Fiscal Year 1983 & 1984 NC OE COO NTY,,,-F LOR_I DA
MUNICIPAL SERVICE DISTRICT
FINAW.M.. STA"rEMENTS
SEPTEMBER_30, 1984 AND 198-3
ICE W & ROSASCO
CERTIFIED PUBLIC ACCOUNTANTS
CONTENTS
Pa
Independent Auditors' Opinion 1
Financial Statements:
Balance Sheets 2
Statements of Revenue, Expenses and Fund Equity 3
Statements of Changes in Financial Position 4
Notes to Financial Statements 5-7
Supplemental Schedules:
Restricted Assets 8
Residential Waste Fees Assessed and Uncollected 9
Schedule of Insurance In Force 10
Management Letter 11-13
Bond Compliance Letter 14
KEMP & ROSASCO
Certified Public Accountants
1438 KENNEDY DR.
#12 LUANI PLAZA 9 P. 0. BOX 309
KEY WEST, FL 33041-0309
ORVIS M. KEMP, C.P.A. (305) 294-2581 MEMBER OF AMERICAN INSTITUTE
M. 0. KEMP, C.P.A. AND FLORIDA INSTITUTE OF
PETER L. ROSASCO, Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS
MA VA E. GREEN,' C.P.A.
DEREK PARKER, C.P.A.
Honorable Members of the
Board of County Commissioners
Monroe County, Florida
We have examined the Balance Sheet of the Monroe County, Florida Municipal
Service District as of September 30, 1984 and 1983 and the related State-
ments of Revenues, Expenses, and Fund Equity, and Changes in Financial
Position for the years then ended® Our examination was made in accordance
with generally accepted auditing standards and, accordingly, included such
tests of accounting records and such other auditing procedures as we con-
sidered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the
financial position of the Monroe County, Florida Municipal Service District at
September 30, 1984 and 1983 and the results of its operations and the changes
In financial position for the years then ended in conformity with generally
accepted accounting principles applied on a consistent basis®
Our examination was made for the purpose of forming an opinion on the finan-
cial statements taken as a whole® The supplemental schedules of Restricted
Assets, Residential Waste Fees Assessed and Uncollected, and Insurance in
Force are presented for purposes of additional analysis and are not a required
part of the financial statements® Such information has been subjected to the
auditing procedures applied in the examination of the financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole®
Kemp & Rosasco
Certified Public Accountants
February 14, 1985
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MONROE C0gNTY,_Q0RjDA
MUNICIPAL SERVICE DISTRICT
STATEMENTS OF REVENUESL EXEENSES AND KIM ECHJITY'
9 8 4 A ND 113 83
FOR THE YEARS ENDED SEPT EMBER 3002LAP-M
1984 1983
Operating Revenues:
Special assessments 4,612,666 $ 2,292,622
General taxes 22,532 956,750
Waste collection fees 369,591 256,991
Franchise fees 271,223 248,446
Miscellaneous 630 21,806
Payments from other governments
and excess fees 8151L811 5 900
Total Operating Revenues 5 36u21453 3 ZE2,215,
Operating Expenses:
Professional services 1 ,816,158 1*460,777
Personal services 1,312,740 1,108,175
Depreciation and depletion 725,568 653,825
Operations 778,297 650,810
Repairs and maintenance ......422L212 00�7
......228L26 3�O
Total Operating Expenses 52L!z.27.5 411811654
Operating Income (Loss) 2961678 (399039)
Nonoperating Revenue (Expense) :
Interest Income 466,829 528,735
Loss on disposal of equipment (34,346) -
Interest expense & paying agent fees (8831 (9 468)
Total Nonoperating Revenue (Expense) --2122AID ------(374L733)
Income (Loss) Before Operating Transfers ( 154,200) (773,872)
Operating Transfers (Out) (263,212) (214,998)
Net Income (Loss) (417,739) (988,870)
Fund Equity, October 1 4 271 i 'll 512591981
L
Fund Equity, September 30 3,853,372 S 4,271, 111
The accompanying notes are an Integral
part of these financial statements.
--3-
MONIROE C0U91-Y, F10RIDA
MUNICIPAL SERVICE DISTR&T
STATEMENTS OF CHANGES IN FINANCIAL POSITION
FOR THE YEARS ENDED SEPTEMBER 30, _1984 AID 1983
1984 1983
Sources Of Working Capital :
Operations:
Net income ( loss) $ (417,739) $ (988,870)
Items not requiring working capital :
Depreciation and depletion 725,568 653,825
Amortization of bonds discount 6,778 10,314
Loss on disposal of fixed assets 3411346, -
Working capital provided (used) by
operations 348,953 (324,731)
Decrease In restricted assets 448,451 399,943
Proceeds from long-term note - 114,660
Decrease ( increase) in working cyap Ital -------HAD .......... 653,453
Total Sources of Working Capital 793,907 S 043,325
Uses Of Working Capital :
Decrease in liabilities payable from
restricted assets:
Accrued interest 437,346 $ 2,299
Revenue bonds 45,000 .......42L2Q
Total Decrease In Liabilities
Payable from Restricted Assets 482,346 42,299
Retirement of long-term debt and
portions becoming current 60,372 104,288
Additions to property, plant & equipment 251 696,738
Total Use of Working Capital $ 793,907 $ 843,325
Increase (Decrease) In Components of
Working Capital :
Cash $ (142,472) $ (494,336)
Investments (624,794) (90,679)
Due from other. governments 38,951 -
Accounts receivable 581,017 115,859
Accounts payable V
5,981 (109,833)
Other current liabilities 1444814. ......(744461)
Increase (Decrease) In
Working Capital $ 3,497 $ (653,453)
The accompanying notes are an integral
part of these financial stat onents.
-4-,
MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30L_ 1984 AND 1983
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General - The Monroe County, Florida Municipal Service District (the
"MSD"') is an instrumentality of Monroe County (the "County") authorized to
own and operate solid waste collection facilities of the County.
Basis of Accou�In - The MSD follows the accrual basis of accounting.
Investments - Investments consist primarily of U.S. Treasury obligations,
carried at amortized cost which approximates market value.
Property and depreciation - Property is 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 on property
and sanitary landfill sites using the straight-line method over the esti-
mated useful lives of the assets as follows:
Description Years
Sanitary landfill sites 1 - 10
Buildings and other improvements 10 - 20
Machinery and equipment 3 - 10
The cost and accumulated depreciation of property dispositions are removed
from the accounts with the related gain or loss on disposition reflected
in net income.
Discount on Bonds Payable - The discount on Revenue Bonds Payable is amor-
tized using the straight-line method over the maturity of the bonds.
NOTE 2 - PENSION PLAN
The County participates in the Florida Retirement System (the "System")
which covers substantially all of the County's full-time employees.
Presently, the System does not require contributions from covered
employees. Pension costs for MSD employees for the years ended
September 30, 1984 and 1983 as required and defined by the System,
approximated $ 109,646 and $ 95,662 respectively.
-5-
MnKIDM7 COUKITv FLORIDA
M6NCIPAL SERV' ICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1984 AND 1983
NOTE 2 - PENSION PLAN (Continued)
Contributions of all participating agencies throughout the State of
Florida are pooled to fund accrued benefits under the System. System
officials have reported that the System has an actuarially computed
unfunded past service liability of approximately $6.5 billion as of
July 1 , 1983, the latest valuation date of the plan. This amount repre-
sents an obligation of the System and not of the participating agencies.
The most recent actuarial study indicates that, if certain actuarial
assumptions are realized and certain increases to the contribution rates
are made, this unfunded past service liability will be liquidated within
30 years.
NOTE 3 - LONG-TERM DEBT
Long-term debt consists of the following:
Improvement Bonds, secured by revenues of 1984 1983
MSD which are obligations solely of MSD,
payable in installments of various amounts
each October 1 until 2001 , the remainder
due October 1 , 2011 , bearing interest at
9.80 to 11 .25% $ 7,865,000 $ 7,960,000
Unamortized discount 1762222 999
_1
Net Improvements Bonds 7,688,778 7,777,001
Lease obligations, secured by equipment
with a purchase cost of $ 114,660, pay-
able in monthly installments of $ 5,283,
including interest at 10.75%. 10j567 .....721604
Total long-term debt 7,699,345 7,849,,605
Less current portion 10,567 1072232
Net long-term debt $ 7,688,778 $ 7,742,373
-6-
MONROE CON TY FIORIDA
.L _._
MUNK.. IPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30' 1984 AND 1983
NOTE 3 - LONG-TERM DEBT (Continued)
Long-term debt matures as follows:
September
30
1985 $ 10,567
1986 55,000
1987 65,000
1988 700000
1989 80,000
Thereafter 7 595 000
7,875,567
Less unamortized
discounts 176 222
$ 7,699,345
The improvement bonds are payable from special assessments (residential
waste collection fees) levied annually on residential properties within
the MSD that are furnished solid waste collection services, including
interest on such assessments, payments received from franchise solid waste
collectors with respect to commercial property in the MSD, all other non-
ad valorem funds received by the MSD in connection with furnishing solid
waste disposal services by the MSD, excluding any Federal and State funds
received, and interest earned on funds received from providing such ser-
vices. The improvement bonds are payable solely from the revenues
generated by the MSD and do not constitute a general obligation of the
County®
-7-
M ONROE COUNTY FLORIDA
MUNICIPAL SERVICE DISTRICT
RESTRICTED ASSETS
SEPTEMBER 30,_ 1984 AND 1983
1984 1983
Fund Description:
Sinking Fund:
Cash 7,633 j484L905
Reserve Fund:
Cash 2,472 2,472
Investments 975,035 955,336
Interest Receivable 44,958 ,958
1,022,465 1,002,766
L ==
Renewal and Replacement Fund:
Cash 1 ,745 2,429
Investments 247 403 _237,597
249L148 240.1026
Cash with Fiscal Agent 5,488,693 511�9786�7
Total Restricted Assets $ 6,767,939 $ 6,925,564
MONROi:::d C;OP. NT.,r f P._OR I DA
RV. SJDI...NT_?AY.... WASTE FI...:ES ASSESSED AW``iD UNCOE.._E.._ECTEC".1
SEPTEMBE
84
.: ......_.....::.......
Percentage Of
Year.. Of Total Fees Uncollected A..r Uncollected To
Assessment Assessed OH inal RoH
Less l eserye for 11nco t' a ep ,..,, b°,as
Net Residential Waste
MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
SCHEDULE INSURANCE IN FORCE
SEPTEMBER 30 1.984
Amount
DesSr| fl2 mf Co� 2 s Carrier Po| l P�i� f Coverane
Comprehensive Business Policy The Fidelity and 4/1/83 -
Casualty Company 4/1/85
a° Fire, Windstorm, efz° of New York a° Major equipment-
replacement cost
buildings, personal
property & fanks-
$ 481 *47O
b° Contractor's Equip. b~ $ 557*629
c° Scheduled Property c° Data Processing
Equipmenf-
$ 3G6*O8O
d~ Honesty Blanket Bond d~ $ 50*000
General Liability Constitution State 2/16/84 - $ 500*000 (CSL)
Ins. Company 2/16/85
Auto Liability American Southern 2/16/84 - $ 500*000 (CSL)
Ins. Company 2/16/85
Umbrella Liability Prmfoofivo 2/16/84 - $ 500*000
National Ins. 2/16/85
Public Official International 4/19/83 - $ 1*000,000
Liability Surplus Lines 4/19/85
Worker's Compensation Self-insured Continuing Statutory
and Employer's L/ab°
Worker's Compensation Safety Mutual 10/1/83 - $ 5°OOO*OOO
Specific Excess Casualty Corp. 10/1/84 $ 1 *000*000
Aggregate Excess
-1O-
KEMP 1& ROSASCO
Certified Public Accountants
1438 KENNEDY DR.
#12 LUANI PLAZA 9 P. 0. BOX 309
KEY WEST, FL 33041-0309
ORVIS M. KEMP, C.P.A. (305) 294-2581 MEMBER OF AMERICAN INSTITUTE
M. O. KEMP, C.P.A. AND FLORIDA INSTITUTE OF
PETER L. ROSASCO, Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS
MARVA E GREEN, C.P.A.
DEREK PARKER, C.P.A.
February 14, 1985
Mr. Danny L. Kolhage
Clerk Ex Officio
Board of County Commissioners
Monroe County, Florida
Key West, FLorlda 33040
Dear Sir:
We have examined the financial statements of Monroe County, Florida, Municipal
Service District (MSD) for the years ended September 30, 1984 and 1983, and
have issued our report thereon dated February 14, 1985. As part of our exami-
nation, we made a study and evaluation of the MSD's system of internal
accounting control to the extent we considered necessary to evaluate the
system as required by generally accepted auditing standards. The purpose of
our study and evaluation was to determine the nature, timing, and extent of
the auditing procedures necessary for expressing an opinion of the MSD's
financial statements. Our study and evaluation was more limited than would be
necessary to express an opinion on the system of internal accounting control
taken as a whole.
The observations reported herein should be considered in the context of the
reponsibility of management for establishing and maintaining a system of
internal accounting control, the objectives of and inherent limitations on
such a system, and the definition of a material weakness for purposes of this
report, which are described in the Appendix to this report.
Our study and evaluation made for the limited purpose described in the first
paragraph would not necessarily disclose all material weaknesses in the
system. Accordingly, we do not express an opinion on the system of internal
accounting control of the MSD taken as a whole. However, our study and eva-
luation disclosed no condition that we believe is a material weakness.
Our examination did, however, disclose the following conditions that, although
not considered by us to be material weaknesses, are weaknesses in internal
accounting control for which corrective action might be taken.
_11-
Mr. Danny L. Kolhage
Clerk Ex Officio
Board of County Commissioners
Page 2
Compliance with Bond Covenants
Observation: We reviewed section 15E of Resolution No. 215 - 190 which, as
strictly Interpreted, requires the MSD to make assessments at certain minimum
levels based on, among other things, the cost of operations and maintenance.
However, there appears to be a conflict between Section 15E, Resolution 215 -
1980 and Resolution 78 - 191 which Is an amendment to Resolution 215 - 1980.
Resolution 78 - 1981 allows pledged funds remaining in the Revenue Fund to be
used for any lawful purpose, which includes operations.
Recommendation: The County should obtain an opinion from bond counsel in
order to resolve this apparent inconsistency. We further recommend that you
discuss this matter with the consulting engineers and take appropriate action.
Regulatory Reporting Requirements
We have reviewed the financial report filed with the Department of Banking and
Finance for the year ended September 30, 1984, pursuant to Section 218. 6,
Florida Statutes, and have found the amounts reported therein to be In
agreement with the amounts included in the financial statements on which we
have issued our report dated February 14, 1985.
The Rules of the Auditor General , State of Florida, require that this letter
be filed with the Auditor General along with audited financial statements.
This report is intended solely for the use of management and the Auditor
General and should not be used for any other purpose.
We appreciate the cooperation extended to us during the course of our examina-
tion. We would be pleased to discuss these matters further with you at your
convenience.
Sincerely,
Kemp & eosasco
Certified Public Accountants
-12-
APPENDIX
MANAGEMENT'S RESPONSIBILITY FOR, AND THE OBJECTIVES AND LIMITATIONS OF,
INTERNAL ACCOUNTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS
The following comments concerning management's responsibility for internal
accounting control , the objectives of and the inherent limitations on a system
of internal accounting control, and the definition of a material weakness are
excerpts from Statements on Auditing Standards of the American Institute of
Certified Public Accountants.
Management's Responsibility
Management .. . is responsible for establishing and maintaining a system of
Internal accounting control . In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected benefits and
related costs of control procedures.
Objectives
The objectives of a system 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
management's authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted accounting prin-
ciples.
Limitations
Because of inherent limitations in any system of internal accounting control,
errors or irregularities nevertheless may occur and not be detected. Also,
projection of any evaluation of the system to future periods is subject to the
risk that procedures may become inadequate because of changes in conditions or
that the degree of compliance with procedures may deteriorate.
Material Weakness
A material weakness (for the auditor's purpose) is a condition in which the
specific control procedures, or the degree of compliance with them, do not (in
the auditor's judgement) reduce to a relatively low level the risk that errors
or irregularities in amounts that would be material in relation to the finan-
cial statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned func-
tions. These criteria may be broader than those that may be appropriate for
evaluating weaknesses in accounting control for management or other purposes.
-13-
KEMP & ROSASCO
Certified Public Accountants
1438 KENNEDY DR.
#12 LUANI PLAZA 9 P. 0. BOX 309
KEY WEST, FL 33041-0309
ORVIS M. KEMP, C.P.A. (305) 294-2581 MEMBER OF AMERICAN INSTITUTE
WM. 0. KEMP, C.P.A. AND FLORIDA INSTITUTE OF
PETER L. ROSASCO, Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS
MARVA E. GREEN, C.P.A.
DEREK PARKER, C.P.A.
Honorable Members of the
Board of County Commissioners
Monroe County, Florida
We have examined the Balance Sheet of the Monroe County, Florida Municipal
Service District as of September 30, 1984 and 1983 and the related statements
of Revenues, Expenses, and Fund Equity, and Changes in Financial Position for
the year then ended. Our examination was made in accordance with generally
accepted auditing standards and, accordingly, Included such tests of
accounting records and such other auditing procedures as we considered
necessary in the circumstances.
In connection with our examination, 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 section 15 of Resolution No. 215 which was adopted by the Board on August
26, 1980, as amended and supplemented. However, it should be noted that our
examination was not directed primarily toward obtaining knowledge of such non-
compliance
Kemp & Rosasco
Certified Public Accountants
February 14, 1985