Fiscal Year 1993 & 1994 OROE COUNTY FLORIDA
MUNICIPAL SERVICE DISTRICT
FINANCIAL STATEMENTS
SEPTEMBER 30 1994 AND 1993
E GREEN, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
CONTENTS
Paqes
Independent Auditors' Report 1
Financial Statements:
Balance Sheets 2-
Statements of Revenue, Expenses and Changes in Fund Equity
Statements of Cash Flows -
Notes to Financial Statements 7-1
Other Reports:
Report on the Internal Control Structure and Management Comments 17-1
Report on Compliance with Laws and Regulations 19
Report on Bond Compliance 2
Supplemental Schedule:
Schedule of Expenditures - Budget and Actual 21
KEMP t4 GREEN, P.A.
Certified Public Accountants
1438 KEN NEDY DRIVE
P. 0. BOX 1529
KEY WEST, FLORIDA 33041-1529 MEMBER OF AMERICAN INSTITUTE
WM. O. KEMP, C.P.A. (305) 294-2581 AND FLORIDA INSTITUTE OF
MARVA E. GREEN, C.P.A. FAX # (305) 294-4778 CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
Clerk Ex Officio
Board of County Commissioners
Monroe County, Florida
We have audited the financial statements of the Monroe County, Florida Municipal
Service District as of September 30, 1994 and 1993, and for the years then ended,
listed in the accompanying table of contents. These financial statements are the
responsibility of the County's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Audltlny 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
opinion.
As discussed in Note 1, the financial statements present only the Monroe County
Municipal Service District and are not intended to present fairly the financial
position of Monroe County, Florida and the results of its operations and its cash
flows in conformity with generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Monroe County, Florida Municipal
Service District as of September 30, 1994 and 1993, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The schedule listed in the foregoing table of
contents, which is also the responsibility of the management of the County, is
presented for purposes of additional analysis and is not a required part of the
financial statements of the County. Such additional information has been
subjected to the auditing procedures applied in the audit of the financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the financial statements taken as a whole.
Kemp & Green, P.A.
Certified Public Accountants
March 8, 1995
-1-
MONROE COUNTY FLORIDA
MUNICIPAL SERVICE DISTRICT
BALANCE SHEETS
SEPTEMBER 30 1994 AND 1993
ASSETS
1994 1993
Current Assets:
Cash and Cash Equivalents 5,709,531 5,809,288
Investments at Cost or Amortized Cost 5,094, 184 2,91,052
Accounts Receivable - Net of Allowances for
Uncollectible Accounts of $1,063,669 and
$1,113, 188 for 1994 and 1993 respectively 540,510 430,395
Due From Other Funds - 1,105
Due From Other Governments 219,288 112,609
Interest Receivable 67,057 37,212
Total Current Assets 11,630,570 9,371,661
Restricted Assets:
Cash and Cash Equivalents 596,384 5 ,531
Investments at Cost or Amortized Cost 1,669,084 3,690,020
Total Restricted Assets 2,265,468 4,27 ,551
Plant, Property and Equipment:
Land 4, 22,016 4, 22,016
Buildings and Other Improvements 1,041,993 267,63
Equipment 14,560, 142 13,072,450
Construction in Progress 67,865 -
20,492,016 1 , 162,149
Less Accumulated Depreciation and Depletion 10,316,533 9,231,640
Net Plant, Property and Equipment 10, 175,43 8,930,509
Deferred Charges - Unamortized Debt
Expense, Net 25,600 302, 82
Total Assets $ 24.357, 121 22.883.203
The accompanying notes are an integral part
of these financial statements.
-2-
MONROE COUNITY,—FLORID
_MUN. IKIPAL SERVICE DISTRICT
BALANCE SHEEjj,_LQontinuedj
SEPTEMIBER 30,. ..994 AND 1993
LIABILITIES AND FUND EnUTTY,
----- 1994 1993
Current Liabilities:
Accounts Payable $ 2,286,336 $ 584,995
Due to Other Funds 6,957 69,891
Due to Customers 260,969 266,978
Accrued Wages and Benefits Payable 65,459 53,211
Accrued Compensated Absences 19,584 -
Capital Leases Payable 129,927
Deposits 4 102
............................. .9.,&..........._ ...........................
Total Current Liabilities 2,..809,,,.334, 1 025,126
Current Liabilities Payable from
Restricted Assets:
Current Portion of Long-term Debt 300,000 920,788
Accrued Interest 295,459 303,328
Landfill Closure Costs ................6 6.8.....212. 4
......... ....... ......................H.Lw
Total Accounts Payable from
Restricted Assets _j,,263 671 5 86J26
Long-term Debt:
Revenue Bonds, Net of Current Portion 8,805,000 9,105,000
Due to Monroe County Land Authority 444,639 442,529
Accrued Compensated Absences 144,923 115,651
Capital I eases Payable 2,083,524 -
Special Obligation Notes Payable - ---50,,953,
Total Long-term Debt 11_.418 08� 9g 714...13
Total Liabilities 15,,551.091 16,326.185
Fund Equity:
Contributed Capital 2,813,849 2A05,649
Retained Earnings:
Unreserved 4,022,172 (223,854)
Reserved for Payment of Long-Term Debt 970 00� 3 975 223
...........................1
Total Fund Equity 8,806,030 _ j,5 5 Z..._0 18
Total I iabilities and Fund Equity $ 24.357.121 22.883.203
The accompanying notes are an integral part
of these financial statements.
-3-
MONROE COUNTY FLORIDA
MUNICIPAL SERVICE DISTRICT
STATEMENTS OF' REVENUES., EXPENSES AND CHANGES IN FUND.................... . —EQUITY
FOR THE YEARS ENDED SEPTEMBER 3Q, 1994 AND 1993
1994 19 3
Operating Revenues:
Charges for Services $ 11,245,866 $ 11,600,754
Franchise Fees 3,144,563 3,001,539
Mi scel 1 aneous ............. 326.929. --- 144..685,
Total Operating Revenues 14,717,358, 14.,.746 978
Operating Expenses:
Professional Services 9,274,817 11,160,516
Personal Services 1,235,773 1,054,278
Depreciation and Depletion 1, 166,410 916,076
Operations 932,686 519,647
Landfill Closure Costs 205,500 857,689
Repairs and Maintenance ,4_722 48.259
Total Operating Expenses 1„ ,_839.,_908 ...14 556 46.�
Operating Income _J_1877 450 190.513
Non-Operating Revenues (Expenses) :
Operating Grants 302,969 812,567
Interest Income 598,855 535,181
Interest Expense and Fiscal Charges (739,433) (638,908)
Loss on Disposition of Assets (1.3�0072�) ��6586�)
Total Non-Operating Revenues (Expenses) 32 702 254
,,21 9 ...........
Net Income Before Operating Transfers .1 ,909,769 892,767
Operating Transfers:
Transfers from Other Funds 4,744,004 2,727,395
Transfers to Other Funds J4.183_.690) Cj,63Zj1Z)
Total Operating Transfers 360.,.�314 1409 5 283
.... .........-,
Ne come 2,270,083 1,988,050
Fund Equity, Beginning of Year 6,557,018 4,568,968
Prior Period Adjustment (29,271) -
Contributed Capital 8.,200
Fund Equity, End of Year _88 0 6�O 3 0 L_jjL57.6018
The accompanying notes are an integral part
of these financial statements.
-4-
MONROE COLNTY,FLORIDA
MUNICIPAL SERVICE DISTRICT
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1994 AND 1993
1994 1993
Cash Flows from Operating Activities:
Cash Received for Services $ 14, 187,653 $ 14,745,556
Cash Payments to Suppliers for Goods
and Services (12,499,925) (13,791,307)
Cash Payments to Employees for Services (1,203,940) (1,094,885)
Other Operating Revenue 326.,,929 144.685
Net Cash Provided by Operating Activities 810,717 4,049
Cash Flows from Noncapital Financing
Activities:
Operating Grants Received 280, 107 748,481
Operating Transfers from Other Funds 4,744,004 2,727,395
Operating Transfers to Other Funds (4,383,690) (1,632, 112)
Net Cash Provided by Noncapital
Financing Activities 640_,.421 1,843.764
Cash Flows from Capital and Related Financing
Activities:
Additions to Fixed Assets (180,544) (948, 142)
Principal Paid on Long Term Debt (1,092,010) (813,862)
Interest Paid on Long Term Debt (747.302) 1643.724)
Net Cash Used by Capital and
Related Financing Activities (2,_019,.856) (2,405.728)
Cash Flows from Investing Activities:
Purchases of Investments (29,378,563) (18,079,008)
Proceeds from Sale and Maturities of
Investment Securities 29,286,367 14,981,208
Interest on Investments 569,010 497,.969
Net Cash Provided (Used) by Investing
Activities 476,,814 (2,599.831)
Net Decrease in Cash and Cash Equivalents (91,904) (3,157,746)
Cash and Cash Equivalents, Beginning of Year 6.397.819 9,555,565
Cash and Cash Equivalents, End of Year 6,305,91 6,397, 19
The accompanying notes are an integral part
of these financial statements.
-5-
MONROE COffTY FLORIDA
MUNICIPAL SERVICE DISTRICT
STATEMENTS OF GASH, FLOWS (Continued)
FOR THE YEARS ENDED SEPTFMBER_30,,_1994 AND 1993
Reconciliation Of Operating Income To Net C.4 s.h..
Provided By 0 era�tin( Activities
...........
1994 1993
Operating Income $ 1.877.450 1 190,,513
Adjustments to Reconcile Operating
Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 1,166,410 916,076
Change in Assets and Liabilities:
Decrease (Increase) in:
Accounts Receivable (110,115) 157,414
Due From Other Funds 1,105 (1,105)
Due From Other Governmental Units (83,817)
(Decrease) Increase is
Accounts Payable 1,701,341 (837,888)
Accrued Wages 12,248 (53,948)
Due to Other Funds (62,934) (513,896)
Due to Other Governments 29
Deposits (9,949) (13,075)
Landfill Closure Costs (3,694,598) 148,470
Compensated Absences 19,585 13,341
Due to Customers L6_.009) I1 O2)
Total Adjustments (1,066,733) _____1186,464)
Net Cash Provided by Operating Activities 1_=A�1071�7 L4 049
5Aplemgntal Schedule Of Non-Caishn Financin
..........
Ca p i�I T1—A-n—d Investing_ "' '_" Activities
Contributed Fixed Assets 1 8.100
Loss on Disposition of Fixed Assets $ 1.30.072 S 61586
Capital Lease Purchases S 2.335.830
The accompanying notes are an integral part
of these financial statements.
-6-
MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 AND 1993
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity - The Monroe County, Florida Municipal Service District ("MSD")
is an enterprise fund of Monroe County (the "County") authorized to own and
operate solid waste collection facilities of the County. MSD is considered a
part of the County's primary government as its management is accountable to the
Board of County Commissioners, and it is neither legally separate or fiscally
independent.
Basis of Accounting - The accounting and financial reporting treatment applied
to a fund is determined by its measurement focus. MSD uses a flow of economic
resources measurement focus. With this measurement focus, all assets and all
liabilities associated with operations are included on the balance sheet. Fund
equity (i .e. , net total assets) is segregated into contributed capital and
retained earnings components. Operating statements present increases (e.g. ,
revenue) and decreases (e.g. , expenses) in net total assets.
Basis of accounting refers to when revenues and expenditures or expenses are
recognized in the accounts and reported in the financial statements. Basis of
accounting relates to the timing of the measurements made regardless of the
measurement focus applied.
MSD uses the accrual basis of accounting. Revenues are recognized in the period
in which they are earned and expenses are recognized in the period incurred.
Budgets and Budgetary Data - The following are the statutory procedures followed
by the Board of County Commissioners in establishing the budget for MSD.
1) Within fifteen days after certification of the ad valorem tax roll
by the Property Appraiser, the County Budget Officer submits to the
Board a proposed budget for the fiscal year commencing the following
October 1 . The budget includes proposed expenditures and the means
of financing them.
2) By Board resolution, a tentative budget is submitted to the public.
Public hearings are held to obtain taxpayer comments.
3) Fifteen days after adoption of the tentative budget, a final budget
is submitted for review and adoption at a final public hearing.
4) Prior to, or on September 30, MSD's budget is legally enacted
through passage of a resolution. Accordingly, MSD has an adopted
budget as required by Florida Statute 129.03.
5) During the year, the Office of Management and Budget acts on
intradepartmental budget changes that do not alter the total revenue
or expenditures budgeted to a cost center. A cost center represents
-7-
MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30 1994 AND 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
a particular area of County operations or a department. All other
budget changes (whether they are transfers between cost centers or
alterations of total revenues and expenditures in a fund) are
approved by the Board. Supplemental appropriations were necessary
and the budgetary data presented herein was amended by the Board
during the year in a legally permissible manner.
6) Florida Statute 129, Section 7, as amended in 1978, provides that
only expenditures in excess of total fund budgets are unlawful .
However, because the Board acts on all budget changes between cost
centers, this becomes the level of control .
7) Budgeted to Actual Expenditure reports are employed as a management
control device during the year.
8) Budgets are adopted on a basis consistent with generally accepted
accounting principles (GAAP) , except for expenditures relative to
debt, capital outlay, and landfill closure costs.
9) All appropriations lapse at year end.
Investments - Investments are stated at cost, which approximates market. The
Monroe County Board of County Commissioners pools cash and investments of the
County, excluding those funds held and accounted for by the separate
Constitutional Officers and those requiring or benefiting by separate investment.
This gives the County the ability to maximize its yield on the short-term
investment of cash, increasing its income accordingly.
Interest earned on pooled investments is allocated to the participating funds
based on their average daily balance. Individual fund deficits are ignored in
the allocation of interest.
Property and Depreciation - Property additions are recorded at cost.
Expenditures for maintenance, repairs and minor renewals and betterments are
expensed as incurred. Major renewals and betterments are treated as property
acquisitions. Depreciation and depletion expense is provided using the straight-
line method over the estimated useful lives of the assets as follows:
Description Years
Sanitary Landfill Sites 1 - 10
Buildings and Other Improvements 10 - 40
Machinery and Equipment 3 - 10
-8-
MONROE COQNTY_, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 AND 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Depreciation recognized on assets acquired or constructed through grants
externally restricted for capital acquisitions is recorded as an operating
expense.
Deferred_Char ces - The unamortized issuance costs on Revenue Bonds Payable are
j__
amortized using the straight-line method over the maturity of the bonds.
Compensated Absences - County 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 percentages and maximum hour limitations. The accumulated compensated
absences are accrued when incurred, with the portion to be liquidated with
expendable available resources recorded as a current liability in accordance with
GASB 16.
Cash and Cash Equivalents - For purposes of the statement of cash flows, MSD
considers all highly liquid investments (including restricted assets) with a
maturity of three months or less when purchased to be cash equivalents.
NOTE 2 - CASH AND INVESTMENTS
Cash and investments consist of the following at September 30, 1994:
Unrestricted Restricted
Cash - Demand Deposits $ 318,581 $ 596,384
Investments:
Pooled Cash Program 5,344, 165 -
U.S. Government Securities 4,936,035 1,669,084
Money Market 46,785 -
Municipal Bonds 158,142 -
Total Investments 10,485, 134 1,669,084
Total Cash and Investments $ 10,803,715 $ 2,265 468
-9-
MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 AND 1993
NOTE 2 - CASH AND INVESTMENTS (Continued)
Florida Statute 125.31 authorizes MSD as a County fund to invest surplus funds
in the following:
a) the Local Government Surplus Funds Trust Fund under the management
of the State of Florida Board of Administration
b) the Florida Counties Investment Trust Fund under the sponsorship of
the Florida Association of Counties and the Florida Association of
Court Clerks Comptrollers
C) negotiable direct obligations of, or obligations of which the
principal and interest are unconditionally guaranteed by the U.S.
Government
d) interest bearing time deposits or savings accounts in banks and
savings and loans organized under state laws or doing business in
and situated in the state, provided collateral requirements are met.
e) obligations of the Federal Home Loan Mortgage Corporation
f) obligations of the Federal National Mortgage Association
g) commercial paper of the U.S. corporations having a rating of at
least two of the following three ratings: A-1, P-1 and F-1, as
rated by Standards & Poors, Moody's and Fitch Investors Service
rating services
h) Banker's acceptances that are eligible for purchase by the Federal
Reserve Banks and have a letter of credit rating of AA or better
i ) Tax-exempt obligations of the State of Florida and its various local
governments, including Monroe County. Tax exempt obligations with
a rating of A or less, must be an insured issue through MBIA or an
equivalent company. Issues rated A+ or higher may or may not carry
an insurance backing.
(posits - Demand and time deposits are fully insured by Federal Depository
Insurance and the multiple financial institution collateral pool required by
Sections 280.07 and 280.08, Florida Statutes.
Investments - Investments at year end are shown as follows. The U.S. Treasury
obligations are held by the County's agent in the County's name.
-10-
MONROE COUNTY FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30 1994 AND 193
NOTE 2 - CASH AND INVESTMENTS (Continued)
Carrying Market
Amount Value
Pooled Cash Program 5,344,165 5,344, 165
U.S. Government Securities 6,605,119 6, 7,200
Money Market 46,785 46,785
Municipal Bonds 15 ,19 15 , 17
12,154,218 $ 12.036.297
NOTE 3 - LONG-TERM DEBT
1994 193
Long-term debt consists of the following:
Refunding Improvement Bonds, secured by revenues
of MSD which are obligations solely of MSD,
payable in installments of various amounts from
October 1, 1994 through October 1, 2011, bearing
interest at 5.7% to 6.7 % $ 9, 105,000 $ 9,390,000
Special Obligation Notes Payable, due in monthly
installments of $21,919 to December 2 , 1994,
interest at 8.56% - 244,241
Due to Other Governments, amount payable to Monroe
County Comprehensive Plan Land Authority ( CL ) .
The debt is secured by an interlocal agreement
which grants MCLA a conservation easement over the
related land. The County will repay $ 2, 00
annually, interest free. 444,639 885,029
Accrued compensated absences 16 , 07 11 ,61
Landfill closure costs 66 ,212 4,362,810
Total long-term debt 10,382,38 1 , 7,731
Less current portion 987,796 5,283,598
Net long-term debt 9,39462 ,71 ,133
-11-
MONROE COUNTY FORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30 I994 AND 1993
NOTE 3 - LONG TERM DEBT (Continued)
The total annual debt service funding requirements for all bonds outstanding at
September 30, 1994, consisting of interest payments of $6,005,579 and principal
payments of $8, 05,000 are as follows:
Revenue
Bonds
1995 $ 889,117
1996 891, 162
1997 891,732
1998 890,788
1999 898,288
2000-2004 4,461,30
2005-2009 4,410,412
2010-2011 1,477,700
14, 10,579
The 1991 Municipal Service District Refunding Improvement bonds are payable
solely from and secured by a prior lien upon and pledge of (i ) charges for
service levied annually against residential property within the Monroe County
Municipal Service District (the "District") , Monroe County, Florida for the
availability and furnishing of certain solid waste disposal services, (ii)
payments received from franchise solid waste collectors with respect to
commercial property within the District, (iii) all other non ad valorem funds
received by the District with respect to furnishing services of the solid waste
facilities to the residents of the District excluding any state or federal funds
received from time to time by the District and (iv) certain investment income
received by the District. Under the terms of the enterprise revenue bonds issue,
the Municipal Service District is required, among other things, to establish
rates and to collect fees and charges which will be sufficient at all times to
pay 110% of the Maximum Debt Service Requirement on the Series 1991 Bonds and on
all outstanding Parity Bonds, plus 100% of all reserve or other payments
including the cost of Operation and Maintenance and deposits for Renewal and
Replacements of the Facilities. The Municipal Service District was in compliance
with those covenants for the year ended September 30, 1994. The Bonds and the
interest payable thereon will not constitute a general obligation of the
District, Monroe County, or the State of Florida, or a pledge of the faith and
credit of the District, Monroe County, the State of Florida or any political
subdivision thereof. Neither the Bonds, nor any interest or premium thereon,
shall be payable from the ad valorem tax revenues of the District, Monroe County,
or the State of Florida.
The 199 Special Obligation Notes are payable from and collateralized by (i)
charges for service levied against designated property within Monroe County
benefitted by the County's solid waste disposal system pursuant to Ordinance No.
-12-
MONROE COUNTY. FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 AND 1993
NOTE 3 - LONG TERM DEBT (Continued)
033-1989 (ii) any payments received from franchisee solid waste collectors with
respect to commercial property within Monroe County (iii) all other non ad
valorem funds received by the issuer with respect to the furnishing of solid
waste disposal services to residents of Monroe County, excluding any state or
federal funds received from time to time by the County and (iv) investment
earnings. The pledge of the aforementioned revenues are junior and inferior in
all respects to the lien of the 1991 Municipal Service District Refunding
Improvement Revenue Bonds on such revenues.
NOTE 4 - PRIOR YEAR DEFEASANCE OF DEBT
On December 6, 1985 the County defeased the $8,000,000 Municipal Service District
Improvement Bonds, Series 1980 using proceeds from the $9,211,774 Municipal
Service District Refunding Improvement Bonds, Series 1985. On April 1, 1991 the
County defeased the Municipal Service District Refunding Improvement Bonds,
Series 1985 by using proceeds from the Municipal Service District Refunding
Improvement Bonds, Series 1991 .
The following schedule reflects the outstanding principal on refunded Municipal
Service District Bonds, by issue as of September 30, 1994:
$8,000,000 Municipal Service District Improvement
Bonds, Series 1980 $ 7,060,000
$9,211,774 Municipal Service District Refunding
Improvement Bonds, Series 1985 6,585,865
$ 13,645.865
NOTE 5 - LEASE OBLIGATIONS
Capitalized lease obligations consist of the lease purchase of building
improvements capitalized at $774,310 and equipment capitalized at $1,561,520.
The future minimum payments under the capitalized lease are as follows:
1995 $ 259,200
1996 259,200
1997 259,200
1998 259,200
1999 259,200
Thereafter 1,814,397
Total Payments 3,110,397
Amount Representing Interest 896,946
Present Value of Net Minimum Lease Payments $ 2,213,451
-13-
MONROE COUNTY-, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 AND 1993
NOTE 5 - LEASE OBLIGATIONS (Continued)
Rental expense under cancelable operating leases was $61,244 and $46,913 for 1994
and 1993 respectively.
NOTE 6 - RETIREMENT PLAN
Substantially all full-time MSD employees are participants in the Florida
Retirement System "The System", a multiple-employer, cost-sharing public
retirement system. The System, which is controlled by the State Legislature and
administered by the State of Florida, Department of Administration, Division of
Retirement, covers approximately 553,000 full-time employees of various
governmental units within the State of Florida.
The System provides for vesting of benefits after 10 years of creditable service.
Normal retirement benefits are available to employees who retire at or after age
62 with 10 or more years of service. Early retirement is available after 10
years of service with a 5% reduction of benefits for each year prior to the
normal retirement age. Retirement benefits are based upon age, average
compensation and years-of-service credit where average compensation is computed
as the average of an individual 's five highest years of earnings.
MSD has no responsibility to the System other than to make the periodic payments
required by state statutes. Ten-year historical trend information showing the
System's progress in accumulating sufficient assets to pay benefits when due is
presented in the System's June 30, 1993 Comprehensive Annual Financial Report.
The amount reported below as "pension benefit obligation" is a standardized
disclosure measure of the present value of pension benefits, adjusted for the
effects of projected salary increases estimated to be payable in the future as
a result of employee service to date. The measure is the actuarial present value
of credited projected benefits and is intended to assist users in assessing the
plan's funding status on a going-concern basis, assess progress made in
accumulating sufficient assets to pay benefits when due, and make comparisons
among government pension plans and employers. The System does not conduct
separate measurements of assets and pension benefit obligations for individual
employers. The pension benefits obligation at June 30, 1993 for the System as
a whole, determined through an actuarial valuation performed as of that date, was
$39.7 billion. The System's net assets available for benefits on that date
(valued at market) were $29. 1 billion, resulting in an unfunded pension benefit
obligation of $10.6 billion.
Participating employer contributions are based upon state-wide rates established
by the State of Florida. These rates are applied to employee salaries as
follows: regular employees, 17.10%, special risk employees, 27.03%, and elected
officials, 26.07%. There are no employee contributions to the Plan. MSD's
-14-
MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 AND 1993
NOTE 6 - RETIREMENT PLAN (Continued)
contributions of approximately $202,000 and $178,000 for the years ended
September 30, 1994 and 1993 were made in accordance with contribution
requirements determined by the actuarial valuation of the System as of June 30,
1993. These contributions represented approximately .01% of total contributions
required of all participating employers during the fiscal years of the System
ended June 30, 1994 and 1993.
Total payroll for MSD employees during the fiscal years ended September 30, 1994
and 1993 was approximately $1,237,000 and $1,052,000 respectively, which was
substantially the same as payroll covered by the System. The contribution to the
System for these years was approximately 17. 1% and 16.9% of total covered payroll
for 1994 and 1993 respectively.
There were no changes in actuarial assumptions, benefit provisions, actuarial
funding methods or any other significant factors that affected MSD's contribution
during the fiscal year ended September 30, 1994. Effective January 1, 1994
contribution rates were increased to cover future normal costs and to amortize
the unfunded liability determined as of June 30, 1993.
NOTE 7 - DEFERRED COMPENSATION PLAN
The County offers its employees a deferred compensation plan created in
accordance with Internal Revenue Code Section 457. The plan, available to all
employees, permits them to defer a portion of their salary until future years.
The deferred compensation is not available to employees until termination,
retirement, death, or unforeseeable emergency.
All amounts of compensation deferred under the plan, all property and rights
purchased with those amounts, and all income attributable to those amounts,
property, or rights are (until paid or made available to the employee or other
beneficiary) solely the property and rights of the County (without being
restricted to the provisions of benefits under the plan) , subject only to the
claims of the County's general creditors. Participants' rights under the plan
are equal to those of general creditors of the County in an amount equal to the
fair market value of the deferred account for each participant.
The County has no liability for losses under the plan but does have the duty of
due care that would be required of an ordinary prudent investor. The County
believes that it is unlikely that it will use the assets to satisfy the claims
of general creditors in the future.
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MONROE COUNTY FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30. 1994 AND 1993
NOTE 8 - RECOGNITION OF CLOSURE AND POST CLOSURE COSTS
State and federal laws require final cover and closure as well as post closure
care of the MSD landfills. Recognition of the liability for closure and
postclosure costs is based on the landfill capacity used to date. The landfill
capacity of the MSD landfills is 100% used and has no remaining landfill life.
Closure of the landfills was substantially completed during the year ended
September 30, 1994. Accordingly, no future closure cost liability exists except
for post closure costs estimated to be incurred in the coming year.
The Florida Department of Environmental Protection approved a post closure
operating plan which permits the MSD to fund post closure costs as an operating
expense using annual appropriations. Accordingly, no assets have been restricted
for payment of post closure care costs. Any additional costs due to inflation
or deflation, changes in technology or additional post closure care requirements
will be covered by additional charges to service users.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Grant Programs - MSD participates in a federally assisted grant program. This
program is subject to financial and compliance audits by the grantors or their
representatives. As of March 8, 1995 there were no material questioned or
disallowed costs as a result of grant audits in process or completed.
-16-
KEMP 1�4 GREEN" P.A.
Certified Public Acoounwnts
1438 KemNFDY DRIVE
P. 0. BOX 1529
KEY vveS/' FLORIDA 33041'1529 MEMBER OF wmxso/cAw |wSr|ru/e
vvm. 0. xBmP, C.P.A. (305) 294'2581 AND FLORIDA |wSr|/u/E OF
mAovA E. GREEN' C.P.A. FAX # (305) 294'4778 [Ekr|p|ED PU8i|[ ACCOUNTANTS
prump-r AUQTTQ` REPORT ON THE INTERNAL --kl--OL STRUCTURE AND MANAGEMENT
COMMENTS
Clerk Ex Offici0
Board Of County Commissioners
Monroe County, Florida
We have audited the financial statements of the Monroe County, Florida Municipal
Service District ("MSO") as of and for the year ended September 30, 1994, and
have issued our report thereon dated March 8, 1995'
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditinq Standards. issued by the Comptroller General Of the
Unit 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.
In planning and performing Our audit of the financial Statg0gDt3 of MSD for the
year ended September 30, 1994, we considered its internal control Structure in
order to determine our auditing procedures for the purpose of expressing our
opinion OD the financial statements and not to provide assurance on the iDt8rO6]
control structure.
The management OfMSD is y8SpODSiblS for establishing and maintaining an internal
control structure. In fulfilling this responsibility, estimates and judgements
by management are required to assess the expected benefits and related costs of
internal control Structure policies and procedures. The Ob 'gctiYgS of an
internal control structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from unauthorized
use or disposition, and that transactions are executed in accordance with
0anag80gDt`S authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted accounting principles.
Because Of inherent limitations in any internal control structure, errors or
irregularities may nevertheless occur and not be detected. Also, projection of
any evaluation of the structure to future periods is subject to the risk that
procedures may become inadequate because of changes in conditions or that the
effectiveness of the design and operation Of policies and procedures may
deteriorate.
For the purpose of this report, we have classified the significant internal
control policies and procedures in the following categories:
- Revenues/Cash Receipts
- Expenditures/Cash Disbursements
- External Financial Reporting
- Payroll/Personnel
- Controls Used in Administering Compliance with [8wS and Regulations -
General and Specific
-17-
For all of the control categories listed previously, we obtained an understanding
of the design of relevant policies and procedures and whether they have been
placed in operation, and we assessed control risk.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a reportable condition in which the
design or operation of one or more of the specific internal control structure
elements does not reduce to a relatively low level the risk that errors and
irregularities in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted
no matters involving the internal control structure and its operation that we
consider to be material weaknesses as defined above.
MANAGEMENT COMMENTS
Reported in Prior Year's Report on Internal and
Management Comments, Not Implemented as of
September 30, 1994
During the course of our current examination of the financial statements of MSD,
we noticed appropriate action had been taken upon recommendations and suggested
accounting procedures as outlined in the Management Comments section of the
Report on Internal Accounting Control and Management Comments for the year ended
September 30, 1993.
Current Year Findings
None
OTHER REQUIRED DISCLOSURES
We have reviewed the annual report filed with the Department of Banking and
Finance for Monroe County, Florida pursuant to Section 218.32, Florida Statutes.
This report is in agreement with the annual audit report which incorporates the
financial statements of the Municipal Service District of Monroe County, Florida.
Marva Green was the Auditor in Charge for the audit of the Municipal Service
District of Monroe County, Florida. We attest that the Auditor in Charge met the
educational requirements pursuant to Chapter 11 .45, Florida Statutes.
The Municipal Service District was not in a state of financial emergency as
described in Florida Statutes, Section 218.503(1) .
This report is intended solely for the information of the Board of County
Commissioners, management and officials of applicable federal and state agencies.
This restriction is not intended to limit the distribution of this report, which
is a matter of publicrecord.
Kemp & Green, P.A.
Certified Public Accountants
March 8, 1995
-18-
KEMP U GREEN, P.A.
Certified Public Accountants
1438 KEN NEDY DRIVE
P. O. BOX 1529
KEY WEST, FLORIDA 3304 1-1 529 MEMBER OF AMERICAN INSTITUTE
WM. O. KEMP, C.P.A. (305) 294-2581 AND FLORIDA INSTITUTE OF
MARVA E. GREEN, C.P.A. FAX # (305) 294-4778 CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS
Clerk Ex Officio
Board of County Commissioners
Monroe County, Florida
We have audited the financial statements of Monroe County, Florida Municipal
Service District ("MSD") as of and for the year ended September 30, 1994, and
have issued our report thereon dated March 8, 1995.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing' Standards, issued by the Comptroller General of the
Unit 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.
Compliance with laws, regulations, contracts, and grants applicable to MSD is the
responsibility of the MSD's management. As part of obtaining reasonable assurance
about whether the financial statements are free of material misstatement, we
performed tests of MSD's compliance with certain provisions of laws, regulations,
contracts, and grants. However, the objective of our audit was not to provide
an opinion on overall compliance with such provisions. Accordingly, we do not
express such an opinion.
The results of our tests indicate that, with respect to the items tested, MSD
complied, in all material respects, with the provisions referred to in the
preceding paragraph. With respect to items not tested, nothing came to our
attention that caused us to believe that MSD had not complied, in all material
respects, with those provisions.
This report is intended for the information of the Board of County Commissioners,
management and officials of applicable federal and state agencies. This
restriction is not intended to limit the distribution of this report, which is
a matter of public record.
17 CA
Kemp & Green, P.A.
Certified Public Accountants
March 8, 1995
-19-
KEMP FJ GREEN, P.A.
Certified Public Accountants
1438 KEN NEDY DRIVE
P. O. BOX 1529
KEY WEST, FLORIDA 33041-1529 MEMBER OF AMERICAN INSTITUTE
WM. O. KEMP, C.P.A. (305) 294-2581 AND F-LORIDA INSTITUTE OF
MARVA E GREEN, C.P.A. FAX # (305) 294-4778 CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT ON BOND COMPLIANCE
Clerk Ex Officio
Board of County Commissioners
Monroe County, Florida
We have audited the financial statements of Monroe County, Florida Municipal
Service District as of September 30, 1994 and 1993, and for the years then ended,
listed in the accompanying table of contents. These financial statements are the
responsibility of the County's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and 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
opinion.
In connection with our audit, nothing came to our attention that caused us to
believe that the Monroe County, Florida Municipal Service District was not in
compliance with any of the terms, covenants, provisions, or conditions of Article
5 of Resolution No. 061 which was adopted by the Board of County Commissioners
on March 12, 1991, as amended and supplemented. However, it should be noted that
our audit was not directed primarily toward obtaining knowledge of such
noncompliance.
Kemp & Green, P.A.
Certified Public Accountants
March 8, 1995
-20-
MONROE COUNTY FLORIDA
MUNICIPAL SERVICE DISTRICT
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30 1994
Variance
Favorable
Budget Actual Unfavorable)
Operating Expenditures:
Administration S 748,116 S 715,605 $ 32,511
Hazardous Waste 337,256 322,403 14,853
Franchise Operators 3,959,228 3,944,374 14,854
Indirect Costs 37,814 - 37,814
Cudjoe Key Transfer Station 1,712,289 1,374,841 337,448
Cudjoe Key Landfill 220,326 201,761 18,565
Cudjoe Key Landfill Closure 1,157,992 1,060,213 97,779
Cudjoe Key Post Closure 85,000 68,500 16,500
Long Key Transfer Station 2,239,711 1,690,206 549,505
Long Key Landfill 239,496 227,702 11,794
Long Key Landfill Closure 2,238,738 2,174,565 64,173
Long Key Post Closure 90,000 68,500 21,500
Key Largo Transfer Station 2,919,377 1,808,209 1,111,168
Key Largo Landfill 250,709 195,017 55,692
Key Largo Landfill Closure 1,124,446 621,180 503,266
Key Largo Post Closure 85,000 68,500 16,500
Pollution Control 276,262 33,542 242,720
Recycling 766 745 751,528 15,217
Total Operating Expenditures 18,488,505 15.326.646 3,161,859
Non-Operating Expenditures:
Operating Grants:
Recycling Grant 73,834 66,641 7,193
DER Recycling Grant 132,439 132,439 -
Mosquito Control Fire
Abatement Grant 10,687 8,769 1,918
Litter Grant 3,288 - 3,288
Litter 8 Marine Debris
Prevention Grant 9,582 9,582 -
Debt Service:
Principal Retirement 1,094,120 1,094,120 -
Interest Expenses and Fiscal
Charges 753,580 739,434 14,146
Capital Outlay 1,654,880 226,943 1,427,937
Loss on Disposition of Assets 300,000 �130 072 169,928
Total Non-Operating
Expenditures 4,032,410 2, 008,000 1,624,410
Operating Transfers and Reserves:
Reserve for Contingencies 200,702 200,702
Transfers to Other Funds 4,397,851 4,383,690 14,161
Total Operating Transfers
and Reserves 4 4,383,690 214,_863
Total Expenditures S 27,119,468 S 22,118,336 $ 5,001,132
21-