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MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND
AUTHORITY
(A Component Unit of Monroe
County, Florida)
FINANCIAL STATEMENTS
As of and for the Year Ended September 30, 2012
i'
/ And Independent Auditors'Report
i
t
f/sir
Cherry B r ''"
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Table of Contents
Page
Independent Auditors' Report------------------------------------------------------------------------------------------------ 2 - 3
Management's Discussion and Analysis------------------------------------------------------------------------------- 4 - 7
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 - 21
-----------------------------------------------------------------------------------------
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures and Changes in Fund
Balance - Budget and Actual - General Fund (Budgetary Basis).----------------------------- 22
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................................................................................23 - 24
Independent Auditors' Management Letter---------------------------------------------------------------------25 - 26
Cherry Bekaert"
R Ire r6,l°dn,,r.}o
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, 2012,
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 respective financial position of the governmental activities and the major fund of the
Authority as of September 30, 2012, and the respective changes in financial position thereof 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 our report dated
February 7, 2013 on our consideration of the Authority's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of that report is to describe the scope of our testing
of internal control over financial reporting and compliance and the results of that testing and not
to provide an opinion on the internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
2
Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis and the Required Supplementary Information as listed
in the table of contents be presented to supplement the financial statements. Such information,
although not a part of the financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the
financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the financial
statements, and other knowledge we obtained during our audit of the financial statements. We
do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
This report is intended solely for the information and use of the Authority's management and the
Florida Auditor General, and is not intended to be and should not be used by anyone other than
these specified parties.
Orlando, Florida
February 7, 2013
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, 2012.
Overview of the Financial Statements
This discussion and analysis serves as an introduction and guide to the Authority's basic
financial statements. The Authority's basic financial statements consist of three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. In addition to basic financial statements, this report also contains supplementary
information addressing budget, internal control, and compliance issues.
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 Authority'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. In this format capital assets are capitalized and depreciated, whereas in the fund-level
format described below the related purchases are treated as expenses.
Fund Financial Statements. 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. This information is
useful in evaluating the Authority's ability to fund new acquisitions in the near-term.
Since 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 fund level and government-wide activities.
The Authority adopts an annual appropriated budget. A budgetary comparison statement has
been provided to demonstrate compliance with this budget.
Notes to the Financial Statements. The notes contained in this report provide additional
information that is essential to a full understanding of the data provided. The notes are an
integral part of the basic financial statements.
4
Other Information. In addition to 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
Statement of Net Assets. In the Statement of Net Assets presented on page 8, the Authority's
assets total $41,690,351 and include cash and cash equivalents, amounts due from other
governments for tourist impact tax and park surcharge fees, mortgages receivable, office
equipment, and capital assets in the form of acquired land. The cash and cash equivalents
include funds invested in the Local Government Surplus Trust Funds Investment Pool Fund B,
which are subject to withdrawal restrictions and an unrealized loss described in Note 2. The
mortgage receivables consist of ten long-term balloon loans issued for the acquisition of
affordable housing sites as described in Note 3, two of which are forgivable.
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. The Authority's cash and cash equivalents
total $13,251,371. This amount compares with $12,263,786 at the end of the previous fiscal
year, an increase of $987,585. Approximately 45% of the Authority's assets consist of land
acquired for specific public purposes, approximately 22% consist of mortgages, and
approximately 32% are categorized as cash and cash equivalents.
The Authority's current liabilities consist of accounts payable, accrued wages, and compensated
absences (annual leave and sick leave) forecasted to be used during the upcoming year. The
Authority's non-current liabilities consist of compensated absences that are forecasted not to be
used during the upcoming year. Total liabilities are $95,672.
The Authority's resulting net assets are categorized as those invested in capital assets, those
restricted specifically for the acquisition of land (listed as "restricted"), and those which may be
used for all purposes authorized by the Authority's enabling legislation (listed as "unrestricted").
The Authority's total net assets are $41,594,679, an increase of$3,170,749 over the prior year.
Of this total, $18,886,895 is invested in capital assets, $6,325,340 is restricted for the
acquisition of property, and $16,382,444 is unrestricted.
The following table provides a condensed comparison of the Authority's Statement of Net
Assets at year end for 2012 and 2011:
2012 2011
Cash and cash equivalents $ 13,251,371 $ 12,263,786
Capital and other assets 28,438,980 26,251,994
Total assets 41,690,351 38,515,780
Total liabilities 95,672 91,850
Net assets
Invested in capital assets, net of related debt 18,886,895 17,505,588
Restricted 6,325,340 5,284,771
Unrestricted 16,382,444 15,633,571
Total net assets $ 41,594,679 $ 38,423,930
5
Statement of Activities. In the Statement of Activities presented on page 9, the Authority's
revenues total $3,752,685 and include intergovernmental revenue consisting of tourist impact
tax and park surcharge fees, investment income consisting of interest on cash and investment
accounts, and miscellaneous income from a grant. The investment income shown is the total of
interest on cash and investment accounts plus the current year portion of the unrealized gain on
funds invested in Local Government Surplus Trust Funds Investment Pool Fund B described in
Note 2. The Authority's overall revenues increased by $385,533 compared to the prior year.
This increase was primarily due to an increase in tourist impact tax revenue.
The program expenses in the Statement of Activities total $581,936 and consist of land
contribution conveyances and general government expenses. The referenced land contribution
conveyances reflect the $273,857 reduction in the Authority's land inventory to account for the
donation of conservation land on Little Torch Key to the State of Florida and the donation of
conservation land on Grassy Key to the City of Marathon. The $308,079 in general government
expenses includes the Authority's personnel and operating expenses plus the amount by which
compensated absences increased during the current year. Total program expenses for fiscal
year 2012 increased by $285,848 compared to the prior year, largely due to the referenced
donations of land.
The following table provides a condensed comparison of the Authority's governmental activities
at year end for 2012 and 2011:
2012 2011
General revenues:
Intergovernmental $ 3,625,378 $ 3,247,727
Investment income 59,909 51,100
Miscellaneous income 67,398 45,908
Land contributions - 22,417
Total general revenues 3,752,685 3,367,152
Program expenses:
Land contribution conveyances 273,857 -
General government 308,079 296,088
Total program expenses 581,936 296,088
Increase in net assets $ 3,170,749 $ 3,071,064
Financial Analysis of the General Fund
As noted above, the Authority uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
The Authority's General Fund financial statements provide information on near-term inflows,
outflows, and balances of spendable resources. This information can be useful in assessing the
Authority's ability to fund new acquisitions in the near-term.
6
Balance Sheet. The General Fund Balance Sheet presented on page 10 lists the Authority's
assets and liabilities in a manner similar to the government-wide Statement of Net Assets.
However, since the General Fund Balance Sheet is a fund-level presentation providing a near-
term perspective, the assets section excludes the Authority's capital assets (land) and the
liability section excludes compensated absences that the Authority will pay in the future.
Presented in this manner, the Authority's assets are $22,803,456 and its liabilities are $12,381.
This statement identifies $22,791,075 of total fund balance. Of this total, $9,151,579 is
attributable to funds the Authority may receive in the future from the repayment of mortgage
loans and is therefore classified as nonspendable; $6,325,340 is attributable to funds restricted
for land acquisition and is therefore classified as restricted; $4,443,414 is attributable to funds
assigned for reserves; and $2,870,742 is attributable to funds which may be used for all
purposes authorized by the Authority's enabling legislation and is therefore classified as
unassigned.
Statement of Revenues, Expenditures and Changes in Fund Balance. The General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance presented on page 11
lists the Authority's revenues and expenditures in a manner similar to the government-wide
Statement of Activities. However, in this format the revenues exclude land contributions, while
the expenditures include land purchases (as capital outlay) and exclude land donations to other
entities (land contribution conveyances). Presented in this manner, the Authority's revenues are
$3,752,685 and its expenditures are $1,958,431.
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. To account
for unanticipated grant revenue, there was one supplemental appropriation to amounts originally
budgeted for fiscal year 2012.
As shown in the Budget and Actual schedule on page 22, the Authority operated within the limits
established by its adopted budget. Actual revenues exceed the budgeted amount by
$1,255,287, while actual expenditures are $10,098,281 less than budget. Most of the revenue
surplus consists of tourist impact tax revenue. The investment income of $59,909 consists of
$18,788 of interest together with the $41,121 current year portion of the unrealized gain on
funds invested in Local Government Surplus Trust Funds Investment Pool Fund B described in
Note 2. The schedule's positive expenditure variance includes budgeted reserves held for
specific acquisition projects.
Capital Asset Administration
As shown in Note 4 on page 17, the Authority's investment in capital assets amounts to
$18,886,895, an increase of $1,381,307 compared to the prior year. The increase was the net
result of$1,655,622 of land acquired less $458 in equipment depreciation and less $273,857 of
land donated for conservation.
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, 2012
Assets
Cash and cash equivalents $ 13,251,371
Due from BOCC 376,310
Due from State of Florida 24,196
Mortgages receivable 9,151,579
Equipment, net of accumulated depreciation 992
Capital assets-land 18,885,903
Total assets 41,690,351
Liabilities
Current liabilities:
Accounts payable 1,091
Accrued wages 11,290
Compensated absences 15,761
Total current liabilities 28,142
Noncurrent liabilities:
Compensated absences 67,530
Total noncurrent liabilities 67,530
Total liabilities 95,672
Net assets
Invested in capital assets 18,886,895
Restricted 6,325,340
Unrestricted 16,382,444
Total net assets $ 41,594,679
The notes to the financial statements
are an integral part of this statement. 8
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
Statement of Activities
For the Year Ended September 30, 2012
General revenues
Intergovernmental $ 3,625,378
Investment Income 59,909
Miscellaneous income 67,398
Total general revenues 3,752,685
Program expenses
Land contribution conveyances 273,857
General government 308,079
Total program expenses 581,936
Increase in net assets 3,170,749
Net assets - beginning of year 38,423,930
Net assets - end of year $ 41,594,679
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, 2012
Assets
Cash and cash equivalents $ 13,251,371
Due from BOCC 376,310
Due from State of Florida 24,196
Mortgages receivable 9,151,579
$ 22,803,456
Liabilities and Fund Equity
Liabilities
Accounts payable $ 1,091
Accrued wages 11,290
Total liabilities 12,381
Fund balance
Nonspendable: mortgage loans 9,151,579
Restricted: land acquisition 6,325,340
Assigned: reserves 4,443,414
Unassigned: fund balance 2,870,742
Total fund balances 22,791,075
Total liabilities and fund balance $ 22,803,456
Amounts reported in the statement of net assets differ
from amounts reported above as follows:
Fund balance - total governmental funds $ 22,791,075
Capital assets used in governmental activities are not financial
resources and therefore are not reported above. 18,886,895
Compensated absences are not due and payable in the current
period and, therefore, are not reported in the governmental funds. (83,291)
Net assets of governmental activities $ 41,594,679
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
For the Year Ended September 30, 2012
Revenues
Intergovernmental $ 3,625,378
Miscellaneous income 67,398
Investment income 59,909
Total revenues 3,752,685
Expenditures
Current
Personnel 219,194
Operating 83,615
Capital outlay 1,655,622
Total expenditures 1,958,431
Excess of revenues over expenditures 1,794,254
Fund balance, beginning of year 20,996,821
Fund balance, end of year $ 22,791,075
Amounts reported for governmental activities in the statement
of activities are different because:
Net change in fund balances-total governmental fund $ 1,794,254
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those
assets is capitalized net of accumulated depreciation of$458 1,655,164
Land contribution conveyances are not reported on government
funds; this is the amount of land conveyances and
land contributions during the fiscal year 2012 (273,857)
Compensated absences do not use current financial
resources and are not reported on the Governmental Funds but
are included in the Statement of Activities. (4,812)
Change in net assets of governmental activities $ 3,170,749
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, 2012
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. 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 Monroe County, Florida. 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 Monroe 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.
Budget — Prior to, or on September 30, the Authority's budget is legally enacted through
passage of a resolution. There was one supplemental appropriation 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 2012, the following adjustments were necessary to present the actual data on a
budgetary basis for the General Fund:
GAAP basis $1,794,254
Compensation accrual difference 1,150
Mortgage funds (775,000)
Non-GAAP budgetary basis $1,020,404
12
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
Note 1 —Summary of significant accounting policies (continued)
Capital Assets — Capital assets are defined by the Authority as land and those 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 equipment and, when purchased, are recorded at the
Authority's cost. Where land was acquired by donation on or prior to September 30, 2010, the
asset was 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. Where land was acquired by
donation after September 30, 2010, the asset is recorded at the Authority's transaction cost plus
the tax assessed value at the time of donation. Land is not depreciated since it does not have a
determinable useful life. Equipment is depreciated using the straight line method over the useful
life of the equipment.
Net Assets/Fund Balances
Net Assets — Net assets in the government-wide fund financial statements are classified as
invested in capital assets, net of related debt; restricted; and unrestricted. Restricted net assets
represent constraints on resources that are either externally imposed by creditors, grantors,
contributors, or laws or regulations of other governments imposed by law through state statute.
Fund Balances — In the governmental fund financial statements, fund balance is composed of
five classifications designated to disclose the hierarchy of constraints placed on how fund
balance can be spent. The government fund types classify fund balances as follows:
Nonspendable — Include amounts that cannot be spent because they are either not in
spendable form, or for legal or contractual reasons, must be kept intact. This
classification includes inventories, prepaid amounts, assets held for sale, and long-term
receivables.
Restricted — Constraints placed on the use of these resources are either externally
imposed by creditors (such as through debt covenants), grantors, contributors or other
governments; or are imposed by law (through constitutional provisions or enabling
legislation).
Committed — Amounts that can only be used for specific purposes because of formal
action (resolution or ordinance) by the government's highest level of decision-making
authority.
Assigned —Amounts that are constrained by the Authority's intent to be used for specific
purposes, but that do not meet the criteria to be classified as restricted or committed.
Intent can be stipulated by the governing body, another body (such as a Finance
Committee), or by an official whom that authority has been given. With the exception of
the General Fund, this is the residual fund balance classification for all governmental
funds with positive balances.
13
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
Note 1 —Summary of significant accounting policies (continued)
Net Assets/Fund Balances (continued)
Unassigned — This is the residual classification of the General Fund. Only the General
Fund reports a positive unassigned fund balance. Other governmental funds might
report a negative balance in this classification, as the result of overspending for specific
purposes for which amounts had been restricted, committed, or assigned.
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.
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, 2012, the Authority has the following deposits and investments:
Demand deposits $13,055,476
Local Governmental Surplus Trust Florida PRIME 36,254
Local Governmental Surplus Trust Florida B 168,226
Unrealized Loss in Fund B (8,585)
Total cash and cash equivalents $13,251,371
The Authority places its cash and cash equivalents on deposit with financial institutions in the
United States. The Federal Deposit Insurance Corporation (FDIC) covers $250,000 for
substantially all depository accounts. The Authority from time to time may have amounts on
deposit in excess of the insured limits and the remaining balances are insured 100% 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. As of September 30, 2012, the
cash and cash equivalents have a bank balance of$13,306,830.
14
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
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.
As of September 30, 2012, the Authority had $204,480 invested in the Local Government
Surplus Trust Fund, which was 1.54% of the Authority's total cash and cash equivalents. Of the
$204,480 invested, the Authority had $168,226 invested in Fund B and $36,254 invested in
Florida PRIME.
The Local Government Surplus Trust Fund has been in existence for over 25 years and is
administered by the Governor, Chief Financial Officer, and Attorney General of the State of
Florida sitting as the State Board of Administration. On November 29, 2007, the SBA
suspended withdrawals from the Fund due to concerns of insufficient liquidity. On December 4,
2007 the SBA divided the Fund into two pools, Fund A and Fund B, based on security quality.
Fund A re-opened for limited withdrawals on December 5, 2007 and has since resumed normal
operations under the name Florida PRIME. Fund B remains closed to withdrawals and new
investors. Participants receive periodic distributions of their Fund B principal in the form of
transfers to their Fund A accounts. As of September 30, 2012, the SBA had returned 86.9% of
Fund B's original balance to investors in this manner.
When the SBA created Fund B on December 4, 2007, the Authority had an account balance of
$1,287,034. As of September 30, 2012, the SBA had returned $1,118,808 of this amount to the
Authority, leaving a balance of$168,226. Due to the poor quality of Fund B's underlying assets,
the net asset value of the Authority's account balance on September 30, 2012 was $159,641,
yielding an unrealized loss of$8,585. Since $49,706 of the unrealized loss was already included
in the Authority's financial statements through 2011, the current year portion was an unrealized
gain of$41,121.
The Florida PRIME is rated by Standard and Poors. The current rating is AAAm. The weighted
average days to maturity (WAM) of the Florida PRIME at September 30, 2012 is 39 days. Next
interest rate reset days for floating rate securities are used in the calculation of the WAM. The
Florida PRIME was not exposed to any foreign currency risk during the period from October 1,
2011 through September 30, 2012. The Florida PRIME did not participate in securities lending
program in the period October 1, 2011 through September 30, 2012.
The Fund B is not rated by any nationally recognized rating agency. The weighted average life
(WAL) (based on expected future cash flows) of Fund B at June 30, 2012 is estimated at 4.08
years. However, because Fund B consists of restructured or defaulted securities there is a
considerable uncertainty regarding the weighted average life. The Fund B was not exposed to
any foreign currency risk during the fiscal year ending June 30, 2012. The Fund B did not
participate in securities lending program in the fiscal year ending June 30, 2012.
15
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
Note 3— Mortgages receivable
Mortgages receivable as of September 30, 2012 are as follows:
First mortgage due from governmental agency, collateralized by land,
payable in full April 2028, interest free (OR 1514-594) $ 382,554
Second mortgage due from governmental agency, collateralized by land,
payable in full November 2034, interest free (OR 1697-2076) and (as
amended at OR 2442-1497) 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,
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
Second mortgage due from governmental agency, collateralized by land,
payable in full July 2040, interest free (OR 2475-1762) 836,000
Third mortgage due from governmental agency, collateralized by land,
forgivable July 2040, interest free (OR 2475-1767) 800,000
Second mortgage due from governmental agency, collateralized by land,
payable in full November 2041, interest free (OR 2541-877) 225,000
Third mortgage due from governmental agency, collateralized by land,
forgivable November 2041, interest free (OR 2541-885) 550,000
Total mortgages receivable $ 9,151,579
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.
16
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
Note 4—Capital assets
A summary of changes in capital assets is as follows:
Balance Balance
09/30/11 Additions Deductions 09/30/12
Capital assets, not depreciated:
Land $ 17,504,138 $ 1,655,622 $ (273,857) $ 18,885,903
Total capital assets, not depreciated 17,504,138 1,655,622 (273,857) 18,885,903
Capital assets, depreciated:
Equipment 2,290 - - 2,290
Total capital assets, depreciated 2,290 - - 2,290
Less accumulated depreciation (840) (458) (1,298)
Total capital assets, depreciated, net 1,450 (458) - 992
Total capital assets, net $ 17,505,588 $ 1,655,164 $ (273,857) $ 18,886,895
The City of Key West leases one property with a cost of $101,606 from the Authority. This
property, which is included in capital assets, is used to provide city recreational facilities. The
term of the lease provides 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 one half of all accrued sick leave, with a maximum 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
09/30/11 Additions Deductions 09/30/12 Portion
Compensated absences $ 78,479 $ 20,573 $ (15,761) $ 83,291 $ 15,761
Note 6— Retirement system
Plan Description — The Land Authority's employees participate in the Florida Retirement
System ("FRS"), administered by the Florida Department of Management Systems. Employees
elect to participate in either the defined benefit plan ("Pension Plan"), a cost sharing, multiple-
17
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
Note 6— Retirement system (continued)
employer, defined benefit retirement plan, or the defined contribution plan ("Investment Plan")
under the FRS. FRS provides retirement and disability benefits, annual cost-of-living
adjustments, and death benefits to Pension Plan members and beneficiaries of various
governmental units within the State of Florida. 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.
For employees hired before July 1, 2011 and enrolled in the Pension Plan, the FRS provides for
vesting of benefits after 6 years of credited service. Normal Pension Plan retirement benefits are
available to employees who retire at or after age 62 with 6 or more years of service or after 30
years if under age 62. Benefits are also based on the 5 highest state fiscal years of
compensation earned during covered employment. For employees hired July 1, 2011 and
thereafter enrolled in the Pension Plan, the FRS provides for vesting benefits after 8 years of
credited service. Normal retirement benefits are available to employees who retire at or after
age 65 with 8 or more years of service or after 33 years if under age 65. Benefits are also based
on the 8 highest state fiscal years of compensation earned during covered employment.
Pension Plan retirement benefits for all employees are based on age, average compensation
and years-of-service credit. Early retirement is available after 6 years of service with a 5%
reduction in benefits for each year prior to the normal retirement age.
In addition to the above benefits, the FRS administers the 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 employees electing to participate in the Investment Plan rather than the Pension Plan,
vesting occurs at one year of service. These participants receive a contribution of self-direction
in an investment product with a third party administrator selected by the State Board of
Administration. Investment accounts may be withdrawn by an employee 90 days after
termination or retirement.
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 Florida Division of Retirement, 2639 Monroe Street, Building C,
Tallahassee, FL 32399-1560, or from the website www.dms.myflorida.com/retirement.
Funding Policy — The FRS was noncontributory for Pension Plan and Investment Plan
members until June 30, 2011. As of July 1, 2011 all members, with the exception of Deferred
Retirement Option Program (DROP) members and re-employed retirees, contribute 3% of their
eligible wages. Participating employer contributions are based upon state-wide rates
established by the State of Florida on an annual basis effective each July 1. The rates applied
to employee salaries effective as of July 1, 2012 are as follows: regular employees, 5.18%,
special risk employees, 14.90%, special risk administrative support, 5.91%, elected officials,
10.23%, senior management, 6.30%, and DROP participants 5.44%. The Authority contributed
18
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
Note 6— Retirement system (continued)
to the plan an amount equal to 4.96% of covered payroll during the fiscal year ended September
30, 2012. The Authority's contributions made during the years ended September 30, 2012,
2011, and 2010 were $8,599, $15,554, and $16,677, 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 of September 30, 2012.
Note 7—Other Postemployment Benefit (OPEB) Plan
The Monroe County Board of County Commissioners (BOCC) administers a single-employer
defined benefits healthcare plan (the "Plan"). Florida Statutes 112.0801 requires the County to
provide retirees and their eligible dependents with the option to participate in the Plan if the
County provides health insurance to its active employees and their eligible dependents. The
Plan provides medical coverage, prescription drug benefits, and life insurance to both active
and eligible retired employees. The Plan does not issue a publicly available financial report.
The BOCC may amend the plan design, with changes to the benefits, premiums and/or levels of
participant contribution at any time. In an open session, on at least an annual basis and prior to
the annual enrollment process, the BOCC approves the rates for the coming calendar year for
the retiree and County contributions.
Eligibility for post employment participation in the Plan is limited to full time employees of the
County, the Authority, and the Constitutional Officers. Employees who retire as an active
participant in the Plan and were hired on or after October 1, 2001 may continue to participate in
the Plan by paying the monthly premium established annually by the BOCC. Employees who
retire as an active participant in the plan, were hired before October 1, 2001, have at least ten
years of full time service with the County, and meet the retirement criteria of the Florida
Retirement System (FRS) may continue to participate in the Plan at a cost equal to the FRS
Health Insurance Subsidy for ten years of service (currently $5 per month for each year of
service credit at retirement or $50 per month). Retirees who have met the requirements for early
retirement, have not achieved age 60 and whose age and years of service do not equal 70 (rule
of 70) must pay the standard monthly premium until the age criteria or the rule of 70 is met. At
that time, the retiree's cost of participation will be equal to the FRS Health Insurance Subsidy.
Surviving spouses and dependents of participating retirees may continue in the plan if eligibility
criteria specific to those classes are met.
The BOCC engages an actuarial firm on a biannual basis to determine the County's actuarially
determined annual required contribution and unfunded obligation. The Authority has no
responsibility to the Plan other than to make the periodic payments determined by the BOCC.
Further information about the Plan is available in the County's Comprehensive Annual Financial
Report which is published on the Clerk's website at www.clerk-of-the-court.com.
19
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
Note 8— Fund Balance
As a general rule, the Executive Director will select the most restricted resource permissible and
available to fund a given activity. This practice will generally track the following hierarchy:
miscellaneous funds consisting of grants restricted for specific purposes, State Park and Tourist
Impact Tax funds, and lastly unrestricted sources such as interest income and unrestricted
miscellaneous funds. In terms of fund balance classification, expenditures are generally to be
spent from restricted fund balance first, followed in order by committed fund balance, assigned
fund balance, and lastly unassigned fund balance as applicable. The Executive Director has
the authority to deviate from this practice if it is in the best interest of the Authority.
The following schedule provides management and citizens with information on the position of
General Fund balance that is available for appropriation.
Total fund balance - General fund $ 22,791,075
Less:
Mortgage loans 9,151,579
Restricted for land acquisition 6,325,340
Assigned for reserves 4,443,414
Remaining fund balance $ 2,870,742
Note 9— 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 employees; and natural disasters. The
Authority participates in the coverage provided by the Board for Workers' Compensation, Group
Insurance, and Risk Management internal service funds. Under these programs, Workers'
Compensation provides $500,000 coverage per claim for regular employees. Workers'
Compensation claims in excess of the self-insured coverage are covered by an excess
insurance policy. Risk Management has a $5,000,000 excess insurance policy for general
liability claims with a $200,000 self insured retention, and building property damage is covered
for the actual cost of the buildings with a deductible of $50,000. 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 10— Commitments
The Authority had approximately $376,304 of commitments to acquire various properties,
$205,000 of commitments to issue mortgage loans, and two commitments to donate
conservation lands to the United States of America totaling $251,457 as of September 30, 2012.
20
MONROE COUNTY, FLORIDA
COMPREHENSIVE PLAN LAND AUTHORITY
(A Component Unit of Monroe County, Florida)
Notes to Financial Statements (continued)
Year Ended September 30, 2012
Note 11 — Subsequent Events
In preparing the financial statements, the Monroe County Comprehensive Plan Land Authority
has evaluated events and transactions for potential recognition or disclosure. Monroe County
Comprehensive Plan Land Authority did not have any subsequent events or transactions
requiring recording or disclosure in the financial statements through February 7, 2013, the date
that the financial statements were available to be issued.
21
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)
For the Year Ended September 30, 2012
Variance
with Final
Budget
Positive
Budget Actual (Negative)
Original Final
Revenues
Intergovernmental $ 2,390,000 $ 2,390,000 $ 3,625,378 $ 1,235,378
Miscellaneous income - 67,398 67,398 -
Investment income 40,000 40,000 59,909 19,909
Total revenues 2,430,000 2,497,398 3,752,685 1,255,287
Expenditures
Current
Personnel 236,000 236,000 218,044 17,956
Operating 121,500 121,500 83,615 37,885
Capital outlay 11,225,664 11,293,062 1,655,622 9,637,440
Mortgage outflows 1,180,000 1,180,000 775,000 405,000
Total expenditures 12,763,164 12,830,562 2,732,281 10,098,281
Excess (deficiency) of revenues
over(under) expenditures (10,333,164) (10,333,164) 1,020,404 11,353,568
Fund balance, beginning of year 12,630,382 12,630,382 12,630,382 -
Fund balance, end of year $ 2,297,218 $ 2,297,218 13,650,786 $ 11,353,568
Reconciliation of budgetary
to full accrual basis
Reconciling items
Mortgages receivable 9,151,579
Compensation accrual (11,290)
Fund balance, end of year(full accrual) $ 22,791,075
22
SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS
Cherry Bekaet"
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, 2012, which collectively comprise the Authority's basic financial
statements as listed in the table of contents, and have issued our report thereon dated February
7, 2013 for the purpose of compliance 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.
Internal Control over Financial Reporting
Management of the Authority is responsible for establishing and maintaining effective 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 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 Authority's financial statements will not be
prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies
in internal control over financial reporting that might be deficiencies, 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.
23
Compliance and Other Matters
As part of obtaining reasonable 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 Government Auditing
Standards.
This letter is intended solely for the information and use of the Authority's management and the
Florida Auditor General, and is not intended to be and should not be used by anyone other than
these specified parties.
Orlando, Florida
February 7, 2013
24
Cherry Beer "
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"), a component unit of
Monroe County, Florida, as of and for the year ended September 30, 2012, and have issued our
report thereon dated February 7, 2013.
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, and Chapter
10.550, Rules of the Florida Auditor General. 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.
Disclosures in this report, dated February 7, 2013, 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-Local Governmental Entity Audits, which govern the conduct of local government entity
audits performed in the State of Florida. This letter includes the following information, which is
not included in the aforementioned auditors' report.
Section 10.554(1)(i)l, Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address findings and recommendations made in the
preceding annual financial report. No recommendations were made in the preceding annual
financial audit report.
Section 10.554(1)(i)2, Rules of the Auditor General, requires our audit to include a review of the
provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In
connection with our audit of the financial statements of the Authority, nothing came to our
attention that could cause us to believe that the Authority was in noncompliance with Section
218.415 regarding the investment of public funds.
Section 10.554(1)(i)3, Rules of the Auditor General, requires that we address in the
management letter any recommendations to improve financial management. In connection with
our audit, we did not have any such recommendations.
Section 10.554(1)(i)4, Rules of the Auditor General, requires that we address violations of
provisions of contracts or grant agreements, fraud, illegal acts, or abuse, that have occurred, or
are likely to have occurred, that have an effect on the financial statements that is less than
material but more than inconsequential. In connection with our audit, we did not have any such
findings.
25
Section 10.554(1)(i)5, Rules of the Auditor General, provides that the auditor may, based on
professional judgment, report the following matters that have an inconsequential effect on the
financial statements, considering both quantitative and qualitative factors: (1) violations of
provisions of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) deficiencies in
internal control that are not significant deficiencies. In connection with our audit, we did not have
any such findings.
Section 10.554(1)(i)6, Rules of the Auditor General, requires that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be
disclosed in this management letter, unless disclosed in the notes to the financial statements.
The Authority was established under Monroe County, Florida Ordinance 031-1986 pursuant to
Florida Statute 380. There are no component units related to the Authority.
Section 10.554(1)(i)7.a, Rules of the Auditor General, requires that a statement be included as
to whether or not the local governmental entity has met one or more conditions described in
Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In
connection with our audit, we determined that the Authority did not meet any of the conditions
described in Section 218.503(1), Florida Statutes.
Section 10.554(1)(i)7.b, Rules of the Auditor General, requires that we determine whether the
annual financial report for the Authority for the fiscal year ended September 30, 2012, filed with
the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes,
is in agreement with the annual financial audit report for the fiscal year ended September 30,
2012. The Authority, as a blended component unit of Monroe County, Florida, includes its
financial information in the annual report filed on a consolidated basis by the County. In
connection with our audit, we determined that these two reports were in agreement.
Section 10.554(1)(i)7.c and 10.556(7), Rules of the Auditor General, requires that we apply
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 the financial information provided by
same. The results of our financial condition assessment procedures disclosed no deteriorating
financial conditions.
This letter is intended solely for the information and use of the Legislative Auditing Committee,
members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, Federal and other granting agencies, and applicable management, and is not intended
to be and should not be used by anyone other than these specified parties.
Orlando, Florida
February 7, 2013
26