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FY2007 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Financial Statements For the Year Ended September 30, 2007 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Table of Contents Page Independent Auditors' Report_____________ _ - Management's Discussion and Analysis_____________ BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Assets ---------------•---......._.----------•---•------•------........------...........------•-----.......... 8 Statement of Activities 9 Fund Financial Statements Balance Sheet -General Fund 10 Statement of Revenues, Expenditures and Changes in Fund Balance - General Fund .....................•-......•••-- .................................................... 11 Notes to Financial Statements 12- 18 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund {Budgetary Basis)-.............................. 19 SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS 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 20 -21 Independent Auditors' Management Letter 22 - 23 F loom WRF,1JkN,I!J7 CERTIFIED PU111.11 INDEPENDENT AUDITORS' REPORT To the Governing Board Monroe County Comprehensive Plan Land Authority Monroe County, Florida: We have audited the accompanying financial statements of the governmental activities and the major fund of Monroe County Comprehensive Plan Land Authority (the "Authority") a component unit of Monroe County, Florida, as of and for the year ended September 30, 2007, which collectively comprise the Authority's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Authority's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and the major fund of the Authority as of September 30, 2007, and the respective changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated January 8, 2008 on our consideration of the Authority's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of the testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 2 The management's discussion and analysis and required supplementary information listed in the foregoing table of contents are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Orlando, Florida January 8, 2008 3 MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the Monroe County Comprehensive Plan Land Authority (the "Authority") we offer readers of the Authority's financial statements this narrative overview and analysis of the Authority's financial activities for the fiscal year ended September 30, 2007. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Authority's basic financial statements. The Authority's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the Authority's finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the Authority's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Also, capital assets are capitalized and depreciated on the statement of net assets whereas related purchases are expensed on government fund financial statements. General Fund. The General Fund is used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, the General Fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of the General Fund is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the General Fund with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near- term financing decisions. Both the General Fund balance sheet and the General Fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between General Fund and governmental activities. The Authority adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget. 4 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 are an integral part of the basic financial statements. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents supplementary information in the form of independent opinions on internal control and compliance issues. Government-wide Financial Analysis The Authority's assets consist of cash and cash equivalents, mortgage receivables issued for affordable housing, amounts due from other governments primarily for tourist impact tax and park surcharge fees, and capital assets in the form of acquired land. A comparison of net assets of all types as of September 30, 2007 and 2006 is provided below. 2007 2006 Current and other assets $ 16,145,041 $ 16,701,779 Capital assets 16,368,527 15,419,967 Total assets 32,513,568 32,121,746 Current liabilities 28,007 24,584 Noncurrent liabilities 43,116 37,769 Total liabilities 71,123 62,353 Net assets: Invested in capital assets, net of related debt 16,368,527 15,419,967 Restricted 2,380,461 2,791,423 Unrestricted 13,693,457 13,848,003 Total net assets $ 32,442,445 $ 32,059,393 Cash and cash equivalents are the assets typically of most importance to the Authority's Board of Directors and to the public, as these assets are the resources most readily available to meet current and future needs for property acquisition and mortgage financings. At the close of the most recent fiscal year, the Authority had cash and cash equivalents of $9,092,595 as shown on the Statement of Net Assets on page 8. This compares with $9,683,180 at the end of the previous fiscal year, a decrease of $590,585. This decrease was due to cash expenditures and capital outlay for land of $3,725,470 in the current year exceeding cash revenues. Of the $9,092,595 shown as cash and cash equivalents, $2,380,461 is restricted for the acquisition of property within the Key West Area of Critical State Concern. 5 Governmental Activities As shown in the table below, the Authority's revenues for fiscal year 2007 totaled $3,443,623 and consisted of $2,914,835 in tourist impact tax and park surcharge fees, $528,032 in investment income, and $756 in miscellaneous revenue. Revenues decreased by $1,015,408 compared to last year, primarily because last year's revenues included $1,135,742 in proceeds from a sale of conservation land to the State of Florida. The Authority's expenses for fiscal year 2007 totaled $3,060,571 and consisted of $2,776,910 of land contribution conveyances and $283,661 of general government expenses. The land contribution conveyances consisted of $1,612,422 of improved property donated to Bahama Conch Community Land Trust of Key West, Inc. for affordable housing, $1,082,222 of land donated to the Board of County Commissioners for affordable housing, and $82,266 of land donated to the Board of County Commissioners..as a park site. Expenses for fiscal year 2007 decreased by $2,651,147 compared to the por year primarily because of reduced land contribution conveyances and because there was no reduction in the land inventory associated with a property sale. These government activities had the combined effect of increasing the Authority's net assets by $383,052. 2007 2006 Revenues: Intergovernmental $ 2,914,835 $ 2,716,861 Interest 528,032 398,246 Miscellaneous revenue 756 Property sale - 1,135,742 Land contributions - 208,182 Total revenues 3,443,623 4,459,031 Expenses: Land contribution conveyances 2,776,910 4,273,928 Cost of land sale 1,189,271 General government 283,661 248,519 Total expenses 3,060,571 5,711,718 Increase (decrease) in net assets $ 383,052 $ 1,252,687 Financial Analysis of the General Fund: As noted earlier, the Authority uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The purpose of the Authority's General Fund is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Authority's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. 6 The difference between the fund balance of the General Fund and government-wide net assets is that government-wide net assets include capital assets (land), whereas capital assets are expensed when purchased in the General Fund and noncurrent liabilities (compensated absences) are only recognized when due in the General Fund. The Authority's land presented on the government-wide statement of net assets was $16,368,527 and compensated absences were $58,152 at September 30, 2007. Accordingly, government-wide net assets were $32,442,445 whereas the fund balance of the General Fund was $16,132,070 at September 30, 2007. Because of this difference in presenting land, land purchases are presented as expenditures only on the General Fund Statement of Revenues, Expenditures and Changes in Fund Balance and land donations to other entities (land contribution conveyances) are accounted for as expenses only on the government-wide statement of activities. A reconciliation of the change in fund balance of the General Fund to the change in net assets of government activities is presented on page 10. General Fund Budgetary Highlights The Authority budgets its revenues and expenditures on the same basis of accounting as presented in the basic financial statements of the General Fund, except that mortgage assistance cash outlays and receipts are budgeted as operating activities and compensated absences are not budgeted in personnel expenditures. There were no supplemental appropriations to amounts originally budgeted for fiscal 2007. As shown in the required supplementary information on page 19, variances between final budgeted and actual operating categories included actual revenues $953,623 more than budget and actual expenditures $6,232,921 less than budget. These variances were generally due to the conservative nature of the Authority's budget. Most of the revenue surplus consists of tourist impact tax revenue and interest income, which were enhanced by the quiet 2006 hurricane season and rising interest rates. Most of the positive expenditure variance is due to pending real estate closings and budgeted reserves held for specific acquisition projects. Capital Asset Administration As shown on Note 4 on page 15, the Authority's investment in capital assets as of September 30, 2007 amounts to $16,368,527, an increase of$948,560 from $15,419,967 at September 30, 2006. The increase was the net effect of land contribution conveyances of$2,776,910 and land acquisitions of$3,725,470. Requests for Information This financial report is designed to provide a general overview of the Authority's finances for all those with an interest in the government's finances. Questions concerning any of the information should be addressed to Mark Rosch, Executive Director, at 1200 Truman Avenue, Suite 207, Key West, FL 33040. 7 BASIC FINANCIAL STATEMENTS MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY Statement of Net Assets September 30, 2007 Assets Cash and cash equivalents $ 9,092,595 Due from other governmental units 311,867 Mortgages receivable 6,740,579 Capital assets-land 16,368,527 Total assets 32,513,568 Liabilities and Net Assets Current liabilities Accounts payable 1,949 Accrued wages 11,022 Compensated absences 15,036 Total current liabilities 28,007 Noncurrent liabilities Compensated absences 43,116 Total noncurrent liabilities 43,116 Total liabilities 71,123 Net assets Invested in capital assets 16,368,527 Restricted 2,380,461 Unrestricted 13,693,457 Total net assets $ 32 442.445 The notes to the financial statements g are an integral part of this statement. MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY Statement of Activities Year Ended September 30, 2007 General revenues Intergovernmental $ 2,914,835 Investment income 528,032 Miscellaneous income 756 Total general revenues 3,443,623 Program expenses Land contribution conveyances 2,776,910 General government 283,661 Total program expenses 3,060,571 Increase in net assets 383,052 Net assets - beginning of year 32,059,393 Net assets -end of year $ 32,442,445 The notes to the financial statements are an integral part of this statement. 9 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY Balance Sheet General Fund September 30, 2007 Assets Cash and cash equivalents $ 9,092,595 Due from other governmental units 311,867 Mortgages receivable 6,740,579 $ 16,145,041 Liabilities and Fund Equity Liabilities Accounts payable $ 1,949 Accrued wages 11,022 Total liabilities 12,971 Fund equity Reserved for mortgage loans 6,740,579 Reserved for land acquisition 2,380,461 Fund balance- unreserved 7,011,030 Total fund equity 16,132,070 Total liabilities and fund equity $ 16,145,041 Amounts reported in the statement of net assets differ from amounts reported above as follows: Fund balance -total governmental funds $ 16,132,070 Capital assets used in governmental activities are not financial resources and therefore are not reported above. 16,368,527 Compensated absences are not due and payable in the current period and, therefore, are not reported in the governmental funds. (58,152) Net assets of governmental activities $ 32,442,445 The notes to the financial statements are an integral part of this statement. 10 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY Statement of Revenues, Expenditures and Changes in Fund Balance General Fund Year Ended September 30, 2007 Revenues Intergovernmental $ 2,914,835 Miscellaneous income 756 Investment income 528,032 Total revenues 3,443,623 Expenditures Current Personnel 210,765 Operating 66,624 Capital outlay 3,725,470 Total expenditures 4,002,859 Excess of expenditures over revenues (559,236) Fund balance, beginning of year 16,691,306 Fund balance, end of year $ 16,132,070 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances-total governmental fund $ (559,236) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is capitalized. 3,725,470 Land contribution conveyances are not reported on govemment funds; this is the amount of land conveyances during fiscal 2007. (2,776,910) Compensated absences do not use current financial resources and are not reported on the Governmental Funds but are included in the Statement of Activities. _ (6,272) Change in net assets of governmental activities $ 383,052 The notes to the financial statements are an integral part of this statement. 11 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Notes to Financial Statements Year Ended September 30, 2007 Note 1 -Summary of significant accounting policies Reporting Entity -- The Monroe County, Florida Comprehensive Plan Land Authority (the "Authority") is a legally separate entity from Monroe County, Florida (the "County"). However, the Monroe County Board of County Commissioners serves as the governing board of the Authority and is able to impose its will. Therefore, the Authority, for financial reporting purposes, is considered a blended component unit of the County. The financial statements of the Authority are included as a special revenue fund in the Monroe County, Florida Comprehensive Annual Financial Report. The Authority was established under Monroe County, Florida Ordinance 031-1986 pursuant to Florida Statute 380. Its purpose is to operate a land acquisition program in the County, to implement the Monroe County Comprehensive Plan and address issues created by it. Basis of Accounting — Government fund financial statements are organized for reporting purposes on the basis of a General Fund, the Authority's major fund, which accounts for all activities of the Authority and is accounted for using the modified accrual basis of accounting. Revenues are recognized when they become measurable and available as net current assets. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The Authority considers all revenues available if collected within 60 days after year-end. Expenditures are recognized when the related fund liability is incurred. The government-wide 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. Capital Assets—Capital assets are defined by the Authority as assets with an initial, individual cost of $1,000 or more and an estimated useful life in excess of two years. Such assets consist of land and, when purchased, are recorded at the Authority's cost. Where land is acquired by donation, the asset is recorded at the Authority's transaction cost plus the higher of the tax assessed value at the time of donation or 115% of the 1986 tax assessed value. Capital assets are not depreciated since they do not have determinable useful lives. Cash and Cash Equivalents and Investments — The Authority's cash and cash equivalents consist of demand deposits and highly liquid investments with maturities of 90 days or less when purchased. All investments are reported at fair value. 12 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Notes to Financial Statements Year Ended September 30, 2007 Note 'I —Summary of significant accounting policies (continued) Budget — Prior to, or on September 30, the Authority's budget is legally enacted through passage of a resolution. There were no supplemental appropriations during the year. Budgeted to Actual Expenditure reports are employed as a management control device during the year for the fund. The budget is adopted on a basis consistent with accounting principles generally accepted in the United States of America, except that mortgage assistance cash outlays and receipts are budgeted as operating activities and compensation accruals are not budgeted. For the fiscal year 2007, the following adjustments were necessary to present the actual data on a budgetary basis for the General Fund: GAAP basis $ (559,236) Compensation accrual 11,022 Mortgage proceeds 13,984 Non-GAAP budgetary basis $ (534,230) All appropriations lapse at year-end- Compensated Absences — The Authority's policy grants employees annual leave and sick leave in varying amounts. Upon termination of employment, employees with six months or more of credited service can receive payment for accumulated annual leave. In general, sick leave payments are granted upon termination of employment to employees with five years or more of credited service. The maximum payment is subject to percentage and maximum hour limitations. Use of Estimates - The preparation of the financial statements requires management to make use of estimates that affect reported amounts. Actual results could differ from those estimates. Note 2— Deposits and investments As of September 30, 2007, the Authority has the following deposits and investments: Demand deposits $ 436,798 Local Government Surplus Trust Fund 8,655,797 Total cash and cash equivalents $ 9,092,595 Cash accounts are maintained in demand deposits, which are insured by the Federal Deposit Insurance Corporation up to $100,000 at each institution or covered by the State of Florida collateral pool, a multiple financial institution pool with the ability to assess its members for collateral shortfalls if a member institution fails. 13 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Notes to Financial Statements Year Ended September 30, 2007 Note 2—Deposits and investments (continued) The Authority's investment policy is in accordance with Florida Statute 218.415. This policy authorizes investments in demand deposits, the Local Government Surplus Trust Fund, money market funds with the highest credit quality rating from a nationally recognized agency, or direct obligations of the United States Treasury. The Local Government Surplus Trust Fund does not have a credit quality rating. Note 3— Mortgages receivable Mortgages receivable as of September 30, 2007 are as follows: First mortgage due from governmental agency, collateralized by land, payable in full April 2028, interest free (OR 1514-594) $ 382,554 First mortgage due from governmental agency, collateralized by land, payable in full May 2031, interest free (OR 1697-2076) 1,500,000 Second mortgage due from governmental agency, collateralized by land, payable in full January 2034, interest free (OR 1965-1039) 2,210,000 First mortgage due from governmental agency, collateralized by land and building, payable in full September 2045, interest free (OR 1395- 1409) 59,025 Third mortgage due from private company, collateralized by land, payable in full May 2050, interest free (OR 1749-2340) 1,089,000 Third mortgage due from private company, collateralized by land, payable in full September 2053, interest free (OR 1939-405) 1,500,000 Total mortgages receivable $ 6,740,579 The mortgages receivable are equally offset by a fund balance reserve which indicates that they do not constitute "available spendable resources," even though they are a component of total assets. 14 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Notes to Financial Statements Year Ended September 30, 2007 Note 4—Capital assets A summary of changes in capital assets is as follows: Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Land $ 15,419,967 $ 3,725,470 $ 2,776,910 $ 16,368,527 The City of Key West leases two properties with a cost of $441,073 from the Authority. These properties, which are included in capital assets, are used to provide parking and city recreational facilities. The terms of the leases provide for rental of $1 per year for 30 years, expiring in the year 2022. Monroe County provides the Authority's office space at no cost. Note 5—Accumulated compensated absences The amount of vested accumulated compensated absences payable based on the Authority's annual and sick leave policies, is reported as a liability in the government-wide financial statements. That liability includes earned but unused vacation and sick leave. Vacation leave is accrued based on length of employment. Sick time is paid out based on length of employment up to a maximum of one half of 120 days with 15 or more years of service. The change in accumulated compensated absences during the year is as follows: Balance Balance Current 10/112006 Additions Deletions 9/30/2007 Portion Compensated absences $ 51,880 $ 21,308 $ 15,036 $ 58,152 $ 15,036 15 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Notes to Financial Statements Year Ended September 30, 2007 Note 6— Retirement system Plan description -- The Authority's employees participate in the Florida Retirement System ("FRS"), administered by the Florida Department of Administration. Employees elect participation in either the defined benefit plan ("Pension Plan"), a multiple-employer cost- sharing defined benefit retirement plan, or the defined contribution plan ("Investment Plan") under the FRS. As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature. Benefits are computed on the basis of age, average final compensation, and service credit. Regular class employees who retire at or after age 62 with 6 years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation for each year of credited service. Vested employees with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special risk class employees (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with 6 years of credited service, or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 3% of their final average compensation for each year of credited service. Senior Management Service class employees who retire at or after age 62 with at least 6 years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation for each year of credited service. Elected Officers' class employees who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their final average compensation for each year of credited service. A post-employment health insurance subsidy is also provided to eligible retired employees through the FRS in accordance with Florida Statutes. In addition to the above benefits, the FRS administers a Deferred Retirement Option Program ("DROP"). This program allows eligible employees to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. For those employees who elect participation in the Investment Plan rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution for self- direction in an investment product with a third party administrator selected by the State Board of Administration. 16 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Notes to Financial Statements Year Ended September 30, 2007 Note 6— Retirement system (continued) The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, 2639 North Monroe Street, Building C, Tallahassee, Florida 32299-1560 or accessing their internet site at www.frs.state.fl.us. Funding policy — The FRS is noncontributory for members. Governmental employers are required to make contributions to the FRS based on statewide contribution rates. The contribution rates by job class at September 30, 2007 were as follows: regular 9.85%; special risk 20.92%; special risk administrative support 12.55%; county elected officers 16.53%; senior management 13.12%, and DROP participants 10.91%. During the fiscal year ended September 30, 2007, the Authority contributed to the plan an amount equal to 9.85% of covered payroll. The Authority's contributions to the FRS for the fiscal years ending September 30, 2005 through 2007 were $10,636, $12,451 and $15,849, respectively, which were equal to the required contributions for each fiscal year. The Authority has historically contributed amounts equal to required contributions and, therefore, does not have a pension asset or liability as determined in accordance with GASB Statement No. 27. Note 7— Risk management The Authority is exposed to various risks of loss related to tort; theft of, damage to, and destruction of assets; errors and omissions: injuries to employee; and natural disasters. The Authority participates in the coverage provided by the Board of County Commissioners of Monroe County Workers' Compensation, Group Insurance and Risk Management Fund internal service funds. Under these programs, the Worker's Compensation Fund provides $1,000,000 coverage per claim for regular employees. Risk Management has a $5,000,000 excess insurance policy for general liability claims with a $100,000 self-insured retention, and building property damage is covered for the actual value of the building with a deductible between $100,000 and $250,000. Deductibles for windstorm and flood vary by location. Monroe County purchases commercial insurance for claims in excess of coverage provided by the funds and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three years. The Authority makes payments to the Workers' Compensation, Group Insurance and Risk Management Funds based on estimates of the amounts needed to pay prior and current year claims. Note 8— Commitments The Authority had approximately $790,042 of commitments to acquire various properties as of September 30, 2007. 17 MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY (A Component Unit of Monroe County, Florida) Notes to Financial Statements Year Ended September 30, 2007 Note 9--Subsequent Event As discussed in Note 2, at September 30, 2007, the Authority had $8�655,797 invested in the State Board of Administration's Local Government Surplus Funds Trust Fund Investment Pool (Pool). On November 29, 2007, the State Board of Administration implemented a temporary freeze on the assets held in the Pool due to an unprecedented amount of withdrawals from the Pool coupled with the absence of market liquidity for certain securities within the Pool. The significant amount of withdrawals followed reports that the Pool held asset-backed commercial paper that was subject to sub-prime mortgage risk. On December 4, 2007, based on recommendations from an outside financial advisor, the State Board of Administration restructured the Pool into two separate pools. Pool A consisted of all money market appropriate assets, which was approximately $12 billion or 86% of Pool assets. Pool B consisted of assets that either defaulted on a payment, paid more slowly than expected, and/or had any significant credit and liquidity risk, which is approximately $2 billion or 14% of Pool assets. At the time of the restructuring, all current pool participants had their existing balances proportionately allocated into Pool A and Pool B. Currently, Pool A participants may withdraw 15% of their balance or $2 million, whichever is greater, without penalty. Withdrawals from Pool A in excess of the above limit are subject to a 2% redemption fee. New investments in Pool A are not subject to the redemption fee or withdrawal restrictions. Future withdrawal provisions in Pool A will be subject to further evaluation based on the maturities of existing investments and the liquidity requirements of the Pool. On December 21, 2007, Standard and Poor's Ratings Services assigned its "AAAm" principal stability fund rating to Pool A. Currently, Pool B participants are prohibited from withdrawing any amount from the Pool and a formal withdrawal policy has not yet been developed. Market valuations of the assets held in Pool B are not readily available. In addition, full realization of the principle value of Pool B assets is not readily determinable. As of November 29, 2007, the Authority had $7,694,816 and 1,252,644 invested in Pool A and B, respectively. Additional information regarding the Local Government Surplus Funds Trust Fund may be obtained from the State Board of Administration. As of November 29, 2007, the Authority had commitments to purchase approximately $809,000 worth of real property. Of these commitments, all but approximately $41,000 contained termination options in favor of the Authority. The Authority has no large property acquisitions expected to close until February 2008. To date the impact of the State Board of Administration's recent actions on the Authority's activities has been minor because daily operations and small real estate transactions are funded using cash accounts rather than the Pool. 18 REQUIRED SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA COMPREHENSIVE PLAN LAND AUTHORITY Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund (Budgetary Basis) Year Ended September 30, 2007 Variance with Final Budget Positive Budget Actual (Negative) Original Final Revenues Intergovernmental $ 2,390,000 $ 2,390,000 $ 2,914,835 $ 524,835 Miscellaneous income - - 756 756 Investment income 100,000 100,000 528,032 428,032 Mortgage proceeds 13,984 13,984 13,984 - Total revenues 2,490,000 2,490,000 3,457,607 953,623 Expenditures Current Personnel 236,000 236,000 199,743 32,400 Operating 121,500 121,500 66,624 54,876 Capital outlay 9,871,115 9,871,115 3,725,470 6,145,645 Total expenditures 10,228,616 10,228,615 3,991,837 6,232,921 Excess (deficiency) of revenues over(under) expenditures (7,738,615) (7,738,615) (534,230) 7,186,544 Fund balance, beginning of year 9,936,743 9,936,743 9,936,743 - Fund balance, end of year $ 2,198,127 $ 2,198,127 9,402,513 $ 7,186,544 Reconciliation of budgetary to full accrual basis Reconciling item Mortgage receivable 6,740,579 Compensation accrual (11,022) Fund balance, end of year(full accrual) $ 16,132,070 19 SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS • r ACCOUNIANTS 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 To the Governing Board Monroe County Comprehensive Plan Land Authority Monroe County, Florida: We have audited the financial statements of the governmental activities and the major fund of Monroe County Comprehensive Plan Land Authority (the "Authority') as of and for the year ended September 30, 2007, which collectively comprise the Authority's basic financial statements, and have issued our report thereon dated January 8, 2008 for the purpose of compliance with Section 218.29(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General-Local Govemmental Entity Audits. 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 Govemment Auditing Standards, issued by the Comptroller General of the United States. Internal Control over-Financial Reporting In planning and performing our audit, we considered the Authority's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control over financial reporting. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Authority's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Authority's financial statements that is more than inconsequential will not be prevented or detected by the Authority's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Authority's internal control. 20 Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above_ Compliance and Other Matters As part of obtaining assurance about whether the Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Govemment Auditing Standards. This report is intended solely for the information and use of management and applicable state agencies, and is not intended to be and should not be used by anyone other than these specified parties. Orlando, Florida January 8, 2008 21 INDEPENDENT AUDITORS' MANAGEMENT LETTER To the Governing Board Monroe County Comprehensive Plan Land Authority Monroe County, Florida: We have audited the financial statements of the governmental activities and the major fund of the Monroe County Comprehensive Plan Land Authority (the "Authority"), as of and for the year ended September 30, 2007, which collectively comprise the Authority's basic financial statements, and have issued our report thereon dated January 8, 2008 for the purpose of compliance with the requirements with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General-Local Governmental Entity Audits. 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. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, dated January 8, 2008, and it should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General. Those rules (Section 10.554(1)(i)1) require that we address in the management letter, if not already addressed in the auditors' report on compliance and internal controls, whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding audit report. The Rules of the Auditor General (Section 10.554(1)(i)2) state that a management letter shall have a statement as to whether or not the Authority complied with Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit of the financial statements of the Authority, the results of our tests did not indicate that the Authority was in noncompliance with Section 218.415 regarding the investment of public funds. The Rules of the Auditor General (Section 10.554(1)(i)3) require disclosure in the management letter of any recommendations to improve The Authority's management, accounting procedures, and internal controls. There were no recommendations in connection with the fiscal 2007 financial statement audit. The Rules of the Auditor General (Section 10.554(1)(i)4) require disclosure in the management letter of any violations of provisions of contracts and grant agreements or abuse that have an effect on the financial statements that is less than material but more than inconsequential. There were no such matters noted. 22 The Rules of the Auditor General (Section 10.554(1)(i)5) allow for the following matters that are inconsequential to the financial statements, considering both quantitative and qualitative factors, to be reported based on professional judgment: a. immaterial violations of laws, rules, regulations and contractual provisions or abuse; b. immaterial improper expenditures or legal acts; and c. control deficiencies that are not significant deficiencies. There are no such matters reported. The Rules of the Auditor General (Section 10.554(1)(i)6) also require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the management letter, unless disclosed in the notes to the financial statements. The Authority was established by under Monroe County, Florida Ordinance 031- 1986 pursuant to Florida Statute 380. There are no component units related to The Authority. As required by the Rules of the Auditor General (Section 10.554(1)(i)7.a), the scope of our audit - included a review of the provisions of Section 218.503(1), Florida Statutes, regarding financial emergencies. In connection with our audit of the basic financial statements of the Authority, the results of our tests did not indicate that the Authority met any of the specified conditions of a financial emergency contained in Section 218.503(1). However, our audit does not provide a legal determination on the Authority's compliance with this requirement. The Rules of the Auditor General (Section 10.554(1)(i)7.b) state that a management letter shall include a statement as to whether or not the financial report filed with the Florida Department of Financial Services, pursuant to Section 218.32, Florida Statutes, is in agreement with the annual financial audit report for the current audit period and, if not, explanations of any significant differences. The Authority, as a blended component unit of Monroe County, Florida (the "County), includes its financial information in the annual report filed on a consolidated basis by the County. Our comparison of the financial report filed by the County with the Florida Department of Financial Services to the County's 2007 audited financial statements resulted in no material differences. As required by the Rules of the Auditor General (Sections 10.554(1)(i)7.c. and 10.556), we applied financial condition assessment procedures. It is management's responsibility to monitor the Authority's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by management. The results of our financial condition assessment procedures disclosed no deteriorating financial conditions. This management letter is intended solely for the information and use of management, the State of Florida Office of the Auditor General, and applicable state agencies, and is not intended to be and should not be used by anyone other than these specified parties. Orlando, Florida January 8, 2008 23 MONROE COUNTY LAND AUTHORITY 1200 TRUMAN AVENUE, SUITE 207 • KEY WEST, FLORIDA 33040 PHONE (305) 295-5180 • FAX (305) 295-5181 March 3, 2008 Auditor General of the State of Florida Room 231, Holland Building Tallahassee, FL 32301 Re: Audit of the Monroe County Comprehensive Plan Land Authority for Fiscal Year ending September 2007 Dear Sir or Madam: Below please find my responses to the management letter comments included in the annual audit of the Monroe County Comprehensive Plan Land Authority for the fiscal year ending September 2007. Monroe County Comprehensive Plan Land Authority No management letter comments. No response necessary. Please contact me if you require any additional information on this matter. �}Siincerely, Mark J. Rosch Executive Director