Fiscal Year 1994 & 1995 I
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MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
' FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
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KEMP & GREEN, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
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CONTENTS
Pages
' Independent Auditors' Report 1-2
Financial Statements:
Balance Sheets 3-4
Statements of Revenues, Expenses and Changes in Fund Equity 5
' Statements of Cash Flows 6-7
' Notes to Financial Statements 8-17
Other Reports:
Report on the Internal Control Structure 18-19
Report on Compliance with Laws and Regulations 20
Report on Bond Compliance 21
' Supplemental Schedule:
Schedule of Expenditures - Budget and Actual 22
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KEMP F4 GREEN, P.A.
Certified Public Accountants
1438 KENNEDY DRIVE
P. O. BOX 1529
KEY WEST, FLORIDA 33041.1529 MEMBER OF AMERICAN INSTITUTE
IWM. 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 ("MSD") as of September 30, 1995 and 1994, 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.
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, 1995 and 1994, 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.
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In accordance with Government Auditing Standards, we have also issued a report
dated March 4, 1996 on our consideration of MSD's internal control structure and
a report dated March 4, 1996 on its compliance with laws and regulations.
1 C-,. % PA-
Kemp & Green, P.A.
Certified Public Accountants
March 4, 1996
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MONROE COUNTY. FLORIDA
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MUNICIPAL SERVICE DISTRICT
BALANCE SHEETS
I SEPTEMBER 30, 1995 AND 1994
' ASSETS
I1995 1994
Current Assets:
I Cash and Cash Equivalents $ 4,087,742 $ 5.709,531
Investments at Cost or Amortized Cost 5,384,927 5,094,184
Accounts Receivable - Net of Allowances for
Uncollectible Accounts of $999,559 and
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$1.063.669 for 1995 and 1994 respectively 379,458 540.510
Due From Other Governments 194,135 219,288
Interest Receivable 90,016 67,057
ITotal Current Assets 10,136,278 11,630,570
' Restricted Assets:
Cash and Cash Equivalents 602,095 596,384
Investments at Cost or Amortized Cost 2,167,347 1,669,084 I
Total Restricted Assets 2,769,442 2,265.468
IPlant. Property and Equipment:
Land 4,983,016 4,822,016
I Buildings and Other Improvements 1,205,194 1,041,993
Equipment 14,492,109 14,560,142
Construction in Progress 150,933 67,865
' 20,831,252 20,492,016
Less Accumulated Depreciation and Depletion 10.725,802 10,316,533
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Net Plant, Property and Equipment 10,105,450 10,175,483
IDeferred Charges - Unamortized Debt
Expense, Net 268,717 285,600
ITotal Assets $ 23.279,887 $ 24,357,121
The accompanying notes are an integral part
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of these financial statements.
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MONROE COUNTY, FLORIDA
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MUNICIPAL SERVICE DISTRICT
BALANCE SHEETS (Continued)
' SEPTEMBER 30, 1995 AND 1994
' LIABILITIES AND FUND EQUITY
1995 1994
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Current Liabilities:
Accounts Payable $ 1,379,502 $ 2,286,336
Due to Other Funds 145,080 6,957
I Due to Customers 256,514 260.969
Due to Other Government Units 2,229
Accrued Wages and Benefits Payable 55,540 65,459
Accrued Compensated Absences 1,531 19,584
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Capital Leases Payable 137,941 129,927
Deposits 39,402 40,102
I Total Current Liabilities 2,017,739 2,809,334
Current Liabilities Payable from
I Restricted Assets:
Current Portion of Long-term Debt 315,000 300,000
Accrued Interest 287,058 295,459
Landfill Closure Costs 331,100 668,212
ITotal Accounts Payable from
Restricted Assets 933,158 1,263,671
' Long-term Debt:
Revenue Bonds, Net of Current Portion 8,490,000 8,805,000
Due to Monroe County Land Authority - 444,639 I
Accrued Compensated Absences 164,507 144,923
Capital Leases Payable 1,945.584 2,083,524
' Total Long-term Debt 10,600,091 11,478,086
Total Liabilities 13,550,988 15,551,091
IFund Equity:
Contributed Capital 3,304,568 2,813,849
Retained Earnings:
I Unreserved 3.941,948 4,022.172
Reserved for Revenue Bond Retirement 2.482,383 1,970,009
ITotal Fund Equity 9,728,899 8,806,030
Total Liabilities and Fund Equity $ 23,279,887 $ 24.357,121
The accompanying notes are an integral part
of these financial statements.
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MONROE COUNTY, FLORIDA
IMUNICIPAL SERVICE DISTRICT
STATEMENTS OF REVENUES. EXPENSES AND CHANGES IN FUND EQUITY
I FOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994
1995 1994'
Operating Revenues:
Charges for Services $ 9.915,977 $ 11,245,866
Franchise Fees 2,959,859 3,144,563
IMiscellaneous 480,679 326.929
Total Operating Revenues 13,356.515 14,717,358
' Operating Expenses:
Professional Services 10,253,972 9,274,817
Personal Services 1,669,226 1,235,773
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Depreciation and Depletion 1.038.183 1,166,410
Operations 219,660 932,686
Landfill Closure and Post Closure 225,286 205,500
IRepairs and Maintenance 84,673 24,722
Total Operating Expenses 13,491,000 12,839.908
IOperating Income (Loss) (134,485) 1,877.450
Non-Operating Revenues (Expenses) :
I Operating Grants 245,014 302.969
Interest Income 709,149 598,855
Interest Expense and Fiscal Charges (703,859) (739,433)
' Loss on Disposition of Assets (126,169) (130,072)
Total Non-Operating Revenues (Expenses) 124,135 32,319
' Income (Loss) Before Operating Transfers (10,350) 1,909,769
Operating Transfers:
I Transfers from Other Funds 1.931.618 4,744,004
Transfers to Other Funds (1,489,118) (4.383,690)
ITotal Operating Transfers 442,500 360,314
Net Income 432,150 2,270,083
' Fund Equity, Beginning of Year 8,806,030 6,557,018
Prior Period Adjustment - (29.271)
IContributed Capital 490.719 8,200
I Fund Equity, End of Year $_ 9 728 899 $ 8,806,030
The accompanying notes are an integral part
of these financial statements.
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MONROE COUNTY, FLORIDA'
MUNICIPAL SERVICE DISTRICT
STATEMENTS OF CASH FLOWS
IFOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994
I1995 1994 ._
Cash Flows from Operating Activities:
I Cash Received for Services $ 13,038,486 $ 14,187.653
Cash Payments to Suppliers for Goods
and Services (11,893,779) (12.499,925)
I Cash Payments to Employees for Services (1.677,614) (1,203,940)
Other Operating Revenue 480,679 326,929
Net Cash Provided (Used) by Operating'
Activities (52.228) 810.717
Cash Flows from Noncapital Financing
I Activities:
Operating Grants Received 267,869 280,107
Operating Transfers from Other Funds 1,931,618 4,744,004
tOperating Transfers to Other Funds (1,489,118) (4,383,690)
Net Cash Provided by Noncapital
Financing Activities 710,369 640,421
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Cash Flows from Capital and Related Financing
Activities:
I Acquisition and Construction of Capital Assets (586,717) (180,544)
Principal Paid on Long Term Debt (872,426) (1,092,010)
Interest Paid on Long Term Debt (712,260) (747,302)
I Net Cash Used by Capital and
Related Financing Activities (2,171.403) (2,019.856)
I Cash Flows from Investing Activities:
Purchases of Investments (5,684,412) (29,378,563)
Proceeds from Sale and Maturities of
I Investment Securities 4,895,406 29,286,367
Interest on Investments 686,190 569,010
Net Cash Provided (Used) by Investing I
Activities (102,816) 476,814
Net Decrease in Cash and Cash Equivalents (1,616,078) (91.904)
ICash and Cash Equivalents, Beginning of Year 6,305,915 6,397,819
' Cash and Cash Equivalents, End of Year $ 4,689,837 $ 6,305,915
The accompanying notes are an integral part
of these financial statements.
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MONROE COUNTY, FLORIDA
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MUNICIPAL SERVICE DISTRICT
STATEMENTS OF CASH FLOWS (Continued)
' FOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994
I Reconciliation Of Operating Income To Net Cash
Provided By Operating Activities
I1995 1994
IOperating Income (Loss) $ (134.485) $ 1,877,450
Adjustments to Reconcile Operating
Income to Net Cash Provided (Used)
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by Operating Activities:
Depreciation and Amortization 1,038,183 1,166,410
Change in Assets and Liabilities:
I Decrease (Increase) in:
Accounts Receivable 161,052 (110,115)
Due From Other Funds - 1,105
I Due From Other Governmental Units 2.298 (83.817)
(Decrease) Increase in:
Accounts Payable (906.834) 1.701,341
Accrued Wages and Benefits Payable (9.919) 12,248
I Due to Other Funds 138,123 (62.934)
Due to Other Governments 90 -
Deposits (700) (9,949)
I Landfill Closure Costs (337,112) (3,694,598)
Accrued Compensated Absences 1,531 19,585
Due to Customers (4.455) (6.009)
I Total Adjustments 82,257 (1.066,733)
Net Cash Provided (Used) by Operating
I Activities $ (52,228) $ 810.717
' Supplemental Schedule Of Non-Cash Financing
Capital And Investing Activities
' Contributed Fixed Assets $ 490,719 $ 8.200
Loss on Disposition of Fixed Assets $ 126,169 $ 130,072
' Capital Lease Purchases $ - $ 2,335,830
' The accompanying notes are an integral part
of these financial statements.
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' MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
' SEPTEMBER 30, 1995 AND 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity - The Monroe County, Florida Municipal Service District ("MSD")
1 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.
MSD applies Financial Accounting Standards Boards (FASB) pronouncements and
Accounting Principles Board (APB) opinions issued on or before November 30, 1989,
unless those pronouncements conflict with or contradict GASB pronouncements, in
which case, GASB prevails.
' Basis of Accounting - The accounting and financial reporting treatment applied
t 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
t 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.
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Budgets and Budgetary Data - The following are the statutory procedures followed
tby the Board of County Commissioners in establishing the budget for MSD.
1) Within fifteen days after certification of the ad valorem tax roll
t 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.
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MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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
' 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 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:
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MONROE COUNTY. FLORIDA 1
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
I SEPTEMBER 30. 1995 AND 1994
' NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Description Years
ISanitary Landfill Sites 1 - 10
Buildings and Other Improvements 10 - 40
IMachinery and Equipment 3 - 10
Depreciation recognized on assets acquired or constructed through grants
' externally restricted for capital acquisitions is recorded as an operating
expense.
Deferred Charges - The unamortized issuance costs on Revenue Bonds Payable are
' amortized using the straight-line method over the maturity of the bonds.
Compensated Absences and Prior Period Adiustment - County policy grants employees
I 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
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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
I 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, CASH EQUIVALENTS AND INVESTMENTS
Cash, cash equivalents and investments consist of the following at September 30,
1995:
Unrestricted Restricted
' Cash - Demand Deposits $ 651.427 $ 602.095
Investments:
I Pooled Cash Program 3,436,315 -
U.S. Government Securities 5.384,927 2,167,347
ITotal Investments 8.821,242 2,167,347
Total Cash and Investments $ 9,472,669 $2 769442
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' MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
' SEPTEMBER 30, 1995 AND 1994
NOTE 2 - CASH, CASH EQUIVALENTS 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.
' Deposits - 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.
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MONROE COUNTY, FLORIDA'
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
ISEPTEMBER 30, 1995 AND 1994
' NOTE 2 - CASH, CASH EQUIVALENTS AND INVESTMENTS (Continued)
Carrying Market
IAmount Value
Pooled Cash Program $ 3,436,315 $ 3,346,315
U.S. Government Securities 7,552,274 7,518,779
' $ 10,988,589 $ 10.865,094
NOTE 3 - LONG-TERM DEBT
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1995 1994
ILong-term debt consists of the following:
Refunding Improvement Bonds, secured by revenues
of MSD which are obligations solely of MSD,
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payable in installments of various amounts from
October 1, 1995 through October 1, 2011, bearing
interest at 5.8% to 6.75% $ 8,805.000 $ 9,105,000
Due to Other Governments, amount payable to Monroe
County Comprehensive Plan Land Authority (MCLA) .
The debt is secured by an interlocal agreement
Iwhich grants MCLA a conservation easement over the
related land. The County will repay $442,500
annually, interest free. - 444,639
ICapital Leases Payable 2,083,525 2,213,451
IAccrued compensated absences 166,038 164,507
Landfill closure costs 331,100 668,212
ITotal long-term debt 11,385,663 12,595,809
Less current portion 785.572 1,117,723
INet long-term debt $ 10,600,091 $11 478 086
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MONROE COUNTY, FLORIDA
' MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
ISEPTEMBER 30. 1995 AND 1994
' NOTE 3 - LONG TERM DEBT (Continued)
The total annual debt service funding requirements for all bonds outstanding at
I September 30, 1995, consisting of interest payments of $5,431,462 and principal
payments of $8,490,000 are as follows:
' Revenue
Bonds
I 1996 $ 891.162
1997 891,732
1998 890,78E
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1999 2000 898,288
893,380
2001-2005 4,459,175
2006-2010 4,249,687
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2011 747,250
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$13,921,462
I 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
IMunicipal 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
I 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
I 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
I 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
I with those covenants for the year ended September 30, 1995. 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
I 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.
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MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
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, 1995:
' $8,000.000 Municipal Service District Improvement
Bonds. Series 1980 $ 6,915,000
$9,211,774 Municipal Service District Refunding
Improvement Bonds, Series 1985 6,380,486
$ 13 295,486
NOTE 5 - LEASE OBLIGATIONS
1 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:
' 1996 $ 259,200
1997 259,200
1998 259,200
1999 259,200
' 2000 259,200
Thereafter 1,555,197
' Total Payments 2,851,197
Amount Representing Interest 767,672
Present Value of Net Minimum Lease Payments $ 2.083.525
Rental expense under cancelable operating leases was $16.544 and $61.244 for 1995
and 1994 respectively.
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MONROE COUNTY, FLORIDA
1 MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
1 NOTE 6 - RETIREMENT PLAN
Substantially all full -time MSD employees are participants in the Florida
1 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 573,000 full -time employees of various
governmental units within the State of Florida.
1 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
1 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
1 presented in the System's June 30, 1995 Comprehensive Annual Financial Report.
The amount reported below as "pension benefit obligation" is a standardized
1 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 1
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
1 separate measurements of assets and pension benefit obligations for individual
employers. The pension benefits obligation at June 30, 1995 for the System as
a whole, determined through an actuarial valuation performed as of that date, was
1 $47.3 billion. The System's net assets available for benefits on that date
(valued at amortized cost) were $41.6 billion, resulting in an unfunded pension
benefit obligation of $5.7 billion.
1 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, 16.91%, special risk employees, 26.83%, and elected
1 officials, 27.48%. There are no employee contributions to the Plan. MSD's
contributions of approximately $211,000 and $202,000 for the years ended
September 30, 1995 and 1994 were made in accordance with contribution
1 requirements determined by the actuarial valuation of the System as of June 30,
1995. These contributions represented approximately .01% of total contributions
required of all participating employers during the fiscal years of the System
ended June 30, 1995 and 1994.
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MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
NOTE 6 - RETIREMENT PLAN (Continued)
Total payroll for MSD employees during the fiscal years ended September 30, 1995
' and 1994 was approximately $1,203,000 and $1,237,000 respectively, which was
substantially the same as payroll covered by the System. The contribution to the
System for these years was approximately 17.5% and 17.1% of total covered payroll
1 for 1995 and 1994 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, 1995.
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.
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.
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MONROE COUNTY, FLORIDA
MUNICIPAL SERVICE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
NOTE 8 - RECOGNITION OF CLOSURE AND POST CLOSURE COSTS (Continued)
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 grant programs. These programs are subject
to financial and compliance audits by the grantors or their representatives. As
of March 4, 1996 there were no material questioned or disallowed costs as a
result of grant audits in process or completed.
NOTE 10 - RISK MANAGEMENT
MSD 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. During the fiscal years ended 1976, 1984 and 1988, the County
established the Worker's Compensation, Group Insurance, and Risk Management
' Funds, respectively, as internal service funds to account for and finance its
uninsured risks of loss. Under these programs, the Worker's Compensation
provides $450,000 coverage per claim for regular employees and $500,000 coverage
per claim for police and firemen. The Group Insurance Fund provides coverage up
' to $75,000 for each medical claim. Risk Management provides $100,000 for each
general liability claim and $25,000 for most property damage claims. Windstorm,
Flood and Property Damage insurance excess coverage varies by individual
' property. The 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.
MSD participates in the programs and makes payments to the Worker's Compensation,
Group Insurance and Risk Management Funds based on estimates of the amounts
needed to pay prior and current year claims.
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KEMP Li GREEN, P.A.
I Certified Public Accountants
1438 KENNEDY DRIVE
P. O. BOX 1529
KEY WEST, RORIDA 33041-1529 MEMBER OF AMERICAN INSTITUTE
IWM. 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 THE INTERNAL CONTROL STRUCTURE
Clerk Ex Officio
I Board of County Commissioners
Monroe County, Florida
We have audited the financial statements of the Monroe County, Florida Municipal
I Service District ("MSD") as of and for the year ended September 30, 1995, and
have issued our report thereon dated March 4, 1996.
I 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
I obtain reasonable assurance about whether the financial statements are free of
material misstatement.
The management of MSD is responsible for establishing and maintaining an internal
I 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 objectives of an
I 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
I management'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
I
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
1 deteriorate.
In planning and performing our audit of the financial statements of MSD for the
I year ended September 30, 1995, we obtained an understanding of the internal
control structure. With respect to the internal control structure, 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 in order to
I determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and not to provide an opinion on the internal control
structure. Accordingly, we do not express such an opinion.
1 Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be reportable
conditions and, accordingly, would not necessarily disclose all reportable
I conditions that are also considered to be material weaknesses. A material
weakness is a reportable condition in which the design or operation of one or
w
more of the specific internal control structure elements does not reduce to a
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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
1 control structure and its operation that we consider to be material weaknesses
as defined above.
We also noted other matters involving the internal control structure and its
operation that we have reported to the management of the County in a separate
letter dated March 4, 1996.
This report is intended for the information of the Board of County Commissioners,
management and others within the County, and officials of applicable federal and
state agencies. However, this report is a matter of public record and its
' distribution is not limited.
' Kemp & Green, P.A.
Certified Public Accountants
' March 4, 1996
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E
KEMP E3 GREEN, P.A.
Certified Public Accountants
1438 KENNEDY DRIVE
P. O. BOX 1529
KEY WEST, FLORIDA 33041-1529 MEMBER OF AMERICAN INSTITUTE
1 WM. O. KEMP, C.P.A. (305) 294-2581 AND FLORIDA INSTITUTE OF
MARVA E. GREEN, CPA. 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, 1995, and
have issued our report thereon dated March 4, 1996.
' 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.
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 disclose no instances of noncompliance that are required
to be reported herein under Government Auditing Standards.
This report is intended for the information of the Board of County Commissioners,
management and others within the County, and applicable federal and state
agencies. However, this report is a matter of public record and its distribution
is not limited.
Kemp & Green, P.A.
Certified Public Accountants
March 4, 1996
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Q
KEMP f4 GREEN, P.A.
L Certifled Public Accountants
143E KENNEDY DRIVE
P. O. BOX 1529
KEY WEST, FLORIDA 33041-1 5 2 9 MEMBER OF AMERICAN INSTITUTE
IWM. 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
I
INDEPENDENT AUDITORS' REPORT ON BOND COMPLIANCE
I
Clerk Ex Officio
Board of County Commissioners
IMonroe County, Florida
I We have audited the financial statements of Monroe County, Florida Municipal
Service District as of September 30, 1995 and 1994, and for the years then ended,
listed in the accompanying table of contents. These financial statements are the
I 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
I 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
I 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
I made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
I 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
I 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.
I
Kemp & Green, P.A.
ICertified Public Accountants
March 4, 1996
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MONROE COUNTY, FLORIDA
II MUNICIPAL SERVICE DISTRICT
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30. 1995
i
i Variance
Favorable
Budget Actual (Unfavorable)
I Operating Expenditures:
Administration $ 403,624 $ 353,988 $ 49,636
Hazardous Waste 220,250 180,437 39,813
Recycling 425,308 394,469 30,839
i Franchise Operators 4,245,952 4,244,364 1,588
Cudjoe Key Transfer Station 1,562,690 1,556,910 5,780
Cudjoe Key Landfill 224,951 216,013 8,938
Cudjoe Key Landfill Closure 14,694 14,293 401
Cudjoe Key Post Closure 122,012 44,693 77,319
I Long Key Transfer Station 894,216 657,965 36,251
Long Key Landfill 254,021 223,014 31,007
Long Key Post Closure 135,912 100,388 35,524
Key Largo Transfer Station 1,873,531 1,762,216 111,315
Key Largo Landfill 189,823 139,926 49,897
' Key Largo landfill Closure 431,388 431,372 16
Key Largo Post Closure 129,211 44,540 84,671
Pollution Control 366,747 289,002 ]],]45
Recycling 1,134,772 853,584 281,188
Renewal and Replacement 253,159 - 253,159 I
Total Operating Expenditures 13.882.261 12,707,174 1,175,087
' Non-Operating Expenditures:
Operating Grants:
Recycling Grant 54,451 54,451 -
DER Recycling Grant 89,470 89,470 -
1 Litter & Marine Debris
Prevention Grant 20,909 20,909
Debt Service:
Principal Retirement 1,187,427 872,427 315,000
Interest Expenses and Fiscal
I Charges 007,523 703,859 303,664
Capital Outlay 950,887 594,411 356,476
loss on Disposition of Assets 134.908 126.169 8,739
I Total Non-Operating
Expenditures 3,445,575 2,461,696 983,879
II -
Operating Transfers and Reserves:
Reserve for Contingencies 631,439631,439
Transfers to Other Funds 2.214,500 1,489,117 725,383
1 Total Operating Transfers
and Reserves 2.845,939 1,489,117 1.356,822
Total Expenditures $ 20.173.775 $ 16.657.987 $ 3.515.788
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