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Investment earnings $ 10,000 $ 10,000 $ 28,926 $ 18,926 Total revenues 10,000 10,000 28,926 18,926 Expenditures Debt service: Principal payments 474, , , Interest and other charges 1,673,247 1,673,247 1,671,347 1,900 Total expenditures 2,148,000 2,148,000 2,146,100 1,900 Excess (deficiency) of revenues over (under) expenditures (2,138,000) (2,138,000) (2,117,174) 20,826 Other financing sources Transfers in 1,783,000 1,783,000 1,783, Net change in fund balances (355,000) (355,000) (334,174) 20,826 Fund balances - beginning 4,228,257 4,228,257 4,228, Fund balances - ending $ 3,873,257 $ 3,873,257 $ 3,894,083 $ 20,

160 2007 General Obligation Bonds Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Taxes $ 2,828,000 $ 2,828,000 $ 2,848,104 $ 20,104 Investment earnings 3,000 3,000 9,552 6,552 Total revenues 2,831,000 2,831,000 2,857,656 $ 26,656 Expenditures Debt service: Principal payments 1,005,000 1,005,000 1,005, Interest and other charges 1,822, , ,356 12,151 Total expenditures 2,827,969 1,993,507 1,981,356 12,151 Excess (deficiency) of revenues over (under) expenditures 3, , ,300 38,807 Other financing (uses) Transfers out -- (209,462) (209,462) -- Payment to bond escrow agent -- (969,709) (969,709) -- Total other financing (uses) -- (1,179,171) (1,179,171) -- Net change in fund balances 3,031 (341,678) (302,871) 38,807 Fund balance - beginning 711, , , Fund balance - ending $ 714,936 $ 370,227 $ 409,034 $ 38,

161 2008 General Obligation Bonds Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Taxes $ 273,000 $ 273,000 $ 274,508 $ 1,508 Investment earnings 1,000 1,000 2,564 1,564 Total revenues 274, , ,072 3,072 Expenditures Debt service: Principal payments 162, , , Interest and other charges 119, , ,579 3,001 Total expenditures 282, , ,529 3,001 Net change in fund balances (8,530) (8,530) (2,457) 6,073 Fund balances - beginning 227, , , Fund balances - ending $ 219,434 $ 219,434 $ 225,507 $ 6,

162 2015 General Obligation Refunding Bonds Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Investment earnings $ -- $ 1 $ 15 $ 14 Total revenues Expenditures Debt service: Interest and other charges , , Bond issuance costs , ,794 3,607 Total expenditures , ,581 3,607 Excess (deficiency) of revenues over (under) expenditures -- (485,187) (481,566) 3,621 Other financing sources (uses) Transfers in , , General obligation bonds issued 33,855,000 33,855, Premium on general obligation bonds 2,705,627 2,705, Payment to bond escrow agent -- (36,284,902) (36,284,902) -- Total other financing sources (uses) , , Net change in fund balances ,621 3,621 Fund balance - beginning Fund balance - ending $ -- $ -- $ 3,621 $ 3,

163 2009 Build America Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental $ 254,221 $ 254,221 $ 258,119 $ 3,898 Investment earnings (loss) 1,000 1,000 3,180 2,180 Total revenues 255, , ,299 6,078 Expenditures Debt service: Principal payments 1,670,831 1,670,831 1,670, Interest and other charges 796, , , Total expenditures 2,467,141 2,467,141 2,466, Excess (deficiency) of revenues over (under) expenditures (2,211,920) (2,211,920) (2,205,092) 6,828 Other financing sources Transfers in 2,212,170 2,212,170 2,212, Net change in fund balances ,078 6,828 Fund balances - beginning 4,824 4,824 4, Fund balances - ending $ 5,074 $ 5,074 $ 11,902 $ 6,

164 2010 Sales Tax Payments Revenue Bonds Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental $ 202,189 $ 202,189 $ 205,289 $ 3,100 Investment earnings 2,000 2,000 4,898 2,898 Total revenues 204, , ,187 5,998 Expenditures Debt service: Principal payments 225, , , Interest and other charges 493, , ,122 1,000 Total expenditures 718, , ,122 1,000 Excess (deficiency) of revenues over (under) expenditures (513,933) (513,933) (506,935) 6,998 Other financing sources Transfers in 500, , , Net change in fund balances (13,929) (13,929) (6,931) 6,998 Fund balances - beginning 527, , , Fund balances - ending $ 513,622 $ 513,622 $ 520,620 $ 6,

165 2001B First Florida Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Special assessments $ 105,000 $ 105,000 $ 100,540 $ (4,460) Investment earnings Total revenues 105, , ,232 (4,368) Expenditures Debt service: Principal payments 125, , , Interest and other charges 17,525 17,525 14,986 2,539 Total expenditures 142, , ,986 2,539 Net change in fund balances (36,925) (36,925) (38,754) (1,829) Fund balances - beginning 64,865 64,865 64, Fund balances - ending $ 27,940 $ 27,940 $ 26,111 $ (1,829) 149

166 2003 First Florida Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Investment earnings $ 1,000 $ 1,000 $ 1,008 $ 8 Total revenues 1,000 1,000 1,008 8 Expenditures Debt service: Principal payments 250, , , Interest and other charges 47,450 47,450 47, Total expenditures 297, , , Excess (deficiency) of revenues over (under) expenditures (296,450) (296,450) (296,428) 22 Other financing sources Transfers in 294, , , Net change in fund balances (2,000) (2,000) (1,978) 22 Fund balances - beginning 91,821 91,821 91, Fund balances - ending $ 89,821 $ 89,821 $ 89,843 $

167 2005 First Florida Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Investment earnings $ 500 $ 500 $ 2,644 $ 2,144 Total revenues ,644 2,144 Expenditures Debt service: Principal payments 640, , , Interest and other charges 27,200 27,200 25,672 1,528 Total expenditures 667, , ,672 1,528 Excess (deficiency) of revenues over (under) expenditures (666,700) (666,700) (663,028) 3,672 Other financing sources Transfers in 294, , , Net change in fund balances (372,700) (372,700) (369,028) 3,672 Fund balances - beginning 379, , , Fund balances - ending $ 6,785 $ 6,785 $ 10,457 $ 3,

168 Glen Oaks Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended September 30, 2015 Variance with Budgeted Amounts Final Budget Actual Positive Original Final Amounts (Negative) Revenues Special assessments $ 11,134 $ 11,134 $ 5,429 $ (5,705) Investment earnings ,288 5,288 Total revenues 11,134 11,134 10,717 (417) Expenditures Debt service: Principal payments 5,429 5, ,429 Interest and other charges 5,705 5,705 5, Total expenditures 11,134 11,134 5,705 5,429 Net change in fund balances ,012 5,012 Fund balances (deficit) - beginning (128,964) (128,964) (128,964) -- Fund balances (deficit) - ending $ (128,964) $ (128,964) $ (123,952) $ 5,

169 Nonmajor Enterprise Funds Enterprise funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis is financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Bobby Jones Golf Course - To account for the revenues and expenses of operating a complete 36 hole municipal golf course and a 9 hole executive course financed entirely by user charges. Municipal Auditoriums - To account for the operations of the City's civic center complex and the Payne Park auditorium. Parking Management - To account for the operations of the City's on-street parking and surface parking lots. Water and Sewer System Major Enterprise Fund Revenue Account This is the general operating account for the water and sewer system. Interest and Sinking Accounts To account for the accumulation or resources for the accumulation of resources for the payment of principal, interest and fiscal charges. Renewal, Replacement and Improvement Account For paying the cost of unusual or extraordinary maintenance or repairs, the cost of renewals and replacements, the cost of acquiring, installing or replacing equipment, the cost of improvements, and providing for the local share of any Federal or State assistance program. General Reserve Account To pay the cost of improvements, to pay the cost of purchasing or redeeming bonds, to pay the principal and interest on any obligations subordinate to the bonds issued under the resolution, to make up any deficiencies in any of the Accounts and to pay the cost of any item qualifying as an expenditure of the Renewal, Replacement and Improvement Account. Utility Construction Accounts To account for bond proceeds for water and sewer system improvements. Utility Stores Account To account for the operation of the utility system store room. 153

170 Nonmajor Enterprise Funds Combining Statement of Net Position September 30, 2015 Bobby Jones Municipal Parking Golf Course Auditoriums Management Total Assets Current assets: Cash and cash equivalents $ 145,803 $ 27,178 $ 98,193 $ 271,174 Investments 501,600 93, , ,909 Receivables (net): Accounts 5, ,000 20,018 Interest 1, ,676 Due from other governmental agencies 4, ,083 Inventories 35, ,065 Prepaid items 6,996 18,045 58,576 83,617 Total current assets 700, , ,170 1,349,542 Noncurrent assets: Capital assets Land 910, ,000 4,601,553 5,686,553 Buildings 1,214,059 1,982,832 20,380,440 23,577,331 Improvements 5,437, ,444 4,417,856 10,190,531 Equipment 481,027 56, ,531 1,010,422 Less accumulated depreciation (4,861,377) (2,269,844) (2,899,245) (10,030,466) Total capital assets (net of accumulated depreciation) 3,180, ,296 26,973,135 30,434,371 Total assets 3,881, ,359 27,483,305 31,783,913 Deferred Outflows of Resources Pension: Difference between expected and actual experience Changes in assumptions 8,226 5,627 5,373 19,226 Contributions to the pension plan subsequent to the measurement date 58,621 38,720 18, ,919 Total deferred outflows of resources 67,162 44,562 24, ,881 Liabilities Current liabilities: Accounts payable 30,188 7,071 28,155 65,414 Due to other governmental agencies Accrued Interest payable Accrued wages 19,311 6,139 21,142 46,592 Compensated absences 44,580 9,879 11,735 66,194 Unearned revenue 58,015 50, ,981 Total current liabilities 152,094 74,179 61, ,358 Noncurrent liabilities: Compensated absences 42,831 9,492 11,275 63,598 Net pension liability 337, , , ,318 Total noncurrent liabilities 380, , , ,916 Total liabilities 532, , ,677 1,139,274 Deferred Inflows of Resources Pension: Net diference between projected and actual earnings on pension plan investments 26,276 17,974 17,164 61,414 Net Position Net investment in capital assets 3,180, ,296 26,973,135 30,434,371 Unrestricted 208,993 (148,744) 224, ,735 Total net position $ 3,389,933 $ 131,552 $ 27,197,621 $ 30,719,

171 Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses, and Changes in Net Position For the Year Ended September 30, 2015 Bobby Jones Municipal Parking Golf Course Auditoriums Management Total Operating revenues: Charges for services $ 2,457,182 $ 83,282 $ 70,639 $ 2,611,103 Rents 9, ,552 27, ,816 Fines , ,867 Miscellaneous 8,122 1, ,007 Total operating revenues 2,474, , ,800 3,504,793 Operating expenses: Personal services 684, , ,005 1,533,200 Contractual services 378, , , ,885 Repairs and maintenance 1,458,249 22, ,752 1,601,525 Supplies and materials 126,489 16,607 29, ,148 Depreciation 227,207 37, , ,619 Total operating expenses 2,874, ,049 1,416,980 4,794,377 Operating income (loss) (399,544) (171,860) (718,180) (1,289,584) Nonoperating revenues: Investment earnings (loss) 8, ,112 13,624 Gain (loss) on disposition of capital assets Total nonoperating revenues 8, ,135 13,963 Income (loss) before transfers and special items (390,632) (170,944) (714,045) (1,275,621) Capital contributions ,637,286 9,637,286 Transfers in , , ,839 Change in net position (390,632) (9,105) 9,423,241 9,023,504 Net position - beginning, as restated 3,780, ,657 17,774,380 21,695,602 Net position - ending $ 3,389,933 $ 131,552 $ 27,197,621 $ 30,719,

172 Nonmajor Enterprise Funds Combining Statement of Cash Flows For the Year Ended September 30, 2015 Cash flows from operating activities Bobby Jones Municipal Parking Golf Course Auditoriums Management Total Cash received from customers $ 2,490,335 $ 337,225 $ 700,192 $ 3,527,752 Cash payments to vendors for goods and services (1,833,382) (206,187) (379,503) (2,419,072) Cash payments to employees for services (756,807) (271,722) (649,715) (1,678,244) Cash payments to other funds (139,581) (63,997) (100,000) (303,578) Net cash provided (used) by operating activities (239,435) (204,681) (429,026) (873,142) Cash flows from noncapital financing activities Transfers in , , ,839 Net cash provided (used) by noncapital financing activities , , ,839 Cash flows from capital and related financing activities Acquisition of capital assets (221,758) (2,627) (28,133) (252,518) Proceeds from sale of capital assets Net cash provided (used) by capital and related financing activities (221,621) (2,448) (28,110) (252,179) Cash flows from investing activities Interest on investments 9, ,075 14,438 Proceeds from sale and maturties of investments 453,127 50, ,397 Purchase of investments Net cash provided by investing activities 462,736 50,799 4, ,835 Net increase (decrease) in cash and cash equivalents 1,680 5,509 47,164 54,353 Cash and cash equivalents at beginning of year 144,123 21,669 51, ,821 Cash and cash equivalents at end of year $ 145,803 $ 27,178 $ 98,193 $ 271,

173 Reconciliation of operating income (loss) to net Bobby Jones Municipal Parking Golf Course Auditoriums Management Total cash provided (used) by operating activities Operating income (loss) $ (399,544) $ (171,860) $ (718,180) $ (1,289,584) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 227,207 37, , ,619 Pension expense (23,476) (14,679) 4,379 (33,776) Net (increase) decrease in: Accounts receivable (39) -- 1,392 1,353 Due from other governmental agencies (679) (202) Inventories (3,917) (30) -- (3,947) Prepaid items (1,971) (2,796) (32,380) (37,147) Net increase (decrease) in: Accounts payable (3,288) (39,438) 91 (42,635) Due to other governmental agencies Accrued wages 1, ,836 7,648 Compensated absences 13,371 (338) (318) 12,715 Unearned revenue 15,570 5, ,297 Other post-employment benefits (63,858) (20,166) (47,607) (131,631) Total adjustments 160,109 (32,821) 289, ,442 Net cash provided (used) by operating activities $ (239,435) $ (204,681) $ (429,026) $ (873,142) Noncash investing, capital, and financing activities Capital assets transferred from other funds $ -- $ -- $ 9,637,286 $ 9,637,

174 Water and Sewer System Enterprise Fund Combining Schedule of Net Position September 30, 2015 Renewal Interest Replacement & General Revenue & Sinking Improvement Reserve Account Accounts Account Account Assets Current assets: Cash and cash equivalents $ -- $ -- $ 3,730,986 $ 5,962,149 Investments ,835,614 20,511,421 Receivables (net): Accounts 3,593, Interest 1, ,242 32,491 Inventories Prepaid items 94, Total unrestricted current assets 3,689, ,588,842 26,506,061 Restricted current assets: Cash and cash equivalents 256, , Cash with fiscal agents -- 4,393, Investments 882,733 2,456, Accrued interest receivable 1,488 9, Total restricted current assets 1,140,809 7,573, Total current assets 4,830,486 7,573,147 16,588,842 26,506,061 Noncurrent assets: Capital assets: Non-depreciable: Land 6,040, Construction in progress 4, ,777,982 8,604,294 Depreciable: Buildings 25,132, , Utility systems 274,644, Equipment 1,150, ,487, ,087 Less accumulated depreciation (174,757,054) -- (6,003,134) (428,544) Total capital assets (net of accumulated depreciation) 132,214, ,264,331 9,102,837 Total assets 137,045,043 7,573,147 21,853,173 35,608,898 Deferred Outflows of Resources Non-pension: Deferred charge on refunding , Pension: Difference between expected and actual experience 10, , Changes in assumptions 279, , Contributions to the pension plan subsequent to the measurement date 1,710, , Total deferred outflows of resources $ 2,000,291 $ 398,263 $ 784,629 $

175 Utility Utility Construction Stores Accounts Account Totals $ -- $ -- $ 9,693, ,347, ,593, , , , , ,106 47,004,686 1,890, ,861, ,393,693 6,505, ,843,845 11, ,958 8,406, ,120,851 8,406, ,106 64,125, ,040,560 9,934, ,320, ,134, ,644, ,633 17,343 9,778,076 (195,633) (16,177) (181,400,542) 9,934,575 1, ,517,466 18,341, , ,643, , , , , ,373,197 $ -- $ 3,737 $ 3,186,920 (continued) 159

176 Water and Sewer System Enterprise Fund Combining Schedule of Net Position September 30, 2015 (Concluded) Renewal Interest Replacement & General Revenue & Sinking Improvement Reserve Account Account Account Account Liabilities Current liabilities: Accounts payable $ 312,436 $ -- $ 260,473 $ 1,512,554 Retainages payable , ,790 Due to other governmental agencies Interfund payables 255, Accrued interest payable Accrued wages 222, , Compensated absences 370, , Unearned revenue 212, Total unrestricted current liabilities 1,373, ,064 1,826,344 Current liabilities payable from restricted assets: Accounts payable -- 1, Retainages payable Accrued interest payable -- 1,248, Customer deposits 1,140, Revenue bonds & loans payable - current -- 3,145, payable from restricted assets 1,140,809 4,395, Total current liabilities 2,514,342 4,395, ,064 1,826,344 Noncurrent liabilities: Compensated absences 356, , Revenue bonds, loans payable and unamortized premium less current maturities -- 52,199, Net pension liability 11,442, ,816, Total noncurrent liabilities 11,798,490 52,199,553 4,886, Total liabilities 14,312,832 56,595,096 5,314,838 1,826,344 Deferred Inflows of Resources Pension: Net diference between projected and actual earnings on pension plan investments 891, , Net Position Net investment in capital assets 132,214,557 (52,638,990) 5,264,331 9,102,837 Restricted: Debt service -- 6,322, Construction -- (2,307,300) Unrestricted (8,373,468) 11,683,379 24,679,717 Total net position $ 123,841,089 $ (48,623,686) $ 16,947,710 $ 33,782,

177 Utility Utility Construction Stores Accounts Account Totals $ -- $ 123,492 $ 2,208, , , , , , , , , ,539 3,958,480 81, ,433 39, , ,248, ,140, ,145, , ,657, , ,539 9,615, , , ,199, ,564 16,406, ,217 69,034, , ,756 78,649, ,496 1,278,163 9,934,575 1, ,878, ,322,604 8,285, ,978, (267,409) 27,722,219 $ 18,220,487 $ (266,243) $ 143,901,

178 Water and Sewer System Enterprise Fund Combining Schedule of Revenues, Expenses, and Changes in Net Position For the Year Ended September 30, 2015 Renewal Interest Replacement & General Revenue & Sinking Improvement Reserve Account Accounts Account Account Operating revenues Charges for services Water sales $ 18,704,560 $ -- $ -- $ -- Sewer collection fees 23,581, Connection fees ,007 Reconnection fees 151, Other Rents 21, Miscellaneous 123, Total operating revenues 42,583, ,007 Operating expenses Personal services 9,924, Contractual services 6,024, , Repairs and maintenance 1,338, ,053 1,762,399 Supplies and materials 2,193, Depreciation 8,173, , ,305 Other 33, Total operating expenses 27,686, ,938,920 1,942,704 Operating income (loss) 14,896, (1,938,920) (1,681,697) Nonoperating revenues (expenses) Grant income (8,439) Investment earnings (loss) 106,190 45, , ,236 Interest expense -- (947,227) Loan and bond issue expense -- (53,624) Gain (loss) on disposition of capital assets (140,382) (771,572) Total nonoperating revenues (expenses) 106,190 (955,845) 24,370 (594,775) Income (loss) before transfers 15,002,737 (955,845) (1,914,550) (2,276,472) Transfers in -- 4,390, ,265,597 Transfers out (463,576) -- (3,166,902) -- Change in net position 14,539,161 3,434,258 (5,081,452) 7,989,125 Net position - beginning, as restated 109,301,928 (52,057,944) 22,029,162 25,793,429 Net position - ending $ 123,841,089 $ (48,623,686) $ 16,947,710 $ 33,782,

179 Utility Utility Construction Stores Accounts Account Eliminations Totals $ -- $ -- $ -- $ 18,704, ,581, , , ,339,294 (1,339,294) , , ,339,294 (1,339,294) 42,844, , ,940, , ,758,532 27,789 1, ,852, ,383,180 (1,339,294) 2,237, ,911, ,000 27,789 1,476,211 (1,339,294) 31,733,089 (27,789) (136,917) -- 11,111, (8,439) 9,131 (1,720) , (947,227) (53,624) -- (9,329,516) (10,241,470) (9,320,385) (1,720) -- (10,742,165) (9,348,174) (138,637) , (14,655,700) -- (11,025,222) -- 14,655, (20,373,396) (138,637) ,059 38,593,883 (127,606) ,532,852 $ 18,220,487 $ (266,243) $ -- $ 143,901,

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181 Internal Service Funds Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governments on a cost-reimbursement basis. Equipment Maintenance - This fund accounts for the cost of operating a maintenance facility used to service all City motor vehicles. Information Technology - This fund accounts for the cost of providing hardware and software information systems and technologies to other City Departments. General Benefits and Insurance - This fund accounts for the administration of compensated absences for governmental fund departments and the City s selfinsurance programs. Equipment Replacement - This fund accounts for the capital funding and replacement of motor vehicles and other equipment. 165

182 Internal Service Funds Combining Statement of Net Position September 30, 2015 General Benefits Equipment Information and Equipment Maintenance Technology Insurance Replacement Total Assets Current assets: Cash and cash equivalents $ -- $ 157,596 $ 3,200,983 $ 586,233 $ 3,944,812 Investments ,172 11,012,259 2,016,802 13,571,233 Receivables (net): Accounts Interest ,159 3,505 39,468 Due from other funds , ,663 Inventories 63, ,911 Prepaid items 1,903 9,304 2, ,837 Total current assets 66, ,876 14,256,694 2,606,540 17,639,476 Noncurrent assets: Capital assets: Improvements 897, , ,962 1,547,291 3,011,865 Equipment 302,644 2,358,211 52,586 7,669,938 10,383,379 Construction in progress 1,650 42, , ,633 Less accumulated depreciation (736,091) (2,224,677) (109,116) (6,303,484) (9,373,368) Total capital assets (net of accumulated depreciation) 465, , ,432 3,020,728 4,172,509 Other assets: Advance to other funds , ,572 Total noncurrent assets 465, , ,004 3,020,728 4,294,081 Total assets 532,219 1,193,372 14,580,698 5,627,268 21,933,557 Deferred Outflow of Resources Pension: Difference between expected and actual experience ,859 Changes in assumptions 25,551 22, ,550 Contributions to the pension plan subsequent to the measurement date 144,200 99, ,842 Total deferred outflows of resources 170, , ,251 Liabilities Current liabilities: Accounts payable 194,056 89, , ,615 Retainages payable ,480 1,480 Interfund payables 65, ,427 Accrued Interest payable Liability for unpaid claims ,657, ,657,380 Accrued wages 18,416 32, ,091 Compensated absences 30,306 40,856 2,312, ,383,379 Total current liabilities 308, ,775 5,072,372 2,020 5,545,538 Noncurrent liabilities: Compensated absences 29,117 39,254 2,221, ,289,912 Net pension liability 1,047, , ,990,675 Total noncurrent liabilities 1,076, ,302 2,221, ,280,587 Total liabilities 1,385,115 1,145,077 7,293,913 2,020 9,826,125 Deferred Inflows of Resources Pension: Net diference between projected and actual earnings on pension plan investments 81,615 73, ,083 Net Position Net investment in capital assets 465, , ,432 3,020,728 4,172,509 Unrestricted (1,229,635) (385,147) 7,084,353 2,604,520 8,074,091 Total net position $ (763,782) $ 98,349 $ 7,286,785 $ 5,625,248 $ 12,246,

183 Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position Year Ended September 30, 2015 General Benefits Equipment Information and Equipment Maintenance Technology Insurance Replacement Total Operating revenues Charges for services $ 2,648,523 $ 1,850,000 $ 9,364,448 $ 571,000 $ 14,433,971 Miscellaneous 40,264 2, , ,762 Total operating revenues 2,688,787 1,852,939 9,619, ,000 14,731,733 Operating expenses Personal services 708,166 1,106,981 2,307, ,122,424 Contractual services 358, ,780 8,179,808 7,333 8,745,394 Repairs and maintenance 53, ,298 6,319 12, ,985 Supplies and materials 1,517,670 53,983 66,095 73,200 1,710,948 Depreciation 50, ,593 21, , ,332 Total operating expenses 2,688,941 2,042,635 10,581, ,395 16,106,083 Operating income (loss) (154) (189,696) (962,105) (222,395) (1,374,350) Nonoperating revenues (expenses) Investment earnings (loss) (996) 6, ,983 22, ,493 Interest expense (777) (777) Gain (loss) on disposition of capital assets ,089 24,293 Total nonoperating revenues (expenses) (1,763) 6, ,983 46, ,009 Income (loss) before transfers (1,917) (182,792) (815,122) (175,510) (1,175,341) Transfers out (4,282) -- (4,282) Change in net position (1,917) (182,792) (819,404) (175,510) (1,179,623) Net position-beginning, as restated (761,865) 281,141 8,106,189 5,800,758 13,426,223 Net position - ending $ (763,782) $ 98,349 $ 7,286,785 $ 5,625,248 $ 12,246,

184 Internal Service Funds Combining Statement of Cash Flows Year Ended September 30, 2015 General Benefits Equipment Information and Equipment Maintenance Technology Insurance Replacement Total Cash flows from operating activities Cash received from customers and users $ 12,660 $ 2,939 $ 1,591,555 $ -- $ 1,607,154 Cash received from other funds for goods and services 2,678,466 1,850,000 8,027, ,000 13,126,917 Cash payments to vendors for goods and services (1,757,854) (672,995) (2,043,949) (86,213) (4,561,011) Cash payments to employees for services (788,355) (1,177,714) (2,206,168) -- (4,172,237) Cash payments to other funds (185,597) -- (176,323) (7,000) (368,920) Claims paid (6,207,300) -- (6,207,300) Net cash provided (used) by operating activities (40,680) 2,230 (1,014,734) 477,787 (575,397) Cash flows from noncapital financing activities Interfund loan borrowings 65, ,427 Transfers out (4,282) -- (4,282) Repayment of loan to/from other fund (40,754) -- 1,794, ,754,020 Interest on loan to/from other fund (777) -- 74, ,261 Net cash provided (used) by noncapital financing activities 23, ,864, ,888,426 Cash flows from capital and related financing activities Acquisition of capital assets (18,923) (263,969) (544) (640,173) (923,609) Proceeds from sale of capital assets ,089 24,293 Net cash provided (used) in capital and related financing activities (18,913) (263,775) (544) (616,084) (899,316) Cash flows from investing activities Interest on investments (997) 7,284 79,910 23, ,560 Proceeds from sale and maturities -- of investments 31, , , ,683 1,192,796 Purchase of investments Net cash provided (used) by investing activities 30, , , ,046 1,302,356 Net increase (decrease) in cash and cash equivalents (4,813) 32,467 1,458, ,749 1,716,069 Cash and cash equivalents at beginning of year 4, ,129 1,742, ,484 2,228,743 Cash and cash equivalents at end of year $ -- $ 157,596 $ 3,200,983 $ 586,233 $ 3,944,

185 General Benefits Equipment Information and Equipment Maintenance Technology Insurance Replacement Total Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) $ (154) $ (189,696) $ (962,105) $ (222,395) $ (1,374,350) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 50, ,593 21, , ,332 Pension expense (35,039) (1,376) (36,415) Net (increase) decrease in: Accounts receivable 2, ,339 Inventories 12, ,516 Prepaid items 555 7,689 (730) -- 7,514 Net increase (decrease) in: Accounts payable (25,797) 41,377 (53,733) -- (38,153) Liability for unpaid claims (120,888) -- (120,888) Due to other governmental agencies (894) (894) Accrued wages 1,957 6, ,905 Compensated absences 6,866 15, , ,879 Other post-employment benefits (53,973) (92,209) (146,182) Total adjustments (40,526) 191,926 (52,629) 700, ,953 Net cash provided (used) by operating activities $ (40,680) $ 2,230 $ (1,014,734) $ 477,787 $ (575,397) Noncash investing, capital, and financing activities None 169

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187 Fiduciary Funds Trust Funds Trust funds are used to account for assets held by the government in a trustee capacity. They are accounted for in essentially the same manner as enterprise funds since capital maintenance is critical. Pension Trust Funds General Employees' Defined Benefit Pension - This fund is used to account for the accumulation of resources for pension benefit payments to participants of the City's General Employees' Defined Benefit Pension Plan. Police Officers' Defined Benefit Pension - This fund is used to account for the accumulation of resources for pension benefit payments to participants of the City's Police Officers' Defined Benefit Pension Plan. Firefighters' Defined Benefit Pension - This fund is used to account for the accumulation of resources for pension benefit payments to participants of the City's Firefighters' Defined Benefit Pension Plan. General Employees Defined Contribution Retirement Plan - This fund is used to account for both the City and employee contributions that would accrue to the employees, and also to account for the additional 2 percent City contribution that is budgeted annually for administrative costs. Other Post-Employment Benefits Trust Fund - This fund is used to account for the future liability of costs for medical/prescription/dental coverage, extended life insurance coverage and benefits under the Employee Assistance Program available to retirees and their dependents. Agency Funds Agency funds are used to account for assets held by the government as an agent for individuals, private organizations and other governmental units. They are custodial in nature and do not involve the measurement of results of operations. Impact Fees - This fund is used to account for fees collected from citizens and disbursed to Sarasota County. 171

188 Fiduciary Funds Combining Statement of Fiduciary Net Position September 30, 2015 Pension Trust Funds General Police General Employees' Officers' Firefighters' Employees Other Post- Defined Defined Defined Defined Employment Benefit Benefit Benefit Contribution Benefits Pension Pension Pension Retirement (OPEB) Total Assets Cash and cash equivalents $ 1,115,226 $ 340,451 $ (424) $ 199,830 $ 500,629 $ 2,155,712 Investments: Money market funds , ,343 U.S. Government securities ,245,317 1,245,317 U.S. Government agency securities ,910,292 1,910,292 Common and preferred stock ,317,711 21,317,711 Corporate bonds and notes ,246,973 3,246,973 Domestic mutual funds ,832, ,832,702 Bond mutual funds ,206, ,206,223 Real estate funds ,629,262 4,629,262 Mortgage backed securities , ,046 Municipal securties Foreign stocks ,399,368 4,399,368 Foreign mutual funds , ,999 Foreign bond mutual funds , , ,100 Total investments ,475,632 38,715,704 43,191,336 Receivables (net): Accounts ,899 1, ,987 Interest and dividends ,259 91,489 Total receivables ,129 92, ,476 Other assets: Prepaid items ,612 1,612 Equipment Less accumulated depreciation Total other assets ,612 1,612 Total assets 1,115, ,451 (424) 4,866,591 39,310,292 45,632,136 Deferred Outflow of Resources Pension: Difference between expected and actual experience Changes in assumptions Total deferred outflows of resources Liabilities Accounts payable ,000 55,083 58,083 Liability for unpaid claims , ,941 Accrued wages Compensated absences Unearned revenue OPEB liability Net pension liability , ,082 Total liabilities , , ,126 Deferred Inflows of Resources Pension: Net diference between projected and actual earnings on pension plan investments , ,175 Net Position Restricted for pension and OPEB benefits $ 1,115,226 $ 340,451 $ (424) $ 4,846,696 $ 38,674,268 $ 44,976,

189 Fiduciary Funds Combining Statement of Changes in Fiduciary Net Position For the Year Ended September 30, 2015 Additions Contributions: Plan members -- Pension Trust Funds General Police General Employees' Officers' Firefighters' Employees Other Post- Defined Defined Defined Defined Employment Benefit Benefit Benefit Contribution Benefits Pension Pension Pension Retirement (OPEB) Total $ $ -- $ -- $ 515,299 $ 1,369,258 $ 1,884,557 Employer City of Sarasota ,535 5,244,971 5,879,506 Sarasota County , ,986 State on behalf payments, through General Fund Other , , ,798 Total contributions ,216,351 7,389,496 8,605,847 Investment income : Net increase (decrease) in fair value of investments (80,199) 959, ,915 Interest , , ,354 Dividends , ,527 Total investment income (loss) (51,993) 1,801,789 1,749,796 Less investment expense (3,312) (373,268) (376,580) Net investment income (loss) (55,305) 1,428,521 1,373,216 Total additions ,161,046 8,818,017 9,979,063 Deductions Benefits ,630 7,669,443 7,782,073 Other benefits , ,462 Administrative expenses , , ,819 Refunds of contributions Total deductions ,098 9,009,256 9,164,354 Net increase (decrease) ,005,948 (191,239) 814,709 Net Position Restricted for Pension and OPEB Benefits Beginning of year, restated 140,654, ,028, ,507,240 3,840,748 38,865, ,896,749 End of Year $ 140,654,804 $ 196,028,450 $ 134,507,240 $ 4,846,696 $ 38,674,268 $ 514,711,

190 Agency Funds Combining Statement of Changes in Assets and Liabilities Year Ended September 30, 2015 Balance Balance October 1, September 30, 2014 Additions Deductions 2015 Impact Fees Assets Cash and cash equivalents 1, , ,380 53,710 Investments 8, , Accrued interest receivable Total assets 9, , ,840 53,805 Liabilities Accrued liabilities 9, , ,840 53,805 Total liabilities 9, , ,840 53,805 Total - Agency Funds Assets Cash and cash equivalents 1, , ,380 53,710 Investments 8, , Accrued interest receivable Total assets 9, , ,840 53,805 Liabilities Accrued liabilities 9, , ,840 53,805 Total liabilities $ 9,872 $ 304,773 $ 260,840 $ 53,

191 Statistical Section This part of the City of Sarasota s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City s overall financial health. Contents Financial Trends These schedules contain trend information to help the reader understand how the City s financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the City s most significant local revenue sources. Debt Capacity These schedules present information to help the reader assess the affordability of the City s current levels of outstanding debt and the City s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City s financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City s financial report relates to the services the City provides and the activities it performs. Page Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 175

192 Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Governmental activities Fiscal Year Net investment in capital assets $ 160,348,362 $ 158,951,011 $ 148,111,650 $ 160,182,484 Restricted 56,835,283 59,877,127 62,107,977 62,009,064 Unrestricted (deficit) (60,901,080) 2,663,395 10,235,937 13,946,108 Total governmental activities net position $ 156,282,565 $ 221,491,533 $ 220,455,564 $ 236,137,656 Business-type activities Net investment in capital assets $ 151,774,709 $ 143,855,792 $ 135,645,189 $ 113,546,562 Restricted 12,301,216 12,730,059 12,741,195 14,824,001 Unrestricted 35,742,792 52,248,702 53,901,699 50,327,406 Total business-type activities net position $ 199,818,717 $ 208,834,553 $ 202,288,083 $ 178,697,969 Primary government Net investment in capital assets $ 312,123,071 $ 302,806,803 $ 283,756,839 $ 273,729,046 Restricted 69,136,499 72,607,186 74,849,172 76,833,065 Unrestricted (25,158,288) 54,912,097 64,137,636 64,273,514 Total primary government net position $ 356,101,282 $ 430,326,086 $ 422,743,647 $ 414,835,625 Note: In fiscal year 2015, the City adopted the provisions of GASB Statement Nos. 68 and 71. As restatement of all prior periods is not practical, the cumulative effect of applying these statements is reported as a restatement of beginning net position as of October 1,

193 Fiscal Year $ 156,114,642 $ 149,451,384 $ 137,954,949 $ 133,000,217 $ 129,822,789 $ 117,220,351 60,339,093 66,977,332 70,136,846 59,984,371 50,491,705 50,070,947 17,821,458 28,875,274 30,804,957 32,414,729 29,107,634 24,396,995 $ 234,275,193 $ 245,303,990 $ 238,896,752 $ 225,399,317 $ 209,422,128 $ 191,688,293 $ 115,645,768 $ 97,801,582 $ 93,364,115 $ 112,285,316 $ 109,539,036 $ 101,629,742 14,187,540 28,263,881 38,121,603 22,979,650 22,313,235 25,619,374 39,713,500 17,126,986 9,905,510 10,509,484 11,104,565 11,432,134 $ 169,546,808 $ 143,192,449 $ 141,391,228 $ 145,774,450 $ 142,956,836 $ 138,681,250 $ 271,760,410 $ 247,252,966 $ 231,319,064 $ 245,285,533 $ 239,361,825 $ 218,850,093 74,526,633 95,241, ,258,449 82,964,021 72,804,940 75,690,321 57,534,958 46,002,260 40,710,467 42,924,213 40,212,199 35,829,129 $ 403,822,001 $ 388,496,439 $ 380,287,980 $ 371,173,767 $ 352,378,964 $ 330,369,

194 Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) Expenses Governmental activities: General government 10,178,446 Fiscal Year $ $ 15,959,585 $ 13,535,677 $ 12,479,655 Public safety 35,030,117 41,197,141 37,595,883 37,040,548 Physical environment 7,906,172 3,534,031 3,202,880 3,654,521 Transportation 11,549,091 7,230,305 7,379,994 7,397,017 Culture and recreation 3,499,422 3,503,809 3,294,003 3,384,150 Economic environment 4,417,493 4,923,941 7,685,608 9,057,540 Interest on long-term debt 3,789,069 3,908,368 4,187,503 4,519,066 Total governmental activities expenses 76,369,810 80,257,180 76,881,548 77,532,497 Business-type activities: Water and Sewer 43,023,887 32,303,663 29,244,145 28,810,585 Van Wezel 11,058,586 10,305,552 9,077,553 8,997,179 Solid Waste 9,790,922 9,774,612 9,093,671 8,806,639 Bobby Jones Golf Course 2,874,348 2,890,161 2,698,233 2,826,777 Municipal Auditoriums 503, , , ,380 Sports Stadium Parking Management 1,416,980 1,314, , ,703 Total business-type activities expenses 68,667,772 57,138,834 51,538,009 50,993,263 Total primary government expenses $ 145,037,582 $ 137,396,014 $ 128,419,557 $ 128,525,760 Program Revenues Governmental activities: Charges for services General government $ 1,635,077 $ 1,261,060 $ 1,051,097 $ 842,894 Public safety 7,913,312 5,455,428 3,551,631 2,746,195 Physical environment 99, , ,014 71,223 Transportation 707, , , ,542 Culture and recreation 403, , , ,979 Economic environment Operating grants and contributions 10,941,476 7,949,480 10,384,312 12,777,162 Capital grants and contributions 9,010,585 7,053,950 6,113,794 7,717,032 Total governmental activities program revenues 30,710,723 22,639,649 21,855,454 24,774,027 Business-type activities: Charges for Services Water and Sewer 42,844,313 39,643,226 37,496,905 36,864,600 Van Wezel 10,757,986 9,354,299 8,208,844 8,065,967 Solid Waste 10,549,474 10,271,649 10,303,491 10,354,192 Bobby Jones Golf Course 2,474,804 2,477,163 2,382,372 2,701,294 Municipal Auditoriums 331, , , ,282 Sports Stadium Parking Management 698, , , ,193 Operating grants and contributions 951, , , ,473 Capital grants and contributions Total business-type activities program revenues 68,608,178 63,329,016 59,849,643 59,773,001 Total primary government program revenues $ 99,318,901 $ 85,968,665 $ 81,705,097 $ 84,547,

195 Fiscal Year $ 12,945,611 $ 14,000,760 $ 12,918,248 $ 10,287,848 $ 10,899,553 $ 7,821,379 36,325,440 34,182,957 33,915,523 37,511,528 32,746,468 31,383,128 3,333,750 3,138,997 8,202,267 3,492,376 3,610,591 3,766,791 7,288,847 7,275,556 7,619,536 8,355,780 8,621,398 8,078,302 12,259,064 2,043,875 1,880,557 2,167,296 1,815,131 1,395,900 18,211,787 9,239,967 7,076,916 6,936,439 8,995,712 13,711,861 4,740,436 4,692,235 4,191,843 3,899,134 2,279,026 1,953,660 95,104,935 74,574,347 75,804,890 72,650,401 68,967,879 68,111,021 28,570,324 28,968,721 29,568,006 30,199,955 29,820,490 28,826,047 8,508,698 8,390,401 8,203,957 9,149,354 11,349,215 10,772,524 9,129,783 10,010,227 9,691,991 9,818,963 10,042,121 10,101,444 2,855,291 2,903,190 3,074,905 3,113,707 2,949,369 2,855, , , , , , , ,588 1,287,944 1,466,807 1,589,071 1,466, , , , , , ,678 50,363,982 51,613,253 53,177,848 55,295,781 57,109,675 55,022,525 $ 145,468,917 $ 126,187,600 $ 128,982,738 $ 127,946,182 $ 126,077,554 $ 123,133,546 $ 880,263 $ 769,980 $ 785,709 $ 1,161,479 $ 1,320,772 $ 1,311,316 2,575,000 3,152,899 2,580,588 3,506,335 2,756,092 3,080,895 47,453 59, ,334 82,293 21,348 34, , , , , , ,575 70,915 77,959 58,749 53,716 38,527 48, , ,183,083 12,007,830 15,775,263 8,404,372 7,420,007 13,474,322 9,357,538 6,929,779 6,112,705 6,595,900 7,909,664 6,003,878 30,451,335 23,306,062 25,816,217 19,984,243 19,863,878 24,163,959 34,657,561 32,214,124 30,901,016 32,177,630 32,296,055 27,529,350 7,873,403 7,529,568 7,029,343 7,026,517 9,046,598 9,080,683 9,985,502 10,472,696 10,317,753 10,822,621 10,615,043 10,342,746 2,663,769 2,628,088 3,055,072 3,158,508 3,320,376 3,177, , , , , , , , , , , , , , , , , , , , , , , ,440 2,530, , ,808,507 53,966,584 52,949,356 54,961,300 57,298,332 52,135,644 $ 89,259,842 $ 77,272,646 $ 78,765,573 $ 74,945,543 $ 77,162,210 $ 76,299,

196 Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) - continued Fiscal Year Net (Expense)/Revenue Government activities $ (45,659,087) $ (57,617,531) $ (55,026,094) $ (52,758,470) Business type activities (59,594) 6,190,182 8,311,634 8,779,738 Total primary government net expense $ (45,718,681) $ (51,427,349) $ (46,714,460) $ (43,978,732) General Revenues and Other Changes in Net Position Government activities: Taxes Property taxes $ 26,527,993 $ 25,269,921 $ 22,584,230 $ 22,364,901 Gasoline taxes 2,432,847 2,358,159 2,310,912 2,294,724 Sales tax 11,808,144 10,812,138 10,036,788 9,308,028 Franchise fees 4,767,877 4,800,067 4,472,348 4,600,464 Public service taxes 10,188,427 10,115,459 10,084,418 9,838,911 Occupational licenses 893, , , ,496 Other taxes 45,873 40,957 41,405 40,657 State revenue sharing, unrestricted 1,828,400 1,790,313 1,765,785 1,750,367 Investment earnings 1,014, , ,291 1,102,335 Miscellaneous 3,910,383 1,577,655 1,992,276 1,721,284 Gain (loss) on disposition of capital assets 93, , , ,367 Transfers (9,412,865) 135,244 (15,571,310) 758,608 Special items Total governmental activities 54,097,546 58,653,500 39,344,002 55,470,142 Business-type activities: Investment earnings 656, , , ,361 Gain (loss) on disposition of capital assets 70,009 72,277 (465,997) 13,771 Special items ,152,170 Transfers 9,412,865 (135,244) 15,571,310 (758,608) Total business-type activities 10,139, ,288 15,278, ,694 Total primary government $ 64,236,558 $ 59,009,788 $ 54,622,482 $ 56,466,836 Change in Net Position Governmental activities $ 8,438,459 $ 1,035,969 $ (15,682,092) $ 2,711,672 Business-type activities 10,079,418 6,546,470 23,590,114 9,776,432 Total primary government $ 18,517,877 $ 7,582,439 $ 7,908,022 $ 12,488,

197 Fiscal Year $ (68,695,553) $ (51,268,285) $ (49,988,673) $ (52,666,158) $ (49,104,001) $ (43,947,062) 8,444,525 2,353,331 (228,492) (334,481) 188,657 (2,886,881) $ (60,251,028) $ (48,914,954) $ (50,217,165) $ (53,000,639) $ (48,915,344) $ (46,833,943) $ 23,028,286 $ 25,284,973 $ 27,858,165 $ 31,552,053 $ 28,146,368 $ 22,036,679 2,344,198 2,419,349 2,479,705 2,623,552 2,977,993 3,064,861 8,976,287 8,779,577 9,104,589 10,435,829 11,803,299 12,631,196 5,013,645 4,905,213 5,319,627 5,208,466 5,578,299 5,451,451 9,621,859 9,750,249 9,641,138 9,814,032 9,750,102 9,899, , , , , , ,807 41,254 42,642 46,754 31,997 29,625 30,412 1,744,723 1,740,465 1,751,959 1,810,801 1,868,955 2,176,497 1,429,736 2,536,040 5,151,426 5,581,277 6,144,768 4,083,309 1,468,024 1,578,444 1,840,645 1,390,503 1,496,111 1,269,978 88,361 1,578 36,284 1,108,489 (42,716) 895,995 (180,957) (90,049) (535,749) (1,815,427) (1,639,977) (991,131) (685,914) ,624,780 57,675,523 63,486,108 68,643,347 66,837,836 61,288, , ,582 1,099,058 1,266,216 2,153,440 1,791,699 4,669 27,305 14,250 70, ,512 13,143 17,222,926 (1,277,046) (5,803,787) ,957 90, ,749 1,815,427 1,639, ,131 17,909,804 (552,110) (4,154,730) 3,152,095 4,086,929 2,795,973 $ 71,534,584 $ 57,123,413 $ 59,331,378 $ 71,795,442 $ 70,924,765 $ 64,084,634 $ (11,028,820) $ 6,407,238 $ 13,497,435 $ 15,977,189 $ 17,733,835 $ 17,341,599 26,354,359 1,801,221 (4,383,222) 2,817,614 4,275,586 (90,908) $ 15,325,539 $ 8,208,459 $ 9,114,213 $ 18,794,803 $ 22,009,421 $ 17,250,

198 Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year General Fund Reserved Unreserved Total general fund All Other Governmental Funds Reserved Special revenue funds Debt service funds Capital projects funds Unreserved, reported in: Special revenue funds Debt service funds Capital projects funds Total all other governmental funds (a) (a) (a) (a) General Fund Nonspendable $ 473,779 $ 332,712 $ 396,743 $ 367,739 Restricted Committed 4,114,022 1,406,468 2,937,500 2,937,500 Assigned 1,373, ,611 1,134,551 2,373,081 Unassigned 16,530,893 15,375,543 15,154,314 15,156,744 Total general fund $ 22,492,067 $ 17,682,334 $ 19,623,108 $ 20,835,064 All Other Governmental Funds Nonspendable $ 6,141 $ 22,890 $ -- $ 14,149 Restricted 58,284,499 63,590,152 66,463,377 66,918,475 Committed 2,160,116 1,772,765 1,608,485 1,801,025 Assigned 35, , , ,853 Unassigned (123,952) (128,964) (135,556) (159,750) Total all other governmental funds $ 60,362,524 $ 65,615,497 $ 68,773,036 $ 69,451,752 Total Fund Balance All Governmental Funds $ 82,854,591 $ 83,297,831 $ 88,396,144 $ 90,286,816 (a) GASB 54 implemented beginning Fiscal Year

199 Fiscal Year $ 1,249,786 $ 1,380,908 $ 1,717,963 $ 2,950,801 $ 2,438,328 20,592,274 19,124,755 20,351,671 19,416,753 18,264,778 $ 21,842,060 $ 20,505,663 $ 22,069,634 $ 22,367,554 $ 20,703,106 $ 5,516,287 $ 5,193,504 $ 8,600,542 $ 6,092,975 $ 12,707,155 8,280,918 10,022,299 7,713,962 7,012,869 6,543,937 18,835,383 43,605,787 45,022,779 46,342,999 2,936,696 53,545,951 57,083,606 48,778,372 36,233,935 29,272,247 (5,808) ,347 1,143, $ 86,755,078 $ 117,048,857 $ 110,115,655 $ 95,682,778 $ 51,460, (a) $ $ 354, ,937,500 2,951,256 15,412,227 21,655,891 $ $ $ 33,705 65,316,848 1,815, ,088 (10,060) 68,078,206 89,734,

200 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year Revenues Taxes $ 41,587,184 $ 38,772,510 $ 35,812,457 $35,365,938 Franchise fees 4,767,877 4,800,067 4,472,348 4,600,464 Special assessments 105, , , ,980 Licenses and permits 6,756,920 4,322,380 2,384,947 1,735,414 Intergovernmental 30,799,648 26,888,120 28,101,587 31,119,574 Charges for services 3,162,816 2,782,325 2,134,035 1,885,257 Charges to other funds 4,428,888 4,403,460 4,320,128 4,373,824 Fines and forfeits 1,377,080 1,142,361 1,361,070 1,057,173 Investment earnings 811, , , ,507 Miscellaneous 5,891,767 2,140,325 2,680,206 4,315,195 Total revenues 99,689,274 85,869,046 81,520,098 85,484,326 Expenditures Current: General government 14,062,592 17,753,644 16,869,374 16,489,183 Public safety 36,779,802 36,210,675 33,535,625 33,159,337 Physical environment 7,612,914 3,211,811 3,065,819 3,439,762 Transportation 7,285,758 3,287,424 3,342,320 3,502,232 Culture and recreation 1,654,757 1,439,845 1,310,019 1,489,101 Economic environment 4,414,891 4,809,019 7,603,733 8,954,673 Debt service: Principal 4,553,534 4,372,345 4,412,802 4,252,633 Interest and other charges 4,428,107 5,042,815 5,094,256 5,144,024 Bond issuance costs 270, Capital outlay 17,512,659 15,247,920 8,841,241 9,153,022 Total expenditures 98,575,808 91,375,498 84,075,189 85,583,967 Excess (deficiency) of revenues over (under) expenditures 1,113,466 (5,506,452) (2,555,091) (99,641) Other financing sources (uses) Transfers in 10,562,830 10,541,143 10,448,627 9,630,589 Transfers out (10,334,127) (10,133,004) (9,784,208) (8,978,229) General obligation bonds issued 33,855, Special obligation bonds issued Premium on bonds issued 2,705, Payment to bond escrow agent (38,346,036) Total other financing sources (uses) (1,556,706) 408, , ,360 Net change in fund balances $ (443,240) $ (5,098,313) $ (1,890,672) $ 552,719 Capital outlay in functional categories $ 267,590 $ 399,043 $ 956,795 $ 1,122,101 Debt service as a percentage of noncapital expenditures 11.12% 12.43% 12.80% 12.48% 184

201 Fiscal Year $ 35,932,144 $ 38,257,887 $ 42,518,281 $ 44,039,066 $ 40,974,849 $ 35,374,904 5,013,645 4,905,213 5,319,627 5,208,466 5,578,298 5,451, , ,000 95,000 95,000 80, ,852 2,312,725 2,429,056 1,752,050 3,543,118 2,771,644 2,991,586 36,438,155 28,731,606 30,723,779 27,018,952 27,521,916 33,543,551 1,743,481 1,805,694 2,102,245 2,109,925 2,432,373 2,560,540 4,391,908 4,365,067 4,419,805 4,349,457 5,452,096 5,123, ,025 1,005, , ,839 1,320,276 1,121,965 1,207,942 2,193,890 4,487,271 4,920,722 5,176,574 3,569,826 1,784,962 1,713,286 1,708,684 2,466,442 2,432,516 2,129,211 89,593,987 85,507,380 94,019,959 94,663,987 93,740,542 91,978,728 15,921,304 13,972,130 14,549,145 15,398,101 17,283,464 13,482,866 31,803,912 33,481,146 35,232,364 36,501,295 33,432,710 30,796,766 3,129,215 2,883,287 8,174,910 3,528,637 3,792,915 3,895,159 3,490,199 3,770,379 4,831,724 5,569,802 5,885,394 5,473,201 10,538, , , , , ,289 18,113,223 9,137,088 7,042,409 6,890,211 8,883,313 13,701,861 6,913,110 7,753,493 4,456,205 5,188,507 4,796,158 5,270,000 5,099,613 4,938,083 3,913,467 3,689,685 1,655,075 1,124, , ,495 64,113 47, , ,787,140 37,564,418 30,625,828 7,318,614 15,852,224 8,346, ,974, ,380, ,191,943 84,597,017 92,729,694 82,451,259 (27,380,279) (28,873,618) (15,171,984) 10,066,970 1,010,848 9,527,469 9,258,683 10,600,893 12,127,023 9,065,765 14,472,479 9,995,906 (9,001,445) (10,684,657) (12,651,808) (10,797,778) (16,177,625) (11,053,338) ,800,000 46,305, ,260, ,066, , ,517,238 (83,764) 20,541,215 4,067,987 44,876,343 (1,057,432) $ (18,863,041) $ (28,957,382) $ 5,369,231 $ 14,134,957 $ 45,887,191 $ 8,470,037 $ 876,582 $ 730,919 $ 646,034 $ 1,243,974 $ 1,151,733 $ 1,339, % 16.68% 10.74% 11.68% 8.52% 8.79% 185

202 Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) Fiscal Year Real Property Less: Total Taxable Total Ended Residential Commercial Industrial Personal Tax-Exempt Assessed Direct September 30, Property Property Property Property Property Value Rate 2015 $5,535,967 $1,590,419 $ 2,072,200 $ 441,444 $2,044,552 $ 7,595, ,552,218 1,770,405 1,814, ,080 3,356,200 7,193, ,896,420 1,792,974 1,929, ,505 3,199,822 6,874, ,808,393 1,726,992 1,974, ,377 3,152,931 6,842, ,277,260 1,870,758 2,040, ,382 3,348,454 7,322, ,130,741 2,160,428 2,163, ,731 3,826,384 8,182, ,778,639 2,111,301 2,179, ,967 4,445,580 9,197, ,998,951 2,462,680 2,272, ,266 5,014,413 10,335, ,085,057 2,224,421 2,151, ,933 5,299,090 9,716, ,344,535 1,853,708 1,816, ,491 3,956,378 7,595, Source: Sarasota County Property Appraiser Note: Property is assessed at market value. The Save Our Homes Amendment caps homesteaded property ar a maximum increase in the taxable value to 3% per year. Tax rates are per $1,000 of assessed value. 186

203 Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) City of Sarasota Overlapping Rates a Fiscal Year School Board Total Direct & Ended Operating Debt Service Total Sarasota of Sarasota Overlapping September 30, Millage Millage City Millage County County Rates a Overlapping rates are those of county governments that apply to property owners within the City of Sarasota. 187

204 Principal Property Taxpayers Current Year and Nine Years Ago Fiscal Year Fiscal Year Taxpayer Taxable Assessed Value Rank Percentage of Total City Taxable Assessed Value Taxable Assessed Value Rank Percentage of Total City Taxable Assessed Value Florida Power & Light $ 45,973, % $ 45,659, % Southgate Mall Owner LLC 41,618, % 59,649, % Plymouth Harbor Inc. 38,986, % 29,664, % SLABB LLC 33,504, % 92,504, % Hotel Assoc. of Sarasota LTD 33,269, % Logan Acquisitions Corp/Lido Beach LLC 32,723, % Health Care Reit Inc. 26,214, % Quay Venture LLC 22,504, % Lido Sand LLC 22,419, % Echo Paradise LLC 22,066, % Verizon Florida Inc. 64,141, % Calpac Inc. 37,966, % Irish American Management Services 46,115, % Osprey SA 33,561, % Ronald L Spector 28,538, % Sarasota Main Real Estate LLC 28,278, % $ 319,280, % $ 466,080, % Source: Sarasota County Property Appraiser 188

205 Property Tax Levies and Collections Last Ten Fiscal Years Collections within the Fiscal year Ended Taxes Levied for the Fiscal Year of the Levy Percentage Collections in Subsequent Total Collections to Date Percentage September 30, Fiscal Year Amount of Levy Years Amount of Levy 2015 $ 27,014,101 $ 26,127, % $ 24,952 $ 26,152, % ,764,313 24,871, % 25,808 24,897, % ,047,938 22,202, % 58,349 22,261, % ,956,071 21,970, % 70,416 22,041, % ,418,667 22,614, % 70,895 22,685, % ,793,124 24,894, % 21,173 24,915, % ,568,076 27,657, % 37,239 27,694, % ,724,339 31,537, % 14,088 31,552, % ,144,461 28,129, % 16,856 28,146, % ,852,050 22,010, % 25,934 22,036, % Source: City of Sarasota Finance Department 189

206 Base Water and Sewer Rates Monthly Rates for 4,000 Gallons per Month Last Ten Fiscal Years Fiscal year ended September 30, Water Rate Sewer Rate Total 2015 $ $ $ Previously reported Monthly Rates for 5,000 gallons per month. Industry standards have changed to 4,000 gallons per month. Revised previous years for consistency. Source: City of Sarasota Finance Department Note: Rates are based on 5/8" meter, which is the standard household meter size. 190

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208 Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Fiscal Year General Special Ended Obligation Obligation Loans September 30, Bonds Bonds Payable 2015 $ 41,430,667 $ 24,791,622 $ 940, ,876,336 28,479,704 1,957, ,016,480 31,826,378 2,930, ,111,021 34,859,613 4,079, ,165,173 37,613,745 5,185, ,629,138 31,618,419 6,847, ,636,760 32,927,988 10,591, ,618,799 13,405,017 12,680, ,638,429 14,764,079 14,706, ,235,000 16,299,204 16,668,770 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. a Personal income and population data can be found on page

209 Business-Type Activities Water and Total Percentage Sewer Loans Primary of Personal Per Bonds Payable Government Income a Capita a $ 55,344,553 $ - $ 122,507, % $ 2,316 59,296, ,609, % 2,484 62,813, ,586, % 2,649 66,355, , ,629, % 2,830 71,874, , ,280, % 3,056 77,146, , ,894, % 3,100 55,425, , ,440, % 2,830 38,782,256 1,060, ,547, % 2,130 44,394,276 1,255, ,759, % 2,206 49,800,031 1,446,298 86,449, % 1,

210 Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Fiscal year Ended September 30, General Obligation Bonds Less: Amounts Available in Debt Service Fund Total Percentage of Actual Taxable Value of Property a Per Capita b 2015 $ 41,430,667 $ 638,162 $ 40,792, % $ ,876, ,869 39,936, % ,016, ,944 41,094, % ,111, ,502 42,190, % ,165, ,651 43,245, % ,629, ,140 46,790, % ,636, ,896 50,060, % ,618, ,364 50,981, % ,638, ,336 47,288, % ,235, ,708 1,550, % Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. a b See page 174 for property value data. Population data can be found on page

211 Direct and Overlapping Governmental Activities Debt General Obligation Bonds As of September 30, 2015 Governmental Unit Debt Outstanding Estimated Percent Applicable Estimated Share of Overlapping Debt Overlapping debt: Sarasota County Board of County Commissioners $ % a $ -- City direct debt: General obligation bonds 41,430,667 b % 41,430,667 Special obligations bonds 24,791,622 b % 24,791,622 Loans payable 940,427 b % 940,427 Subtotal 67,162,716 67,162,716 Total direct and overlapping debt $ 67,162,716 a Source: The percentage of overlapping debt applicable is estimated using taxable assessed property values. Taxable assessed property values were provided by the Sarasota County Property Appraiser. b Source: City of Sarasota Financial Administration Department 195

212 Legal Debt Margin Information Last Ten Fiscal Years Fiscal year Ended September 30, Debt Limit Total Net Debt Applicable to Limit Legal Debt Margin Total Net Debt Applicable to the Limit as a Percentage of Debt Limit 2015 $ 759,547,813 $ 40,792,505 $ 718,755, % ,332,000 39,936, ,395, % ,485,100 41,094, ,390, % ,295,800 42,190, ,105, % ,222,339 43,245, ,976, % ,231,900 46,790, ,440, % ,711,400 50,060, ,650, % ,033,552,480 50,981, ,571, % ,611,567 47,288, ,323, % ,532,366 1,550, ,982, % Legal Debt Margin Calculation for Fiscal Year 2015 Taxable assessed value $ 7,595,478,127 Debt limit (10% of assessed value) 759,547,813 Debt applicable to limit: General obligation bonds 41,430,667 Less amount set aside for repayment of general obligation bonds (638,162) Total net debt applicable to limit 40,792,505 Legal debt margin $ 718,755,308 Note: State Statute limits the City's outstanding general obligation debt to 10 percent of the total assessed property value. 196

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214 Pledged-Revenues Coverage Last Ten Fiscal Years (dollars in thousands) Water & Sewer Revenue Bonds Fiscal Year Utility Less: Net Ended Service Operating Available Debt Service September 30, Charges Expenses Revenue Principal Interest Coverage 2015 $ 42,844 $ 22,822 $ 20,022 $ 3,765 $ 2, ,643 23,198 16,445 3,250 2, ,497 20,671 16,826 3,245 2, ,864 20,919 15,945 5,195 3, ,658 20,501 14,157 4,976 3, ,214 20,477 11,737 7,582 2, ,901 21,058 9,843 5,805 1, ,135 21,149 11,986 5,535 1, ,112 20,398 13,714 5,305 2, ,938 19,263 9,675 4,800 2, Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest and depreciation expense. a The 1992 Special Obligation Bonds and a portion of the 2009 Special Obligation Bonds are backed by the Tax Increment Financing (TIF) revenue from the City of Sarasota and from Sarasota County. b The Infrastructure Sales Tax Bonds and a portion of the 2009 Special Obligation Bonds are backed by the One Cent Local Option Sales Tax. The final principal and interest due on the Infrastructure Sales Tax Bonds was September 1, c The 2010 Sales Tax Payment Revenue Bonds are backed by a pledge of Sales Tax payments for the certification for the major league baseball spring training facility, pursuant to Section (6)(d)7.b, Florida Statutes. 198

215 2009 Special Obligation Bonds/ 1992 Special Obligation Bonds a 2009 Special Obligation Bonds/ Infrastructure Sales Tax Bonds b / 2010 Sales Tax Payment Revenue Bonds c TIF Debt Service Sales Tax Debt Service Revenues Principal Interest Coverage Revenues Principal Interest Coverage $ 7,791 $ 1,335 $ 1, $ 7,306 $ 1,035 $ 1, ,267 1,289 1, , , ,674 1,244 1, , , ,809 1,202 1, , , ,602 1,161 1, , , , , , , , , , , ,266 1, ,270 1, ,492 1,

216 Demographic and Economic Statistics Last Ten Fiscal Years Fiscal year Ended September 30, Population a Personal Income b Per Capita Personal Income c Unemployment Rate ,905 $ 2,864,647,035 $ 54, % d ,584 2,979,462,024 56, % d ,689 2,920,129,758 55, % c ,517 2,874,623,029 54, % c ,114 2,802,117,666 53, % c ,917 2,687,223,920 51, % c ,160 2,663,316,000 50, % c ,174 3,154,794,146 57, % c ,644 3,127,749,240 56, % c ,364 2,894,438,656 54, % c a b c d Source: US Census Bureau Source: Calculated (Population x Per Capita Personal Income) Source: U.S. Dept of Commerce, Bureau of Economic Analysis for Sarasota County Source: Florida Department of Economic Opportunity for City of Sarasota 200

217 Principal Employers in Sarasota County Current Year and Nine Years Ago Employer Employees Rank Percentage of Total County Employment Employees Rank Percentage of Total County Employment School Board of Sarasota County 5, % 5, % Sarasota County Government 3, % 3, % Sarasota Memorial Hospital 3, % 4, % PGT Industries 1, % 2, % Publix Super Markets 1, % 3, % Venice Regional Med Ctr 1, % 1, % FCCI Insurance Group % Sun Hydraulics Corporation % % Goodwill Industries % Sunset Automotive Group % Wal-Mart , % CEMEX, Inc , % Nielsen Media Research % Total 19, % 23, % Total Sarasota County Employment 168,673 * 180,855 * Source: Florida Agency for Workforce Innovation, Labor Market Statistics 201

218 City of Sarasota, Florida Full-time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Fiscal Years Function/Program General Government City Manager's Office Neighborhood Partnership Office Facilities Management Neighborhood & Development Services General Services Human Resources Finance Accounting City Auditor and Clerk Planning and Redevelopment Urban and Design Studio Commission Support Office Officer of Public Information Public Safety Police - uniform Police - general employees Homelessness Resonse Code Compliance COPS Sworn Officers Physical Environment Parks & Landscape Maintenance Transportation Streets & Highways Engineering/Construction Services Street Sweeping Culture and Recreation Skateboard Park Children's Fountain Special Events/Volunteer Office Sustainability Robert L. Taylor Community Center Economic Environment Housing & Community Development Building Services Enterprise funds Water Sewer Parking Management Bobby Jones Golf Course Ed Smith Sports Stadium Solid Waste Management Municipal Auditoriums Van Wezel Performing Arts Hall Internal Service funds Information Technology Duplicating Services Central Stores Public Works Equipment Maintenance Total Source: City of Sarasota Finance Department 202

219 Fiscal Years

220 Operating Indicators by Function/Program Last Ten Fiscal Years Fiscal Years Function/Program Police Physical arrests 3,530 3,993 4,952 5,092 Parking violations 19,032 20,741 15,565 13,364 Traffic violations 10,771 15,034 13,583 11,817 Streets and highways Streets resurfaced (miles) Potholes repaired Water New connections Water mains breaks Average daily consumption (thousands of gallons) 6,258 6,630 6,259 6,451 Peak daily consumption (thousands of gallons) 8,009 8,062 7,514 7,862 Wastewater Average daily sewage treatment (thousands of gallon 5,777 6,154 6,741 5,660 Solid waste collection Solid waste collected (tons per day) Recyclables collected (tons per day) (1) Source: City of Sarasota Finance Department Notes: Operating indicators are not available for the general government function. (1) Starting in FY , this number is based on residential only. In prior years commercial was included, however, s control all of the commercial accounts, these accounts should not be included as an indicator. 204

221 Fiscal Years ,669 5,648 8,625 12,130 12,266 10,983 13,028 16,346 20,585 24,857 22,319 23,239 11,880 11,084 13,717 16,692 24,264 21, ,439 6,324 6,522 6,921 7,652 7,505 7,310 7,134 7,478 8,118 9,859 9,122 6,500 6,200 5,800 5,597 5,200 7, since we do not 205

222 Capital Assets Statistics by Function/Program Last Ten Fiscal Years Fiscal Years Function/Program Police Stations Sub-stations Patrol units Streets and highways Streets (miles) Unpaved streets (miles) Highways (miles) Streetlights 7,745 7,275 7,213 7,213 Traffic signals Water Water mains (miles) Storage capacity (thousands of gallons) 10,200 7,000 7,000 7,000 Fire hydrants ,388 1,388 1,388 Wastewater Sanitary sewers (miles) Treatment capacity (thousands) 10,200 10,200 10,200 10,200 Storm sewers (miles) Solid waste collection Collection trucks Source: City of Sarasota Finance Department Note: No capital assets indicators are available for the general government function. 206

223 Fiscal Years ,213 7,213 7,213 7,481 7,476 7, ,000 7,000 7,000 7,000 7,000 7,000 1,388 1,388 1,388 1,373 1,247 1, ,200 10,200 10,200 10,200 10,200 10,

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225 INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Sarasota, Florida (the City), as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the basic financial statements, and have issued our report thereon dated March 15, Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to 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. Accordingly, we do not express an opinion on the effectiveness of the City s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 209

226 The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Concluded) Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results 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 City s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. March 15, 2016 Sarasota, Florida 210

227 INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 AND CHAPTER , RULES OF THE AUDITOR GENERAL The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida Report on Compliance for Each Major Federal Program/State Project We have audited the City of Sarasota, Florida (the City) s compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133, Compliance Supplement, and the requirements described in the Florida Department of Financial Services State Projects Compliance Supplement, that could have a direct and material effect on each of the City s major federal programs and state projects for the year ended September 30, The City's major federal programs and state projects are identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs and state projects. Auditors Responsibility Our responsibility is to express an opinion on compliance for each of the City s major federal programs and state projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter , Rules of the Auditor General. Those standards, rules, and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 211

228 The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 AND CHAPTER , RULES OF THE AUDITOR GENERAL (Continued) Auditors Responsibility (Concluded) We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program and state project. However, our audit does not provide a legal determination of the City's compliance. Opinion on Each Major Federal Program and State Project In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, Report on Internal Control over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program or state project to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and state project and to test and report on internal control over compliance in accordance with OMB Circular A-133 and Chapter , Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program or state project that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 212

229 The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 AND CHAPTER , RULES OF THE AUDITOR GENERAL (Concluded) The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133 and Chapter , Rules of the Auditor General. Accordingly, this report is not suitable for any other purpose. March 15, 2016 Sarasota, Florida 213

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231 Schedule of Findings and Questioned Costs For the Year Ended September 30, 2015 Part I - Summary of Auditor's Results Basic Financial Statements Section Type of auditor's report issued: Unqualified Opinions Internal control over financial reporting: Material weakness(es) identified? yes x no Significant deficiencies identified not considered to be material weaknesses? yes x no Noncompliance material to basic financial statements noted? yes x no Federal Awards Section Dollar threshold used to determine Type A programs: $300,000 Auditee qualified as low-risk auditee? x yes no Type of auditor s report on compliance for major programs: Unqualified Opinion Internal Control over compliance: Material weakness(es) identified? yes x no Were significant deficiencies identified not considered to be material weakness(es)? yes x no Any audit findings disclosed that are required to be reported in accordance with Circular A-133 (Section.510(a))? yes x no Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster Department of Housing and Urban Development Home Investment Partnerships Program Federal Highway Administration Passed through Florida Dept. of Transportation - Osprey Avenue Corridor ATMS - Bike Path/Trail Alderman Street, 215

232 Schedule of Findings and Questioned Costs (continued) For the Year Ended September 30, 2015 Part I - Summary of Auditor's Results (continued) State Awards Section Dollar threshold used to determine Type A projects: $300,000 Type of auditor s report on compliance for major projects: Unqualified Opinion Internal Control over compliance: Material weakness(es) identified? yes x no Were significant deficiencies identified not considered to be material weakness(es)? yes x no Any audit findings disclosed that are required to be reported in accordance with Rule , rules of the Auditor General of the State of Florida? yes x no Identification of major projects: CSFA Number(s) Name of State Project Florida Department of Community Affairs State Housing Initiative Partnership Florida Department of Transportation US 301 Landscape Improvements Part II - Schedule of Basic Financial Statements Findings This section identifies the reportable conditions, material weaknesses, and instances of noncompliance related to the basic financial statements that are required to be reported in accordance with Government Auditing Standards. No significant deficiencies, material weaknesses and instances of noncompliance, including questioned costs, related to the basic financial statements were noted. Part III - Schedule of Federal Award and State Financial Assistance Findings and Questioned Costs This section identifies significant deficiencies, material weaknesses, and instances of noncompliance, including known fraud and questioned costs, related to the audit of federal programs and state projects, as required to be reported by Circular A-133, Section.510(a) and Chapter 69 I-5, Rules of the Florida Department of Financial Services. No significant deficiencies, material weaknesses, and instances of noncompliance, including known fraud and questioned costs, related to the audit of federal programs and state projects were identified. Part IV - Other Issues No summary schedule of prior audit findings is required because there were no findings in the prior year Federal or state single audits. No corrective plan is required because there were no findings in the current year requiring correction under the Federal or Florida Single Audit Acts. 216

233 Schedule of Expenditures of Federal Awards and State Financial Assistance For the Year Ended September 30, 2015 Federal/State Agency CFDA/CSFA Contract/Grant Program Federal Program/State Project Number Number Expenditures Total FEDERAL AWARDS Department of Housing and Urban Development Direct Programs: Entitlement Grants Cluster Community Development Block Grant B-13-MC $ 204,120 Neighborhood Stabilization Program B-11-MN ,438 $ 220,558 ARRA - Neighborhood Stabilization Program B-09-CN-FL ,494 HOME Investment Partnerships Program M-10-DC ,071 HOME Investment Partnerships Program M-11-DC ,881 HOME Investment Partnerships Program M-12-DC ,264 1,034,216 Total Dept. of Housing and Urban Development 1,866,268 Department of Justice Direct Programs: Federal Equitable Sharing Agreement 16.XXX Not Applicable 112,220 Edward Byrne Memorial JAG Program DJ-BX Edward Byrne Memorial JAG Program DJ-BX Edward Byrne Memorial JAG Program DX-BX ,602 37,413 COPS Hiring Grant UM-WX ,016 Bulletproof Vest Partnership BU-BX ,664 Passed through the Florida Attorney General Victims of Crime Act V ,141 Total Department of Justice 271,454 Department of Transportation Federal Highway Administration Passed through Florida Dept. of Transportation: Osprey Avenue Corridor ATMS / Bike Path/Trail - Alderman Street / , Total Department of Transportation 19,145 Department of Homeland Security Federal Emergency Management Agency Passed through Florida Dept. of Community Affairs: Public Assistance Program FEMA-4068-DR-FL Tropical Storm Debby DB ,178,372 Total Expenditures of Federal Awards $ 4,335,239 STATE FINANCIAL ASSISTANCE Florida Department of Environmental Protection Florida Beach Erosion Control Program ST1 $ 514,018 Florida Department of Community Affairs Florida Housing Finance Agency State Housing Initiative Partnership Not Applicable 1,491,543 Florida Department of State General Program Support ,000 Florida Department of Revenue Retained Spring Training Facility Not Applicable 500,004 Total Expenditures of State Financial Assistance $ 2,655,565 The accompanying notes are an integral part of this statement. 217

234 Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance September 30, Summary of Significant Accounting Policies: The accounting policies and presentation of the Single Audit Report of the City of Sarasota, Florida have been designed to conform to generally accepted accounting principles as applicable to governmental units, including the reporting and compliance requirements of the Audits of States, Local Governments, and Non-Profit Organizations and Office of Management and Budget Circular A- 133, Compliance Supplement (A-133) and Chapter 69 I-5, Rules of the Florida Department of Financial Services, Florida Administrative Code. A. Reporting Entity - The Audits of States, Local Governments, and Non-Profit Organizations and A-133 set forth the audit and reporting requirements for federal awards, Chapter 69 I-5 sets forth the requirements for state financial assistance. The City of Sarasota included schedules of both federal and state financial assistance in the Single Audit section. Financial assistance received directly from the State of Florida is included to satisfy the audit requirements of the State of Florida grantor agencies. B. Basis of Accounting - Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The modified accrual basis of accounting is followed in the Schedule of Expenditures of Federal Awards and State Financial Assistance. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the related liability is incurred. In applying the susceptible-toaccrual concept to intergovernmental revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. In some financial assistance programs where monies must be expended on the specific purpose or project before any amounts will be paid to the City of Sarasota, revenues are recognized based upon the expenditures recorded. 2. Contingencies: Grant monies received and disbursed by the City of Sarasota are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon prior experience, the City of Sarasota does not believe that such disallowances, if any, would have a material effect on the financial position of the City. As of March 6, 2015, there were no material questioned or disallowed costs as a result of grant audits in process or completed. 218

235 INDEPENDENT ACCOUNTANTS REPORT ON COMPLIANCE WITH SECTION , FLORIDA STATUTES The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida Report on Compliance We have examined the City of Sarasota, Florida (the City) s compliance with the requirements of Section , Florida Statutes, as of and for the year ended September 30, 2015, 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, included 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 specified 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 Florida House of Representatives, the Florida Auditor General, the Honorable Mayor and Members of the City Commission, and applicable management, and is not intended to be, and should not be, used by anyone other than these specified parties. March 15, 2016 Sarasota, Florida 219