CITY OF ST. CLOUD, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT

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1 CITY OF ST. CLOUD, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2015 Celebrating Small Tm\ n Life

2 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF ST. CLOUD, FLORIDA FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 INTRODUCTORY SECTION PREPARED BY THE DEPARTMENT OF FINANCE CRAIG A. CHARRETTE, Finance Director STAFF: Edgardo-Rivera-Calderon, CGFM Gloria R. Emanuel, CGFO Donna L. Cooley, CGFO Dawn M. Murray Leslie M. Messina

3 CITY OF ST. CLOUD, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS I. INTRODUCTORY SECTION Table of Contents... i-iii Listing of City Officials... iv Letter of Transmittal... v-viii Organization Chart... ix Certificate of Achievement for Excellence in Financial Reporting... x II. FINANCIAL SECTION Independent Auditors' Report Management s Discussion and Analysis Basic Financial Statements Statement of Net Position Statement of Activities Balance Sheet - All Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Net Position - Fiduciary Funds Statement of Changes in Net Position - Fiduciary Funds Notes to Financial Statements Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance, Budget and Actual - General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance, Budget and Actual One Percent Surcharge Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance, Budget and Actual - OUC Interlocal Agreement Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance, Budget and Actual - Community Redevelopment Agency Schedule of Changes in the Employers Net Pension - Liability and Related Ratios - General Employees Retirement Plan Schedule of Changes in the Employers Net Pension - Liability and Related Ratios - Police Officers and Firefighters Retirement Plan i

4 CITY OF ST. CLOUD, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS (Continued) II. FINANCIAL SECTION (Concluded) Required Supplementary Information (Concluded) Schedule of Employer Contributions General Employees Retirement Plan Schedule of Employer Contributions Police Officers and Firefighters Retirement Plan Schedules of Investment Returns - General Employees Retirement Plan Schedules of Investment Returns - Police Officers and Firefighters Retirement Plain Other Postemployment Benefits Plan - Schedule of Funding Progress Other Postemployment Benefits Plan - Schedule of Employer Contributions Supplemental Information Schedule of Revenues, Expenditures, and Changes in Fund Balance, - Budget and Actual - Debt Service Fund Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Schedule of Revenues and Expenditures - Budget and Actual: Economic Development Fund County Gas Tax Fund Road Impact Fees Fund Parks and Recreation Impact Fees Fund Police and Fire Impact Fees Fund Capital Project Fund Combining Statement of Net Position - Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Fund Net Position - Internal Service Funds Combining Statement of Cash Flows - Internal Service Funds III. STATISTICAL SECTION (UNAUDITED) Net Position by Component Changes in Net Position Fund Balances - Governmental Funds Changes in Fund Balances - Governmental Funds Sanitation Revenue Indicators ii

5 CITY OF ST. CLOUD, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS (Concluded) III. STATISTICAL SECTION (UNAUDITED) (Concluded) Assessed Value and Actual Value of Taxable Property Direct and Overlapping Property Tax Rates Principal Property Taxpayers Property Tax Levies and Collections Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping - Governmental Activities Debt Pledged-Revenue Coverage - Governmental-Type Activities: One Percent Surcharge Revenue Notes Gas Tax Revenue Bonds Electric Utility Revenue Bonds Utility Tax Revenue Bonds Traffic Impact Fee Revenues Pledged-Revenue Coverage - Business-Type Activities: Water Utility Revenue Bonds Sewer Utility Revenue Bonds Demographic and Economic Statistics Principal Employers Full-Time Equivalent City Government Employees by Function/Program Operating Indicators by Function/Program Capital Assets Statistics by Function/Program Commercial Construction Value and Residential Construction Value Insurance Coverage Tourist Statistical Data for Osceola County Miscellaneous Statistical Data IV. COMPLIANCE SECTION Schedule of Expenditures of Federal Awards Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors Report on Compliance for Each Major Program and on Internal Control Over Compliance in Accordance with the Office of Management and Budget (OMB) Circular A Schedule of Findings and Questioned Costs Federal Award Programs Independent Accountants Report on Compliance with Section , Florida Statutes Management Letter Management Letter Comments Management s Response Letter iii

6 COMPREHENSIVE ANNUAL FINANCIAL REPORT LISTING OF CITY OFFICIALS YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA ELECTED AND APPOINTED OFFICIALS Mayor Rebecca Borders Deputy Mayor Jeff Rinehart Council Member Russell Holmes Council Member David Askew Council Member Donald Shroyer Acting City Manager Dennis Ragsdale DEPARTMENTAL OFFICIALS Director of Finance Craig A. Charrette City Clerk Linda P. Jaworski Fire Chief William Sturgeon Director of Building Codes and Licensing David Young Information Technology Director Howard De Young Director of Human Resources Harvey Bisson Chief of Police Peter Gauntlett Director of Parks and Recreation Stephanie Holtkamp Acting Growth Management Services Administrator Jennifer Giannuzzi Public Services Administrator Veronica Miller iv

7 May 20, 2016 To the Honorable Mayor and Members of the City Council, and Citizens City of St. Cloud, Florida 1300 Ninth Street St. Cloud, FL It is my pleasure to present the Comprehensive Annual Financial Report (CA.FR) for the fiscal year ended September 30, State law, in accordance with the Florida Statutes ; Chapter , Rules of the Auditor General, and Section 3.12 of the City Charter, requires that every general-purpose local government publish within six months of the close of each fiscal year a complete set of audited financial statements. The CAFR is presented in four sections. The introductory section includes this Transmittal Letter and an organizational chart for the city. The financial section includes the Independent Auditor's Report, Management's Discussion and Analysis (MD&A), audited city wide and fund financial statements and notes thereto, and required supplementary information. The Statistical Section sets forth the selected unaudited economic, financial trend, and demographic information for the City of St Cloud on a multi-year basis. The compliance section includes other information and reports required by Florida Statutes and OMB Circular A-133. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls that it has established for that pwpose, because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable (rather than absolute) assurance that the financial statements are free of any material misstatements. Purvis Gray and Company, LLP has issued an unqualified ("clean") opinion on the City of St. Cloud's financial statements for the fiscal year ended September 30, GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, requires that management provide a narrative introduction, overview and analysis to accompany the basic firiancial statements in the form of MD&A. This letter of transmittal is designed to complement the MD&A and should be read in conjunction. Prof de of the Government The City of St. Cloud, incorporated in 1911, is located in the southeastern central part of Central Florida, which is considered to be one of the top growth areas in both the state and th.e country. The City currently occupies square miles and serves a population of 41,316 (based on 2015 estimates by the Bureau of Economic & Business Research at the University of Florida). The City of St. Cloud is empowered to levy a property tax on both real and personal property located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which it has done from time to time. v

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11 2014/2015 BUDGET ORGANIZATIONAL CHART * *Supervisory only/budget remains in Fund 420 ix

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13 FINANCIAL SECTION This section Contains the Following Subsections: REPORT OF INDEPENDENT AUDITORS MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS NOTES TO FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION SUPPLEMENTAL INFORMATION FINANCIAL SECTION

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15 INDEPENDENT AUDITORS' REPORT The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of St. Cloud, Florida (the City) as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 1

16 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida INDEPENDENT AUDITORS' REPORT (Continued) Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City as of September 30, 2015, and the respective changes in financial position, and, where applicable, cash flows, thereof for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter - GASB 68 As discussed in Note 1 to the financial statements, in 2015, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis, major fund budgetary comparison schedules, the Schedules of Funding Progress and Contributions for Other Post-Employment Benefits and Pension Plans, Schedules of Changes in the Employer s Net Position Liability and Related Ratios, Schedules of Employer Contributions, and Schedule of Investment Returns as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The major fund budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information, has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the major fund budgetary comparison schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. 2

17 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida Other Matters (Concluded) INDEPENDENT AUDITORS' REPORT (Concluded) Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and is also not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules, and the schedule of expenditures of federal awards are the responsibility of management, were derived from, and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements, budgetary comparison schedules, and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 20, 2016, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City s internal control over financial reporting and compliance. May 20, 2016 Ocala, Florida 3

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19 MANAGEMENT S DISCUSSION AND ANALYSIS This section in the Comprehensive Annual Financial Report has been developed in accordance with the Governmental Accounting Standards Board (GASB) Statement No. 34 (GASB 34). It is intended to provide the readers of this report with a general overview and analysis of the financial activities of the City of St. Cloud for the fiscal year ended September 30, Management s Discussion and Analysis (MD&A) is designed to focus on the current year activities, resulting changes, and currently known facts. Please read it in conjunction with additional information in the Transmittal Letter, the financial statements, and notes to the financial statements. Financial Highlights The City is in good financial condition. For the year ended September 30, 2015: The City s total assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $267.5 million (net position). Of this amount, $106.5 million was from governmental activities and $161.0 million was from business-type activities. Unrestricted net positions for governmental and business activities respectively were $0.6 million and $1.7 million (deficit). The decrease in governmental unrestricted net position is attributable primarily to the implementation of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions an Amendment of GASB Statement No. 27 (GASB 68), which required recognition of a net pension liability of $8.8 million for governmental activities as of the year ended September 30, The implementation of GASB 68 also resulted in recognition of a net pension liability of $0.2 million for business-type activities, for a total net pension liability of $9.0 million for the City of St. Cloud. The City s revenues for governmental funds, excluding transfers, were $36.4 million. The expenditures for governmental funds were $39.3 million. The business-type activities of the City had total operating revenues of $31.8 million and total expenses of $31.7 million before transfers. At the close of the current fiscal year, the governmental funds reported combined ending fund balances of $34.2 million, a decrease of $0.6 million in comparison with the prior year. Approximately $2.9 million or 8.5% of this total amount is available for spending at the government s discretion (unassigned fund balance). The City s long-term debt decreased by $5.5 million. Business-type activities long-term debt decreased by $3.2 million. Long-term liabilities for governmental activities decreased by $2.3 million. 4

20 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Overview of the Financial Statements The Introductory Section of the report includes the letter of transmittal, a list of City officials, an organizational chart, and a copy of last year s Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting. The Financial Section of the report includes the Report of Independent Auditors, this MD&A, the basic financial statements, required supplementary information, and combining and individual fund statements and schedules. The MD&A is prepared by management and is intended to serve as an introduction to the basic financial statements. It is written to provide an objective and easily readable analysis of the City s financial activities and a summary of basic financial information for the City. The Basic Financial Statements include: Government-wide Financial Statements Fund Financial Statements Notes to the Financial Statements In addition to the Basic Financial Statements, the Financial Section also includes the following sections: Required Supplementary Information Combining and Individual Fund Statements and Schedules (see Supplemental Information Tab) After the Financial Section, other information about the City and its physical and financial environment is available in the Statistical and Compliance Sections. Government-wide Financial Statements The government-wide financial statements are the statement of net position and the statement of activities. This summary information is designed to provide a broad overview of the City as a whole that is similar to private sector financial statements. The government-wide financial statements categorize the City s financial information as governmental or business-type, and the emphasis is on the change in net position. Governmental activities are primarily supported by property taxes, sales and other taxes, federal and state grants, transfers from the proprietary funds, and state shared revenues. Business-type activities are supported by charges to the users of services. Charges and fees are intended to recover all or a significant portion of costs. The statement of net position shows the total assets, deferred outflow of resources, liabilities, and deferred inflows of resources for the City. Net position is sub-divided into three categories: Net investment in capital assets Restricted Unrestricted The statement of activities presents information on all revenues and expenses of the City and the change in net position. Revenues and expenses are reported by major function and program. Governmental activities financed by the City include public safety, physical environment, transportation, culture and recreation, and general government services. Business-type activities financed by user fees and charges include Water & Sewer, Stormwater, and Sanitation. 5

21 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Fund Financial Statements The fund financial statements follow the government-wide financial statements, and are expanded under the GASB 34 reporting model. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The City categorizes funds into three basic fund types: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds Governmental Funds are used to account for essentially the same functions reported as governmental activities in the government-wide statements. However, unlike the government-wide statements, governmental fund related statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. This information may be useful in evaluating a government s near-term financing requirements. Because the focus of the governmental funds is narrower than that of the government-wide financial statements, it may be useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This comparison highlights the long-term impact of the City s near term financial decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances offer a reconciliation to assist with this comparison. The City maintains eleven individual governmental funds. The general fund is the only major fund in this group. All other governmental funds have been combined into a single, aggregated presentation as non-major funds. Data for each individual non-major governmental fund is provided via the combining statements elsewhere in this report. Proprietary Funds The City s Proprietary Funds fall into two categories - Enterprise Funds and Internal Service Funds. The proprietary fund financial statements provide separate information for the City s individual enterprise funds since they are considered to be major funds. None of the internal service funds are major funds; so data for internal service funds are aggregated in a separate column. Also, because the internal service funds represent activities that predominately satisfy internal governmental needs, balance sheet and other data are included as governmental activities, not business-type activities, in the government-wide financial statements. The City s Enterprise Funds are the basis for the business-type activities information in the governmentwide financial statements. The proprietary fund statements provide more detail about individual enterprise fund operations. The City uses enterprise funds to account for its Water & Sewer, Stormwater, and Sanitation operations. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among some of the City s various functions. Included in the internal service fund group is the City s Self Insurance Fund. Individual fund data for the internal services funds is provided in the form of combining statements elsewhere in this report, and is included in the governmental rather than business-type activities category in the government-wide financial statements. Fiduciary Funds Fiduciary Funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because resources of those funds are not available to support the City s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City has two pension trust funds to account for the General Employee Retirement System and the Police Officers and Firefighters Retirement System. The basic fiduciary fund financial statements can be found after the basic proprietary fund financial statements. 6

22 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Notes to Financial Statements The notes provide additional information that is essential to a complete understanding of the data provided in both the government-wide and fund financial statements. The notes to the financial statements are the last section of the Basic Financial Statements and follow the fiduciary fund financial statements. Other Information Required Supplementary Information (RSI) is the next section in this report. In the City s case, RSI schedules show the changes in net position and employer contributions for the City s employee pension funds and a schedule of funding progress for Other Post-Employment Benefits (OPEB). The Combining and Individual Fund Statements and Schedules section includes combining and individual fund statements for non-major and other funds, and various other statements and schedules of interest to the reader. The Statistical Section presents information designed to give users a better historical perspective and to assist readers in assessing current financial status and trends of the governmental unit. Economic information is presented to allow a broader understanding of the financial and social environment in which the City government operates. The Compliance Section contains various reports and schedules with information about the City s internal control, federal and state grants, and any additional comments from the auditors. Government-Wide Financial Analysis The Statement of Net Position and the concept of net position are useful indicators of a governmental entity s financial health and stability. In the case of the City, total assets (current and capital) plus deferred outflows of resources exceed total liabilities (current and long-term) and deferred inflows of resources by $267.5 million. Furthermore, the City has combined positive balances in all but one of the categories of net position (business-type activities unrestricted net position has a deficit of $1.7 million) net investment in capital assets, restricted, and unrestricted. The City s combined net position decreased by $0.9 million from the amounts previously reported at the end of fiscal year Governmental activities are responsible for a decrease of $7.2 million, while the business-type activities are responsible for an increase of $6.3 million. In Governmental Activities Funds, the primary reason for the decrease is the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions an Amendment of GASB Statement No. 27, which requires local governments to recognize as a liability, beginning October 1, 2014, the long-term obligation associated with pension benefits. As a result, the governmental activities reported a net pension liability of $8.8 million and the business-type activities reported a net pension liability of $0.2 million for fiscal year ended September 30, For additional information regarding this change in accounting standards see Note 1 in the Notes to Financial Statements section of this report. The following schedule provides a comparative summary of net position for the City for fiscal years 2014 and For more detail see the Statement of Net Position in the Financial Section of this report immediately following this MD&A. 7

23 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Government-Wide Financial Analysis (Continued) City of St. Cloud's Net Position Governmental Business-type Total Activities Activities Current and Other Assets 36,592,305 36,055,666 29,101,974 26,300,060 65,694,279 62,355,726 Capital Assets 136,316, ,445, ,283, ,476, ,600, ,922,763 Unamortized Bond Insurance Cost 370, , , ,171 Deferred Outflows 299,723 3,939, , ,723 4,901,887 Total Assets and Deferrals 173,579, ,766, ,385, ,739, ,965, ,505,547 Long Term Liabilities 56,820,604 54,521,890 66,711,831 63,584, ,532, ,106,769 Other liabilities 2,993,657 12,490,276 5,003,000 10,029,129 7,996,657 22,519,405 Deferred Inflows 0 219,796 46, ,982 46, ,778 Total Liabilities 59,814,261 67,231,962 71,761,066 73,783, ,575, ,015,952 Net Position: Net Investment in Capital Assets 85,331,016 84,202, ,169, ,857, ,500, ,060,560 Restricted 21,461,732 21,727,219 7,952,299 10,834,748 29,414,031 32,561,967 Unrestricted 6,972, ,507 5,502,670 (1,737,439) 12,475,270 (1,132,932) Total Net Position $ 113,765,348 $ 106,534,397 $ 154,624,745 $ 160,955,198 $ 268,390,093 $ 267,489,595 By far the largest portion of the City s net position is investment in capital assets (less any related outstanding debt used to acquire those assets). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate debt. The City s net position is also grouped as restricted and unrestricted. Restricted net position is subject to restrictions on how they may be used. Unrestricted net position may be used to meet the government s ongoing obligations to citizens and creditors. The Statement of Activities reconciles and links net position to the sources of changes in net position. Program revenues and expenses are presented by function and with their positive or negative effect on net position. General revenues and transfers, and their effect on net position, are shown separately. The Statement of Activities combines the effects of all revenues, expenses, and transfers to calculate the net position by governmental activities, business-type activities, and in total. The schedule below provides a comparative summary of activities and the changes in net position for the City for the fiscal years ended September 30, 2014 and

24 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Government-Wide Financial Analysis (Concluded) City of St. Cloud's Changes in Net Position (in 000's) Governmental Business-type Total Total Activities Activities Change Change Revenues: Program revenue: Charges for Services $ 13,385 $ 10,932 (2,453) $ 29,037 $ 31,788 2,751 $ 42,422 $ 42,720 Operating Grants and Contributions 930 1, (17) 958 1,787 Capital Grants and Contributions 5,295 3,782 (1,513) 7,856 9,861 2,005 13,151 13,643 General Revenues: Property Taxes 5,979 6, ,979 6,524 Other Taxes 13,024 13, ,024 13,282 Other Revenues 1,390 1, ,457 1,693 Total Revenues 40,003 37,702 (2,301) 36,988 41,947 4,959 76,991 79,649 Expenses: General Government 6,700 5,957 (743) 6,700 5,957 Public Safety 18,302 19,761 1,459 18,302 19,761 Transportation 6,906 6, ,906 6,956 Parks and Recreation 4,006 4, ,006 4,391 Other Operating 1, (632) 1, Electric System (1) Interest and Fees 3,266 2,656 (610) 3,266 2,656 Water Utility 9,117 10,453 1,336 9,117 10,453 Sewer Utility 10,584 10,417 (167) 10,584 10,417 Sanitation Utility 8,646 9, ,646 9,163 Stormwater Utility 1,543 1,513 (30) 1,543 1,513 Special District 2,818 1,868 (950) 2,818 1,868 Total Expenses 41,150 41,058 (92) 32,708 33, ,858 74,472 Increase in Net Assets Before Transfers (1,147) (3,356) (2,209) 4,280 8,533 4,253 3,133 5,177 Transfers 1,660 2, (1,660) (2,641) (981) 0 0 Changes in Net Assets 513 (715) (1,228) 2,620 5,892 3,272 3,133 5,177 Net Position - Beginning 113, , , , , ,390 Adjustment to Beginning Net Position 0 (6,516) (6,078) Net Position - Beginning 113, , , , , ,312 Net Position - Ending $ 113,765 $ 106,534 (7,231) $ 154,625 $ 160,955 6,330 $ 268,390 $ 267,489 Governmental Activities Net position of the City s governmental-type activities decreased by $7.2 million from the amounts previously reported at the end of fiscal year The primary reason for the decrease is a prior period adjustment related to the implementation of GASB 68, Accounting and Financial Reporting for Pension an Amendment of GASB Statement No. 27, which requires local governments to recognize as a liability, beginning October 1, 2014, the long-term obligation associated with pension benefits. See Not 4 for additional details. Most of the City s major revenue sources, including property taxes, sales tax, and intergovernmental sources remained relatively stable from 2014 to One exception to this trend is charges for services, which decreased by $2.4 million. Up to FY 2014, charges for services included the payment from the Orlando Utilities Commission (OUC) for the City s debt associated with the electric system. In FY 2014, the City paid off the bonds whose debt service was funded by OUC; therefore, the City did not receive $1.8 million in OUC contributions for debt service in As compared to 2014, FY 2015 capital grants and contributions decreased by $1.7 million. The variance was due to a reduction in revenue for Judgments, Fines, and Federal Forfeitures Expenses, which in FY 2014 was substantially higher than projected. 9

25 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Governmental Activities (Continued) Overall, Governmental Activities expenditures remained stable. Exceptions to this are Public Safety expenditures, which increased by $1.5 million. This is as result of the additional salaries paid by the City to fund 25% of the new Police Officers and Firefighters grant funded positions. Moreover, total capital outlays within the General Fund increased by $0.4 million. The following graphs provide an analysis of the City s revenue sources for governmental activities by type, and its governmental activities expenses by function: Revenues by Source - Governmental Activities Capital Grants and Contributions 9.65% Operating Grants and Contributions 5.09% Property Taxes 17.31% Intergovernmental - Unrestricted 11.16% Charges for Services 29.00% Miscellaneous 2.25% 0.00% Investment Income 1.48% Public Service and Local Option Taxes 24.07% 10

26 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Governmental Activities (Concluded) Expenditures by Function Governmental Activities Electric System 2% Economic Environment 1% Parks and Recreation 11% Interest and Fees 6% General Government 15% Transportation 17% Public Safety 48% Business-type Activities: Net position of the City s business-type activities showed an increase of $6.3 million from the amounts previously reported at the end of fiscal year This change is attributable primarily to an increase of $2.8 million in charges for services and $2.0 million in capital grants and contributions. The increase in charges for services is due to an increase in overall economic activity. Total operating expenses for the business-type activities, remained relatively level. The following graph provides an analysis of the City s business-type activity expenses by function. Expenses and Program Revenue - Governmental Activities Expenses Revenues 25,000 20,000 15,000 10,000 5,000 0 General Government Public Safety Transportation Parks and Recreation Economic Environment Electric System Interest and Fees 11

27 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Business-type Activities (Concluded) Revenues by Source - Business type Activities Capital Grants & Contributions % Operating Grants & Contributions. 0.08% Investment Earnings. 0.66% Charges for Service % Financial Analysis of the City s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental Funds As of the end of fiscal year 2015, the City s governmental funds reported combined ending fund balances of $34.2 million, a decrease of $0.6 million from the prior year. Total governmental revenue of $36.4 million decreased $1.1 million from the previous year, primarily because the debt service revenue payment that OUC remitted to the City is no longer required as the bond issue was paid in full. Total governmental expenditures showed a decrease of $2.5 million; of this total decrease, $1.8 million belongs to the OUC debt that matured during the year. The remainder of the City s operating expenditures stayed relatively flat compared to the prior year. The general governmental fund balances of $34.2 million are available for spending, subject to regulatory, statutory, and budgetary restrictions. Of the available balance, $2.9 million or 8.5% is unassigned; the remainder of the fund balance is non-spendable or restricted and not available for new spending because the funds have already been committed by law or covenant. Major commitments for specific purposes are as follows: $ 0.1 Million for Non-Spendable Inventory $ 0.3 Million for Public Safety $ 1.3 Million for Self-insurance $ 19.7 Million for Physical Environment $ 3.8 Million for Economic Development 12

28 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) Financial Analysis of the City s Funds (Concluded) Governmental Funds (Concluded) The General Fund is the City s major governmental fund. As of September 30, 2015, its fund balance was $9.5 million with $2.9 million of that unassigned. General Fund revenue budgeted for 2015 was $19.3 million in the original budget and $21.2 million in the final budget (excluding transfers), with actual revenue received of $20.8 million. General Fund actual expenditures were 2.6 million less than the final budget. In order to deal with current budgetary constraints, all general fund programs kept operating costs to a minimum. However, the fiscal year 2015 ended with a net decrease in fund balance of $0.6 million Proprietary Funds The City s Enterprise Funds generate revenues and expenses that are shown as business-type activities in the government-wide financial statements. At the fund level, Enterprise Funds have an unrestricted net position of $1.7 million (deficit). Of this amount the Water Fund had $2.8 million and the Sewer Fund had $4.2 million (deficit). There was an increase in the total net position of the Enterprise Funds of $6.3 million in the current year, attributable mainly to the Water & Sewer Funds investing operating income in capital improvements. However, the overall net position (excluding net investment in capital assets) represents a $4.4 million decrease from the amount previously reported in the prior year, due to the re-statement of net pension liability for GASB 68. The Internal Service Funds (a category of the City s proprietary funds) are an accounting device used to accumulate and allocate costs internally among some of the City s various functions. At the fund level they have a total net position of $1.4 million (deficit), which is an increase of $0.4 million from the prior year, attributed primarily to a $0.4 million transfer from other funds. General Fund Budgetary Highlights The General Fund original budget was amended to increase expenditures (excluding transfers) by $2.7 million. Estimated revenues were also increased by $1.9 million when compared to the original budget. Budget changes between the original and final budgets are summarized below: Original Final Variance Actual Variance Revenues Taxes $9,473,208 $9,978,091 $504,883 $10,246,460 $268,369 Permits and Fees 786,785 1,280, ,139 1,409, ,428 Intergovernmental Revenues 3,827,055 4,188, ,626 4,249,410 60,729 Charges for Services 2,259,581 2,640, ,470 2,921, ,472 Fines and Forfeitures 117, ,329 42, ,204 (10,125) Grants 825, ,803 93, ,819 16,016 Investment Income 84, ,192 42, ,120 30,928 Other Revenue 1,928,729 1,947,847 19, ,718 (1,239,129) Total Revenues 19,303,158 21,241,918 1,938,760 20,778,606 (463,312) Expenditures City Council 207, ,740 22, ,541 46,199 City Manager 698, , , , ,547 Legal Services 284, ,389 (4,234) 131, ,196 Human Resources 551, ,503 (2,210) 371, ,334 Finance 1,357,889 1,358, , ,432 Information Technology 1,344,026 1,385,483 41,457 1,065, ,701 Planning/Zoning 633, ,986 (57,143) 505,091 70,895 Building Inspection/Maintenance 1,430,329 1,431, ,272, ,743 Police 10,380,312 11,555,754 1,175,442 11,398, ,828 Fire 6,699,182 7,239, ,205 7,130, ,789 Public Works 1,932,426 1,935,813 3,387 1,827, ,838 Parks and Recreation 3,362,377 3,429,298 66,921 3,239, ,721 Capital Outlay 348, , , , ,560 Total Expenditures $29,230,318 $31,910,905 $2,680,587 $29,265,122 $2,645,783 13

29 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) General Fund Budgetary Highlights (Continued) The changes for expenditures within functions: There was a $1.2 million in additional appropriations for the Police Department mostly related to the implementation of a salary survey completed during FY The Fire Department was allocated a $0.5 million in additional appropriations mostly related to the implementation of a salary survey completed during FY Capital Outlays in the amount of $0.6 million were added to the final budget mostly for the acquisition of equipment for the Police Department. The equipment was paid for using Police Forfeiture Funds. The changes in the revenue budget during the year are based on either new or improved information or estimates of unforeseen events. The primary changes between the original and final budget are as follows: Taxes: Estimated tax collections were revised upward for increased collections in ad valorem taxes, utility taxes, and higher state sales tax revenue sharing than originally projected. Permits, Fees, and Charges for Services budgets were revised upwards to reflect increased activity during the period. Capital Assets and Debt Administration Capital Assets The City s capital assets for its governmental and business-type activities as of September 30, 2015, are $340.9 million (net of accumulated depreciation). Capital assets include land, buildings, improvements other than buildings, intangible assets, infrastructure, machinery and equipment, and construction in progress and the change in each category are shown in the table above. Assets other than land and construction in progress are depreciable for the current year. City of St. Cloud's Capital Assets (in 000's) Governmental Governmental Business-type Business-type Total Total Activities Activities Activities Activities Land and Improvements $27,376 $27,748 $2,797 2,797 $30,173 $30,545 Construction In Progress 517 1,626 6,291 17,789 6,808 19,415 Buildings and Improvements 41,467 37,624 34,765 33,392 76,232 71,016 Equipment 6,316 6,661 10,943 9,514 17,259 16,175 Electric Plant 9,453 8,485 9,453 8,485 Water/Sewer/Sanitation/Storm Water Utility Assets 142, , , ,985 Infrastructure (Roads and Streets) 51,188 51,302 51,188 51,302 Total $136,317 $133,446 $197,284 $207,477 $333,601 $340,923 There was a decrease in net capital assets in government activities of $2.9 million, with a corresponding increase of $10.2 million in business-type assets. Additional information on the City s capital assets can be found in Note 3 of this report. 14

30 MANAGEMENT S DISCUSSION AND ANALYSIS (Concluded) General Fund Budgetary Highlights (Concluded) Long-Term Debt On September 30, 2015, the City had total long-term liabilities outstanding of $118.1 million, of which $111.6 million is from direct borrowing. The remaining $6.6 million is for the Florida Department of Environmental Protection (FDEP) long-term landfill monitoring requirements ($2.2 million), compensated absences ($1.5 million), and OPEB ($2.9 million). The City s long-term debt is secured by specified revenue sources (i.e., revenue bonds and notes) or covenants to appropriate annual debt service. The City does not have any general obligation debt, which would pledge the full faith and credit of the City. At the end of the fiscal year, the City had total long-term debt outstanding of: City of St. Cloud's Outstanding Debt Governmental Governmental Business-type Business-type Total Total Activities Activities Activities Activities Revenue Bonds & Notes $53,910,954 $51,232,812 $63,477,978 $60,228,808 $117,388,932 $111,461,620 During this year, as in the prior year, the bondholders of the Stevens Dependent Special District (DSD) debt instructed the trustee not to pay out the interest from the debt service funds held by the trustee. This places the bonds in default. The Stevens DSD debt is past the maturity date and the attorneys for the District and the bondholders are attempting to work out a settlement that is beneficial to both parties. Additional information on the City s long-term debt can be found in Note 6 of this report. Economic Factors and Next Year s Budgets and Rates The State of Florida, by constitution, does not have a state personal income tax and; therefore, the State operates primarily using sales, gasoline, and corporate income taxes. Local governments (cities, counties, and school boards) rely primarily on property and a limited array of other permitted taxes (sales, gasoline, and utilities) and fees (franchise, and occupational license) to finance governmental activities. For the business-type and certain other governmental activities (construction services and recreational programs), the user pays a related fee or charge associated with the service. In the case of business-type activities these fees are designed to cover expenses. For some governmental activities, such as recreation, these fees do not provide for full cost recovery and these activities are subsidized by general revenues. Fees for all services are examined and adjusted as needed. The adopted City-wide budget for fiscal year 2016 is $112.3 million. This budget implemented a Citywide salary survey that adjusted the City s pay structure to match surrounding municipalities pay levels. The cost of this adjustment including benefits was $0.6 million. Ad valorem tax revenues were projected to increase by 6.18% as a result of increased taxable values. The adopted millage rate of is the same as the prior year s millage rate. The increased tax revenue was used to fund additional Police Officers, Firemen (partially funded by grant revenues in previous years), and IT staff positions. State shared revenues for gas tax and State sales tax sharing are projected to increase slightly in the coming year, and the local communications service tax revenue declines of recent years appear to be stabilizing. The adopted budget for FY reflects the City Council s continued commitment to public safety, recreation, and quality municipal services for its residents and visitors. Requests for Information This financial report is designed to provide a general overview of the City of St. Cloud s finances for all those with an interest in the City s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, City of St. Cloud, 1300 Ninth St., St. Cloud, Florida The City s CAFR is also available on-line at under Departments - Finance. 15

31

32 Business- Governmental type Activities Activities Total Assets Cash and Investments $ 34,419,138 $ 18,252,190 $ 52,671,328 Receivables, Net 1,536,388 3,146,183 4,682,571 Due from Other Governments 619, ,632 Interfund Loan (813,896) 813,896 - Prepaid Expenses and Deposits 145,537 62, ,188 Inventory - Warehouse and Fuel 148, , ,310 Land Held for Resale - 3,652,697 3,652,697 Capital Assets Not Being Depreciated 29,373,854 20,585,540 49,959,394 Capital Assets, Net of Depreciation 104,072, ,891, ,963,369 Unamortized Bond Insurance Costs 325, ,171 Total Assets 169,826, ,776, ,603,660 Deferred Outflows of Resources Deferred Amount on Refunding 224, ,825 Pension Related 3,714, ,221 4,677,062 Total Deferred Outflows of Resources 3,939, ,221 4,901,887 Liabilities Accounts and Retainage Payable 2,010,678 2,401,693 4,412,371 Accrued Liabilities 857,774 1,780,206 2,637,980 Unearned Revenue and Deposits 773,125 5,695,581 6,468,706 Net Pension Liability 8,848, ,649 9,000,348 Long-term Liabilities: Due Within One Year 3,550,572 8,506,087 12,056,659 Due in More Than One Year 50,971,318 55,078, ,050,110 Total Liabilities 67,012,166 73,614, ,626,174 Deferred Inflows of Resources Pension Related 219, , ,778 Total Deferred Inflows of Resources 219, , ,778 Net Position STATEMENT OF NET POSITION SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Net Investment in Capital Assets 84,202, ,857, ,060,560 Restricted for: Debt Service 46,998 2,278,070 2,325,068 Capital Projects 18,859,060 8,556,678 27,415,738 Economic Development Community Redevelopment 2,509,939-2,509,939 Public Safety Initiatives 310, ,896 Unrestricted 604,507 (1,737,439) (1,132,932) Total Net Position $ 106,534, ,955,198 $ 267,489,595 The notes to the financial statements are an integral part of the financial statements. 16

33 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Program Revenues Charges Operating Capital for Grants and Grants and Functions/Programs Expenses Service Contributions Contributions Governmental Activities General Government $ 5,957,502 $ 658,094 $ 48,000 $ 98,933 Public Safety 19,760,542 3,437, , ,109 Transportation 6,955, ,151 2,560,018 Parks and Recreation 4,390, , , ,390 Economic Environment 370, Electric System 966,718 6,037, Interest and Fees 2,656, Total Governmental Activities 41,058,478 10,932,351 1,775,572 3,782,450 Business-type Activities Water Utility 10,453,220 9,932,740 11,446 3,894,656 Sewer Utility 10,416,969 9,576,991-4,664,576 Sanitation Utility 9,163,140 9,343,414-10,355 Stormwater Utility 1,513,019 1,675,477-1,291,345 Development Special District 1,867,943 1,260, Total Business-type Activities 33,414,291 31,788,622 11,446 9,860,932 Total Primary Government $ 74,472,769 $ 42,720,973 $ 1,787,018 $ 13,643,382 General Revenues Taxes: Property Taxes Intergovernmental, Unrestricted Public Service, Local Option Gas and Sales Taxes Investment Income Miscellaneous Transfers Total General Revenues and Transfers Change in Net Position Net Position, Beginning of Year Adjustment to Beginning Net Position Net Position, Beginning of Year, As Restated Net Position, End of Year The notes to the financial statements are an integral part of the financial statements. 17

34 Net (Expense) Revenue and Change in Net Position Primary Government Governmental Business-type Activities Activities Total $ (5,152,475) $ - $ (5,152,475) (14,895,092) - (14,895,092) (3,757,689) - (3,757,689) (2,806,252) - (2,806,252) (370,796) - (370,796) 5,070,311-5,070,311 (2,656,112) - (2,656,112) (24,568,105) - (24,568,105) - 3,385,622 3,385,622-3,824,598 3,824, , ,629-1,453,803 1,453,803 - (607,943) (607,943) - 8,246,709 8,246,709 (24,568,105) 8,246,709 (16,321,396) 6,524,415-6,524,415 4,206,415-4,206,415 9,074,772-9,074, , , , , ,325 2,641,419 (2,641,419) - 23,853,147 (2,354,184) 21,498,963 (714,958) 5,892,525 5,177, ,765, ,624, ,390,093 (6,515,993) 437,928 (6,078,065) 107,249, ,062, ,312,028 $ 106,534,397 $ 160,955,198 $ 267,489,595 The notes to the financial statements are an integral part of the financial statements. 18

35 BALANCE SHEET ALL GOVERNMENTAL FUNDS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA OUC One Percent Interlocal General Surcharge Agreement Fund Fund Fund Assets Cash and Investments $ 7,063,962 $ 3,709,853 $ 3,050,165 Customer Receivables, Net 220, Other Receivables, Net 1,293, Due from Other Governments 114, ,985 - Due from Other Funds 1,636, Prepaid Expenditures and Deposits 143, Inventory - Warehouse and Fuel 148, Interfund Loan Receivable 1,735, ,582 Total Assets 12,356,598 4,096,838 3,555,747 Liabilities and Fund Balances Liabilities Accounts and Retainage Payable 695, , ,116 Accrued Liabilities 826, Due to Other Governments 24, Due to Other Funds 577,231 2,456, ,000 Unearned Revenues 113, Deposits Payable 629, Interfund Loan Payable - - 1,504,990 Total Liabilities 2,867,603 2,748,107 2,088,106 Fund Balances Nonspendable 2,028, ,582 Restricted 310,896 1,348,731 - Assigned 4,231, ,059 Unassigned 2,918, Total Fund Balances 9,488,995 1,348,731 1,467,641 Total Liabilities and Fund Balances $ 12,356,598 $ 4,096,838 $ 3,555,747 The notes to the financial statements are an integral part of the financial statements. 19

36 Community Debt Other Total Redevelopment Service Governmental Governmental Agency Fund Funds Funds $ 2,511,812 $ 47,098 $ 17,520,534 $ 33,903, ,448 1,793-14,296 1,309, , , ,015,632 7,652, , , , ,241,234 2,513,765 47,098 23,670,377 46,240, ,230 1,337,886 3, , , ,131,750 7,565, , , , ,504,990 3, ,329,250 12,036, ,568 2,535,638 2,509,939 46,998 19,052,078 23,268, ,481 5,481, ,918,251 2,510,099 46,998 19,341,127 34,203,591 $ 2,513,765 $ 47,098 $ 23,670,377 $ 46,240,423 The notes to the financial statements are an integral part of the financial statements. 20

37 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Total Fund Balances of Governmental Funds $ 34,203,591 Amounts Reported for Governmental Activities in the Statement of Net Position are Different Because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. The cost of the assets is $243,043,023 and the accumulated depreciation is $109,597, ,445,856 The internal service funds are used by management to charge the costs of fleet management and medical insurance coverage cost to individual funds. The net position of the internal service funds, net of its capital assets included above and pension related accounts, are included in governmental activities in the statement of net position. (1,554,259) Deferred Outflows Inflows of Resources are not available in the current period and, therefore, are not reported in the governmental funds. Deferred Outflows and Inflows of Resources at year-end consist of: Deferred Outflows Related to Pensions 3,714,841 Deferred Outflows Related to Bond Refunding 224,825 Deferred Inflows Related to Pensions (219,796) Long-term liabilities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities, both current and long-term, are reported in the statement of net position. Long-term liabilities at year-end consist of: Net Pension Liability (8,848,699) Revenue Bonds (46,960,000) Revenue Notes (2,672,812) Term Loan (1,600,000) Refunding Bond Premium (101,792) Unamortized Bond Insurance Costs 325,171 Accrued Interest Payable (235,243) OPEB Liability (2,039,355) Compensated Absences (1,147,931) Total Net Position of Governmental Activities $ 106,534,397 The notes to the financial statements are an integral part of the financial statements. 21

38 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA OUC One Percent Interlocal General Surcharge Agreement Fund Fund Fund Revenues Taxes $ 10,246,460 $ 4,061,571 $ - Permits and Fees 1,409, Intergovernmental Revenues 4,249, Charges for Service 2,921,523-6,037,029 Fines and Forfeitures 150, Grants 935, Investment Income 157,120 57,295 44,367 Other Revenue 708,718 15,112 - Total Revenues 20,778,606 4,133,978 6,081,396 Expenditures Current: General Government 4,933, Public Safety 18,530, Transportation 1,855, Parks and Recreation 3,239, Economic Environment - 1,210 - Capital Outlay 705,528 1,194,313 - Principal Payments Interest and Fees (Total Expenditures) (29,265,122) (1,195,523) - (Deficiency) Excess of Revenues (Under) Over Expenditures (8,486,516) 2,938,455 6,081,396 Other Financing Sources (Uses) Transfers in 8,382, Transfers (out) (543,268) (3,553,705) (6,035,125) Total Other Financing Sources (Uses) 7,838,857 (3,553,705) (6,035,125) Net Change in Fund Balances (647,659) (615,250) 46,271 Fund Balances, Beginning of Year 10,647,694 1,963,981 1,421,370 Adjustment to Beginning Fund Balance (511,040) - - Fund Balances, Beginning of Year, As Restated 10,136,654 1,963,981 1,421,370 Fund Balances, End of Year $ 9,488,995 $ 1,348,731 $ 1,467,641 The notes to the financial statements are an integral part of the financial statements. 22

39 Community Debt Other Total Redevelopment Service Governmental Governmental Agency Fund Funds Funds $ - $ - $ 1,291,156 $ 15,599, ,277,487 3,686, ,152-4,887, ,958, , ,463 1,075,282 34, , , , ,370 1,496, , ,152 4,123,777 36,412, ,933, ,664 18,560, ,930 2,352, ,239, , , , ,618,922 4,518,763-2,678,142-2,678,142-2,658,275-2,658,275 (237,950) (5,336,417) (3,278,240) (39,313,252) 418,731 (4,698,265) 845,537 (2,900,662) - 4,647,403 4,234,977 17,264, (4,851,643) (14,983,741) - 4,647,403 (616,666) 2,280, ,731 (50,862) 228,871 (619,898) 2,092,683 97,860 19,113,106 35,336,694 (1,315) - (850) (513,205) 2,091,368 97,860 19,112,256 34,823,489 $ 2,510,099 $ 46,998 $ 19,341,127 $ 34,203,591 The notes to the financial statements are an integral part of the financial statements. 23

40 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Net Change in Fund Balances - Total Governmental Funds $ (619,898) Amounts Reported for Governmental Activities in the Statement of Activities are Different Because: Governmental funds report capital purchases as expenditures. However, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives and reported as depreciation expense. This reconciling item is the amount by which capital purchases of $4,518,763 and capital contribution of $1,256,979 was less than depreciation expense of $8,605,171. (2,829,429) In the statement of activities, only the loss on the sale/disposal of capital assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the capital assets sold/disposed. (47,008) The issuance of bonds and similar long-term debt provides current financial resources to governmental funds, and thus contribute to the change in fund balance. In the statement of net position; however, issuing debt increases long-term liabilities and does not affect the statements of activities. Similarly, repayment of principal is an expenditure in the governmental funds, but reduces the liability in the statement of net position. Also, governmental funds report the effect of issuance costs, premium, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The amounts of the items that make up these differences in treatment of long-term debt and related items are: Principal Payments on Bonds, Notes and Loan 2,678,142 Amortization of Bond Insurance Costs (45,512) Amortization of Premium 106,456 Amortization of Deferred Charge on Refunding (74,898) Some expenses reported in the statement of activities such as compensated absences and accrued interest, do not require the use of current financial resources and are not reported as expenditures in governmental funds: Compensated Absences (136,660) OPEB Liability (349,224) Accrued Interest on Long-term Debt 16,118 The net change in the net pension liability and deferred inflows and outflows related to pensions is reported in the statement of activities, but not in the fund statements. 238,011 The internal service fund is used by management to charge the costs of activities that benefit the entire government. The net income (expense) of the internal service fund is reported with governmental activities. 348,944 Change in Net Position of Governmental Activities $ (714,958) The notes to the financial statements are an integral part of the financial statements. 24

41 STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Business-type Activities Assets Water Sewer Sanitation Utility Utility Utility Current Assets Cash and Cash Equivalents $ 943,179 $ 89,024 $ 751,265 Restricted Assets Available for Current Liabilities 1,688,028 1,398, ,953 Receivables: Customers (Net of Allowance for Uncollectible Accounts) 649, , ,931 Unbilled Utility Revenues 560, , ,786 Inventories 279,650 92,793 - Due from Other Funds 1,585, ,201 - Prepaid Expenses and Deposits 47,927 13,359 1,365 Total Current Assets 5,754,683 2,995,787 1,605,300 Noncurrent Assets Restricted Cash, Investments and Accrued Interest: Bond Proceeds 149, Sinking Fund 1,508, Sinking Fund Reserves - 1,159,099 - Customer Deposits 180, ,409 - Impact Fee Funds 4,121,859 4,434,819 - Landfill Closure Fund - - 2,199,051 Debt Service Reserves (Current Portion) (1,688,028) (1,398,508) (109,953) Total Restricted Cash, Investments, and Accrued Interest 4,271,646 4,434,819 2,089,098 Capital Assets: Property, Plant and Equipment 92,108, ,904,750 11,747,896 (Accumulated Depreciation and Amortization) (25,993,742) (49,555,294) (7,796,521) Construction in Progress 9,744,835 7,989,947 - Total Capital Assets, Net 75,859, ,339,403 3,951,375 Other Assets: Land Held for Sale Total Other Assets Total Noncurrent Assets 80,131, ,774,222 6,040,473 Total Assets $ 85,885,992 $ 112,770,009 $ 7,645,773 Deferred Outflows of Resources Pension Related $ 341,775 $ 284,849 $ 278,230 Total Deferred Outflows of Resources $ 341,775 $ 284,849 $ 278,230 The notes to the financial statements are an integral part of the financial statements. 25

42 Governmental Business-type Activities Activities Stevens Plantation Internal Stormwater Dependent Service Utility Special District Total Funds $ 1,891,155 $ 234,268 $ 3,908,891 $ 515, ,247 3,547,736-92,164-1,615,379 6,720 98,705-1,530, , ,985, ,651-2,082, ,515 13,023, , , ,508, ,159, , ,556, ,199, , , (351,247) (3,547,736) ,795,563-31,089, ,850, ,772 (8,816,632) - (92,162,189) (217,882) 54,034-17,788,816-22,326, ,476, ,890-3,652,697 3,652, ,652,697 3,652,697-22,326,466 3,652, ,925, ,890 $ 24,408,490 $ 4,238,212 $ 234,948,476 $ 637,324 $ 57,367 $ - $ 962,221 $ 43,467 $ 57,367 $ - $ 962,221 $ 43,467 The notes to the financial statements are an integral part of the financial statements. 26

43 STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Concluded) Business-type Activities Liabilities and Net Position Water Sewer Sanitation Utility Utility Utility Current Liabilities Payable from Unrestricted Assets: Accounts Payable $ 753,655 $ 236,024 $ 457,307 Other Payables 47,838 15,415 16,744 Accrued Liabilities 95,420 81,926 79,798 Due to Other Funds 68, ,197 32,544 Compensated Absences 128,543 28,445 49,306 Unearned Revenue 24,672 5,251,472 - Long-term Liabilities Payable in One Year 672, ,649 - Total Payable from Unrestricted Assets 1,790,254 6,498, ,699 Payable from Restricted Assets: Accrued Interest Payable 252, ,569 - Deposits 180, ,409 - Long-term Liabilities Payable in One Year 1,255,540 1,022, ,953 Total Payable from Restricted Assets 1,688,028 1,398, ,953 Total Current Liabilities 3,478,282 7,896, ,652 Noncurrent Liabilities Long-term Liabilities Payable After One Year 29,603,427 22,435,538 - Interfund Loan Payable Landfill Postclosure Costs - - 2,089,098 OPEB Liability 241, , ,079 Compensated Absences 85,694 18,963 32,870 Net Pension Liability 53,865 44,893 43,850 Total Noncurrent Liabilities 29,984,669 22,780,841 2,400,897 Total Liabilities 33,462,951 30,677,477 3,146,549 Deferred Inflows of Resources Pension Related 60,377 50,320 49,151 Total Deferred Inflows of Resources 60,377 50,320 49,151 Net Position Net Investment in Capital Assets 44,478,362 81,101,686 3,951,375 Restricted for: Debt Service 1,255,540 1,022,530 - Capital Projects 4,121,859 4,434,819 - Unrestricted 2,848,678 (4,231,974) 776,928 Total Net Position $ 52,704,439 $ 82,327,061 $ 4,728,303 The notes to the financial statements are an integral part of the financial statements. 27

44 Governmental Business-type Activities Activities Stevens Plantation Internal Stormwater Dependent Service Utility Special District Total Funds $ 39,027 $ 835,683 $ 2,321,696 $ 412, ,997-20, ,269 1,039,930 11, , ,265 1,636, ,294 9, ,276, ,460,000 5,911, ,063 6,057,952 15,271,096 2,070, , , , ,388, ,247 3,547, ,063 6,409,199 18,818,832 2,070, ,038, , , ,089,098-54, , ,527 6,496 9, ,649 6,850 64, ,244 55,966,685 13, ,097 7,145,443 74,785,517 2,083,543 10, ,982 7,679 10, ,982 7,679 22,326, ,857, , ,278, ,556,678-1,776,160 (2,907,231) (1,737,439) (1,525,321) $ 24,102,626 $ (2,907,231) $ 160,955,198 $ (1,410,431) The notes to the financial statements are an integral part of the financial statements. 28

45 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Business-type Activities Water Sewer Sanitation Utility Utility Utility Operating Revenues Charges for Services $ 8,888,091 $ 9,507,463 $ 9,253,831 Other 1,044,649 69,528 89,583 Total Operating Revenues 9,932,740 9,576,991 9,343,414 Operating Expenses Customer Service 991, Water Treatment 2,440, Water Lines 1,763, Water Administration 774, Sewer Treatment - 2,751,204 - Sewer Lines - 1,751,292 - Sewer Administration - 785,104 - Municipal Garbage Collection - - 4,123,544 Landfill Operations and Closure - - 4,393,105 Stormwater Operations Cost of Land Sales Motor Pool Operations Premiums and Claim Expense Depreciation 3,682,522 4,536, ,754 (Total Operating Expenses) (9,653,211) (9,824,468) (9,164,403) Operating Income (Loss) 279,529 (247,477) 179,011 Nonoperating Revenues (Expenses) Investment Income 111, ,120 13,084 Reimbursement Grants 11, ,355 Gain (Loss) on Sale of Capital Assets 50,734 4,046 1,263 Interest Expense (850,743) (596,547) - Total Nonoperating Revenues (Expenses) (676,793) (457,718) 24,702 Income (Loss) Before Contributions and Transfers (397,264) (705,195) 203,713 Contributions and Transfers Capital Contributions 3,894,656 4,663,913 - Transfers from Other Funds 228, ,436 - Transfers to Other Funds (945,494) (1,232,772) (744,694) Total Contributions and Transfers 3,177,599 4,139,577 (744,694) Change in Net Position 2,780,335 3,434,382 (540,981) Net Position Beginning of Year 49,768,569 78,763,034 5,142,644 Adjustment to Beginning Net Position 155, , ,640 Beginning of Year, as Restated 49,924,104 78,892,679 5,269,284 End of Year $ 52,704,439 $ 82,327,061 $ 4,728,303 The notes to the financial statements are an integral part of the financial statements. 29

46 Governmental Business-type Activities Activities Stevens Plantation Internal Stormwater Dependent Service Utility Special District Total Funds $ 1,675,477 $ - $ 29,324,862 $ 4,995,593-1,260,000 2,463, ,376 1,675,477 1,260,000 31,788,622 5,103, , ,440, ,763, , ,751, ,751, , ,123, ,393, , , ,583,618 1,583, , ,280, ,349-9,541,493 24,959 (1,513,019) (1,583,618) (31,738,719) (5,138,413) 162,458 (323,618) 49,903 (34,444) 28, ,235 (2,267) 10,003-32,467 25, , (284,325) (1,731,615) - 38,231 (284,292) (1,355,870) 22, ,689 (607,910) (1,305,967) (11,711) 1,281,342-9,839, , ,655 (655,332) - (3,578,292) - 626,010-7,198, , ,699 (607,910) 5,892, ,944 23,249,819 (2,299,321) 154,624,745 (1,779,176) 26, ,928 19,801 23,275,927 (2,299,321) 155,062,673 (1,759,375) $ 24,102,626 $ (2,907,231) $ 160,955,198 $ (1,410,431) The notes to the financial statements are an integral part of the financial statements. 30

47 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Business-type Activities Water Sewer Sanitation Utility Utility Utility Cash Flows from Operating Activities Cash Received from Customers $ 8,886,471 $ 9,323,924 $ 9,128,901 Cash Paid to Suppliers for Goods and Services (2,918,649) (3,126,181) (5,720,504) Cash Paid to Employees for Services (2,854,672) (2,433,619) (2,355,966) Cash Paid for Postclosure Costs - - (76,963) Other Operating Revenues 1,044,649 69,528 89,583 Net Cash Provided by (Used in) Operating Activities 4,157,799 3,833,652 1,065,051 Cash Flows from Noncapital Financing Activities Operating Grants 11, Transfers from Other Funds 228, ,436 - Transfers to Other Funds (945,494) (1,232,772) (744,694) Interfund Loan Payments (167,431) 361,194 (13,633) Net Cash Provided by (Used in) Noncapital Financing Activities (873,042) (163,142) (758,327) Cash Flows from Capital and Related Financing Activities Property, Plant and Equipment Acquisitions (5,804,741) (4,070,541) (535,929) Impact Fees 2,764,954 2,289,522 - Contributions for Capital Assets ,355 Proceeds from Sales of Capital Assets 50,734 4,046 1,263 Landfill Closure Costs - - (78,073) Principal Payments on Debt (1,391,668) (1,857,504) - Interest Payments on Debt (857,045) (612,831) - Net Cash Provided by (Used in) Capital and Related Financing Activities (5,237,766) (4,246,645) (602,384) Cash Flows from Investing Activities Investment Income 111, ,120 13,083 Net Cash Provided by (Used in) Investing Activities 111, ,120 13,083 Net Increase (Decrease) in Cash and Cash Equivalents (1,841,239) (442,015) (282,577) Cash and Cash Equivalents, Beginning of Year 8,744,092 6,364,366 3,232,893 Cash and Cash Equivalents, End of Year $ 6,902,853 $ 5,922,351 $ 2,950,316 The notes to the financial statements are an integral part of the financial statements. 31

48 Governmental Business-type Activities Activities Stevens Plantation Internal Stormwater Dependent Service Utility Special District Total Funds $ 1,620,376 $ 1,260,000 $ 30,219,672 $ 5,098,314 (286,036) (1,448,112) (13,499,482) (4,670,299) (470,219) - (8,114,476) (343,793) - - (76,963) ,203, ,121 (188,112) 9,732,511 84, ,446 25, , ,655 (655,332) - (3,578,292) 60, , ,865 78,458 (594,755) 127,158 (2,262,108) 464,113 (262,061) - (10,673,272) (30,354) - - 5,054,476-10,003-21, , (78,073) (3,249,172) ,235 (1,185,641) - (252,058) 284,235 (10,054,618) (30,354) 28, ,234 (2,267) 28, ,234 (2,267) 45, ,314 (2,296,981) 515,714 1,845, ,201 20,549,171 - $ 1,891,155 $ 585,515 $ 18,252,190 $ 515,714 The notes to the financial statements are an integral part of the financial statements. 32

49 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Concluded) Business-type Activities Water Sewer Sanitation Utility Utility Utility Reconciliation of Cash and Cash Equivalents to Balance Sheet Total Unrestricted Cash and Investments Per the Balance Sheet $ 943,179 $ 89,024 $ 751,265 Total Restricted Cash and Investments Per the Balance Sheet 5,959,674 5,833,327 2,199,051 Cash and Cash Equivalents, End of Year $ 6,902,853 $ 5,922,351 $ 2,950,316 Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities Operating Income (Loss) $ 279,529 $ (247,477) $ 179,011 Bad Debt Expense 113,425 53,606 73,824 Depreciation 3,682,522 4,536, ,754 Changes in Assets - Decrease (Increase) and Liabilities - Increase (Decrease): Accounts Receivable, Net 159,592 44,206 (5,147) Prepaids (52,104) (2,634) (12,517) Unbilled Utility Revenue (176,133) (220,610) (118,497) Inventories 98,438 22,575 - Accounts and Retainage Payable (33,501) (394,002) 242,263 Customer Deposits 14,920 (7,135) (1,286) Compensated Absences 11,184 (5,826) 6,715 Net Pension Liability (2,028) (1,691) (1,651) Other Postemployment Benefits 43,501 47,218 41,039 Land Held for Sale Accrued Liabilities 18,454 8,554 13,543 Net Cash Provided by (Used in) Operating Activities $ 4,157,799 $ 3,833,652 $ 1,065,051 Schedule of Noncash Capital and Related Financing Activities Contributions of Capital Assets $ 1,129,702 $ 2,374,391 $ - The notes to the financial statements are an integral part of the financial statements. 33

50 Governmental Business-type Activities Activities Stevens Plantation Internal Stormwater Dependent Service Utility Special District Total Funds $ 1,891,155 $ 234,268 $ 3,908,891 $ 515, ,247 14,343,299 - $ 1,891,155 $ 585,515 $ 18,252,190 $ 515,714 $ 162,458 $ (323,618) $ 49,903 $ (34,444) 33, , ,349-9,541,493 24,959 (16,919) 319, ,561 (5,655) (3,226) - (70,481) (1,539) (38,182) - (553,422) ,013-32,425 (284,325) (437,140) 100, , ,073 (1,161) (341) - (5,711) (259) 10, , , ,002-9,484-50,035 1,652 $ 864,121 $ (188,112) $ 9,732,511 $ 84,222 $ 1,281,342 $ - $ 4,785,435 $ - The notes to the financial statements are an integral part of the financial statements. 34

51 STATEMENT OF NET POSITION FIDUCIARY FUNDS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Employee Retirement Funds Assets Cash and Cash Equivalents $ 2,132,483 Investments at Fair Value: Domestic Equities 35,740,606 Foreign Equities 11,276,254 Domestic Fixed Income Funds 21,384,308 Foreign Fixed Income Fund 3,183,681 Real Estate 8,402,960 Alternatives 1,913,235 Total Investments at Fair Value 81,901,044 Total Assets 84,033,527 Liabilities Total Liabilities - Net Position Held in Trust for Pension Benefits $ 84,033,527 The notes to the financial statements are an integral part of the financial statements. 35

52 STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Employee Retirement Funds Additions Contributions: Employer $ 4,821,982 Employer from State 444,890 Employee 486,348 Miscellaneous 8,652 Total Contributions 5,761,872 Investment Income: Investment Earnings 448,664 Dividend Income 1,393,497 Total Income on Investments 1,842,161 Total Additions 7,604,033 Deductions Pension Payments 3,084,553 DROP Distribution 499,867 Refunds to Employees 39,587 Administration 715,608 (Total Deductions) (4,339,615) Net Increase 3,264,418 Net Position Held in Trust for Pension Benefits Beginning of Year 80,769,109 End of Year $ 84,033,527 The notes to the financial statements are an integral part of the financial statements. 36

53

54 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Note 1 - Description of Funds and Summary of Significant Accounting Policies The financial statements for the City of St. Cloud (the City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Significant City accounting policies are described below. Reporting Entity The City of St. Cloud, County of Osceola, State of Florida, is the City s official name. The City was originally established under the laws of the State of Florida in In 1967, the City adopted its current charter by legal authority of Sp. Acts, Ch , Section 1.02 of the Florida Statutes. The City operates under a council-manager form of government and provides the following services, as authorized by its charter: public safety, public works, public utilities, culture, recreation, and community development. In evaluating the City as a reporting entity, management has addressed all potential component units (traditionally separate reporting entities) for which the City may or may not be financially accountable and, as such, be includable within the City s financial statements. The City (the primary government) is financially accountable if it appoints a voting majority of the organization s Governing Board and 1) it is able to impose its will on the organization, or 2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the City. Additionally, the primary government is required to consider other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity s financial statements to be misleading or incomplete. Management determined that the Stevens Plantation Improvement Project Dependent Special District and the Community Redevelopment Agency are component units that should be included in the City s financial statements. Stevens Plantation Improvement Project Dependent Special District (the DSD) The DSD was created by the City on August 21, 2003, via City Ordinance , pursuant to Section of the Florida Statutes. The purpose of the DSD is to acquire land within its geographical boundary from the proceeds of tax-exempt debt for resale to developers in association with the Stevens Plantation Development (a mixed-use, master planned community encompassing approximately 590 acres within the City). The City Council serves as the Governing Board of the DSD and has advanced certain costs to the DSD as of September 30, 2014, that are to be repaid in future years. The DSD is included as a blended component unit in the accompanying government-wide financial statements of the City. Community Redevelopment Agency (CRA) The CRA was created pursuant to Chapter 163, Florida Statutes, City Ordinance , and City Resolutions R, R, and R. The City Council serves as the CRA Board and the City maintains operational responsibility for the CRA s activity. Although legally separate, the CRA is appropriately blended as a governmental fund type component unit into the primary government. Separate financial statements for the CRA are not presently developed. 37

55 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. Except for nominal amounts, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements provided for governmental funds, proprietary funds, and fiduciary funds are excluded from the government-wide financial statements. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments for services provided and other charges between the City s water, sewer, sanitation and stormwater functions, and various other functions of the government. Elimination of these charges would distort the direct cost and program revenues reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions. Charges for internally dedicated resources are reported as general revenues, rather than as program revenues. Likewise, general revenues include all taxes. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are 38

56 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Fund Financial Statements (Continued) recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise fees, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. The City operates the following major governmental funds: The General Fund is the government s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Debt Service Fund accounts for the accumulation of resources for, and the payment of, general long-term debt principal and interest. The One Percent Surcharge Fund accounts for Discretionary Tax received from the state of Florida. The St. Cloud/OUC Interlocal Fund accounts for the restricted and unrestricted resources associated with the City s agreement with Orlando Utilities Commission (the OUC) to operate the City s electric system. The Community Redevelopment Agency Fund accounts for redevelopment of blighted areas within the City from the proceeds of tax increment financing. The City reports the following major proprietary funds: The Water Utility Fund accounts for the fiscal activity of providing water services to residential and commercial customers. The Sewer Utility Fund accounts for the fiscal activity of providing wastewater services to residential and commercial customers. The Sanitation Utility Fund accounts for the operations and maintenance of the City s solid waste collection system. The Stormwater Utility Fund accounts for the operations, improvements, and maintenance of the storm drainage system. 39

57 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Fund Financial Statements (Concluded) The Stevens Plantation Dependent Special District accounts for the acquisition of land within the District s geographical boundary from the proceeds of tax-exempt debt for resale to developers in association with the Stevens Plantation Development. Additionally, the City reports the following fund types: The Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes. The Capital Projects Funds accounts for the costs of constructing multiyear road paving, drainage, resurfacing, recreation facilities, and public building construction and renovation. The Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City s various functions. The City uses internal service funds to account for its fleet maintenance operations and self-insurance (health) programs. The Pension Trust Funds account for the activities of the City s General Employees, Police Officers, and Firefighters Retirement Systems, which accumulate resources for pension benefit payments to qualified retiring employees. They are excluded from the government-wide financial statements because they are fiduciary in nature and do not represent resources available to the government for operations. The City conforms all significant accounting policies to GAAP applicable to governmental units. The following is a summary of the more significant principles and practices used in the preparation of these financial statements: Proprietary Funds Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the City s enterprise funds and of the City s Internal Service Fund are charges to customers for sales and services. Operating expenses for enterprise funds and the Internal Service Fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City s policy to generally use restricted resources first, then unrestricted resources as they are needed for their intended purposes; however, this decision is frequently made on a case-by-case basis based upon facts and circumstances. 40

58 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Property Taxes Under Florida law, the assessment of all properties and the collection of all county, municipal, and school board property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector. The laws of the state regulating tax assessments are also designed to assure a consistent property valuation method state-wide. Florida Statutes permit municipalities to levy property taxes at a rate of up to 10 mills. The millage rate assessed by the City for the fiscal year ended September 30, 2015, was 5.1 mills. Property taxes are billed and collected within the same fiscal period and are reflected on the modified accrual basis. Ad valorem taxes on property values have a lien assessment and due date of January 1, with the millage established during September. The fiscal year for which taxes are levied begins October 1. Taxes are billed in November (levied) with a maximum discount available through November 30, and become delinquent April 1. Tax certificates are issued for delinquent taxes on or before June 1. After sale, the tax certificates bear interest of 18% per year, or at any lower rate bid by the buyer. The tax certificate money is then sent to the appropriate taxing agency in accordance with its tax levy to complete its ad valorem tax revenue requirement. The City would accrue property tax receivables for unsold certificates if they were measurable and available. However, they are not measurable and available. As a result, there are no property tax receivables at September 30, Cash and Cash Equivalents For purposes of the statement of cash flows, the City considers all highly liquid investments held outside of the City s pooled cash system (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. All cash and investments held by the pooled cash system are considered cash equivalents for the cash flow statement. Equity in Pooled Cash and Investments The City utilizes a pooled cash and investment fund, which allows the various funds of the City to pool monies for investment purposes. Investment earnings are distributed monthly based on average monthly balances. Cash is maintained in an interest-bearing checking account at a local financial institution to maximize earnings on idle cash. The nature of the Fund permits temporary negative cash balances upon overdrawing of cash available in individual funds, which are presented as interfund receivables and payables. Capital Grants and Contributions Accounts receivable from other governments include amounts due from grantors. Program and capital grants for capital assets are recorded as receivables and revenues at the time reimbursable costs are incurred. Revenues received in advance of costs being incurred are deferred. Capital grants and other contributions for capital asset additions to the proprietary funds are recorded as nonoperating revenues. Contributed assets are recorded in the proprietary funds and in general capital assets at fair value at the time received. 41

59 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Inventories and Prepaids Inventories consist of materials and supplies used in the City s utility and general government operations and are valued using the weighted-average cost method, which approximates market value. The cost of inventories is accounted for by the consumption method, whereby inventory is recorded as expenditure when used. Appropriate allowances are recorded for obsolete and surplus items, when applicable. Payments made to vendors for services that will benefit periods beyond September 30, 2015, are recorded as prepaid items. These payments are recorded as expenditures or expenses when consumed rather than when purchased. Capital Assets Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Property, plant and equipment with initial, individual costs that equal or exceed $1,000 and estimated useful lives of over one year are recorded as capital assets. Roads, bridges, and sidewalks are capitalized when dedicated to the City within a new development or when their initial costs equal or exceed $25,000 and possess estimated useful lives of more than one year. Capital assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of major business-type activities is included as part of the capitalized value of the assets constructed. Capital asset purchases are recorded as capital outlay expenditures in the fund level governmental funds in the year of acquisition. Property, plant and equipment are depreciated using the straight-line method over the following estimated useful lives: Buildings and Improvements Utility Line Extensions Plant and Equipment Meters and Transformers Infrastructure 8-50 Years Years 3-40 Years Years Years Proprietary fund expenditures for repairs and maintenance are expensed when incurred. Additions, major renewals, and replacements, which increase the useful lives of the assets, are capitalized. Compensated Absences All vacation pay is accrued when incurred in the government-wide, proprietary, and fiduciary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. 42

60 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Compensated Absences (Concluded) In proprietary funds, the amount of compensated absences associated with employee vacations that are recorded as expenses represent the amounts paid during the year and accrued at year-end. The entire liability for compensated absences of these funds is reflected in the respective financial statements split between the current and noncurrent portions. Compensated absences liabilities will be paid by several of the City s funds, including the General Fund, several of the enterprise funds, and the Internal Service Fund. Historically, 76% to 79% of these costs have been paid from the City s governmental funds, with the remaining 21% to 24% paid from its proprietary funds. Utility Impact Fees Utility impact fees are recorded as capital contributions and are restricted to expansion of system capacity. Fund Balance Reporting The City of St. Cloud is presenting the fund balances of the governmental funds in accordance with GASB Statement No. 54. This statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Fund balance classifications under GASB Statement No. 54 are Nonspendable, Restricted, Committed, Assigned, and Unassigned. These classifications reflect not only the nature of the funds, but also provide clarity to the level of restriction placed upon fund balance. Fund balance can have different levels of restraint, such as external versus internal compliance requirements. Unassigned fund balance is a residual classification within the General Fund. The General Fund should be the only fund that reports a positive unassigned balance. In all other funds, unassigned is limited to negative residual fund balance. The fund balance classifications are as follows: Nonspendable Includes fund balance amounts that cannot be spent either because they are not in spendable form or because of legal or contractual requirements. Examples of nonspendable amounts that cannot be used because of their form are long-term portion of loans to other funds, inventories, and prepaid amounts. Spendable Fund Balance: Restricted Amounts are not available because of legally enforceable constraints, such as money awarded from criminal prosecution, money restricted based on creditor s requirements of loan agreements, and amounts restricted by law or enabling legislation. Committed Amounts of the fund balance are set aside by action of the City Council for a specific purpose and cannot be used for any other purpose (unless there is action by the City Council allowing for such use) and amounts specifically committed for use in satisfying contractual requirements. The City does not have any committed fund balance in the governmental funds. 43

61 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Fund Balance Reporting (Concluded) Assigned Amounts of the fund balance are intended to be used for a specific purpose to be made by City management in accordance with the City s established fund balance policy and based on recommendations by the City Council, advisory committees, or the senior management of the City, and also included amounts to be appropriated in the subsequent year budget. Unassigned Amounts of the fund balance will only appear in the General Fund or, if other governmental funds expenditures are incurred in excess of amounts restricted, committed or assigned for the purpose, the other governmental funds may have a negative unassigned fund Balance. The City Council established a Fund Balance Policy that required the unassigned fund balance be no less than twelve-and-a-half percent (12.5%) of General Fund operating expenditures. For the spending order of the fund balance, the City uses restricted amounts first, when both restricted and unrestricted fund balance is available, unless there are legal documents/contracts that prohibit this. Additionally, the City would first use committed fund balance, followed by assigned fund balance, and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. Budgets and Budgetary Accounting The annual operating budget serves as legal authorization for expenditures and the proposed means of financing them. The 2015 annual operating budget was prepared for all funds, except the following: Pension Trust and Agency Funds These funds are not budgeted annually by the City Council. The annual operating budgets are prepared on the same basis of accounting as that previously described for each fund. The budget is prepared by the City Manager, detailing all estimated income, including the proposed property tax levy and all proposed expenditures as deemed necessary and desirable. The City Council may adopt the budget, with or without amendment, increasing or decreasing programs or amounts after public hearing. Adoption of the budget by the City Council constitutes appropriation of the amounts specified as expenditures from the funds indicated and constitutes a levy of the property tax proposed. Budgetary control is legally maintained at the department level. The City Manager is legally authorized to transfer part or all of the unencumbered appropriation balance within departments without seeking City Council approval. However, the City Manager must obtain approval from the City Council to transfer appropriations between departments or funds. Upon certification from the City Manager of excesses in revenue, the City Council may make supplemental appropriations for the year up to the amount of each excess. Supplemental appropriations were made during the year. If at any time during the year it appears probable to the City Manager that revenues will be insufficient to meet the 44

62 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Budgets and Budgetary Accounting (Concluded) amount appropriated, he shall notify the City Council who shall then take such further action, as it deems necessary to prevent any deficit. Appropriations, except for open project appropriations and encumbrances, lapse at the end of each fiscal year. Contingency amounts may be used for any unforeseen purpose or emergency upon approval of City Council. Encumbrances outstanding at year-end do not represent expenditures or liabilities under GAAP, but represent budgetary accounting controls that carry over to the next year. All budgets are prepared on a GAAP basis. The actual results of operations are presented in accordance with GAAP, and the City s accounting policies do not recognize encumbrances as expenditures until the period in which the goods or services are actually received and a liability is incurred. Encumbrances are presented as assigned fund balance on the balance sheets of the governmental funds and presented in more detail in Note 7 - Commitments. Accounting Changes Governmental Accounting Standards Board (GASB) Statement No. 61: The Financial Reporting Entity: Omnibus-an amendment of GASB Statements 14 and No. 34, establishes the requirement of inclusion of component units in the financial reporting entity. The Stevens Plantation Community Development District (the CDD) was created to manage, construct, and finance, through the issuance of tax-exempt debt, all infrastructure associated with the Stevens Plantation Development (a mixed-use, master planned community encompassing approximately 590 acres within the City). The CDD s landowners elect a five-member panel to serve as the Governing Board, based upon one vote per acre of land owned. The Stevens Plantation DSD no longer owns a majority of the land in the CDD and the CDD is not fiscally dependent on the DSD. The CDD was previously reported as a discretely presented component unit, however, as a result of no longer being a majority land owner, the CDD no longer meets the criteria to be included as a component unit. Adoption of New Accounting Standards During the year, the City adopted the following new accounting standards: GASB Statement No. 68, Accounting and Financial Reporting for Pension an amendment of GASB Statement No. 27 (GASB 68). The City provides defined pension benefits to retirees through a general employees plan and a police and fire employees plan. As the employer, the City implemented GASB 68, as required in GASB 68 requires expanded disclosures regarding pension plans in the notes to the financial statements and requires the City to retroactively record the City s portion of the net pension liability or asset on the City s Statement of Net Position, which has an effect of increasing or decreasing the City s net position. The beginning entity-wide net position of the City was adjusted as follows: 45

63 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 1 - Description of Funds and Summary of Significant Accounting Policies (Concluded) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Concluded) Adoption of New Accounting Standards (Concluded) Governmental Business-type Activities Activities Net Position September 30, 2014 $ 113,765,348 $ 154,624,745 Net Pension Adjustment General Employees Plan 335, ,928 Net Pension Adjustment Police and Fire Plan (6,851,761) - Restated Beginning Net Position $ 107,249,355 $ 155,062,673 Note 2 - Cash and Cash Equivalent Pooled Cash and Investments The City maintains a cash and investment pool that carries substantially all cash and investments of the City, and is used by all funds except the pension trust funds. Each fund s portion of the pool is displayed in the accompanying financial statements as Cash and Investments. The cash and investments of the pension trust funds and agency fund are held separately from those other funds of the City. All cash and investments of the pool are considered cash equivalents for the statement of cash flows. Cash Deposits As of September 30, 2015, the City s cash deposits were entirely covered by federal depository insurance or by the banking network provided by Chapter 280 of the Florida Statutes. Florida Statutes provide for collateral pooling by banks and savings and loans and limit local government deposits to authorized depositories. Therefore, all cash deposits held by banks can be classified as fully insured. Cash deposits were $8,462,715, with a carrying amount of $8,140,697, as of September 30, Investments The City s investment policy is constructed with the objectives of: 1) preserving and protecting principal; 2) maintaining liquidity; and 3) earning interest on the invested funds, and allows the City to invest surplus money in instruments provided by Florida Statutes and Among them are U.S. Treasury bills, bonds, notes and their derivatives, federal agency securities, local government surplus trust funds, domestic time deposits, bankers acceptance notes, commercial paper, repurchase agreements, federal securities trusts, collateralized mortgage obligations, corporate debt, asset-backed securities, taxable and tax-exempt securities, mortgage securities, and mutual funds made up of such securities. 46

64 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 2 - Cash and Cash Equivalent (Continued) Investments (Concluded) As of September 30, 2015, the City s pooled investments (including Pension Trust Funds) are summarized below: Credit Maturities Fair Investment Ratings (Years) Value U.S. Government Agencies AA 2.56 $ 23,845,603 Corporate and Local Government Bonds AA ,658,720 Certificate of Deposits: Negotiable Certificates of Deposit FDIC ,429,818 Insured State Board of Administration (Florida PRIME) AAAm ,106,634 Florida Municipal Investment Trust AAA/V ,790 Florida Municipal Investment Trust AAA/V ,869 Florida Surplus Asset Fund Trust (FLSAFE) AAAm ,197 Pension Funds: Cash and Cash Equivalents n/a n/a 2,132,483 Domestic Equity Funds n/a n/a 35,740,606 Foreign Equity Funds n/a n/a 11,276,254 Domestic Fixed Income AA ,384,308 Foreign Fixed Income A ,183,681 Real Estate Income Funds n/a n/a 8,402,960 Middle Market Debt n/a n/a 1,913,235 Total Investments $ 128,564,158 Florida PRIME (Formerly SBA) The local government surplus funds investment pool trust fund (the surplus funds investment pool) is a 2a7-like pool administered by the State Board of Administration Florida PRIME (formerly SBA). It is carried at amortized cost, which approximates market and is presented at the share price. A 2a7-like pool is not registered with the Securities and Exchange Commission (SEC) as an investment company; nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC s Rule 2a7 of the Investment Company Act of 1940, which comprises the rules governing money market funds. Thus, this pool operates essentially as a money market fund. Throughout the year and as of September 30, 2015, the surplus funds investment pool contained certain floating and adjustable rate securities, which were indexed based on the prime rate and/or one and three month LIBOR rates. Credit Risk The City s investment policy limits investments in debt securities to at least an AA rating, by two of the three nationally recognized rating agencies, at the time of purchase and allows holding securities downgraded to A-. The City s pension investment policy requires 85% of the fixed income securities to have a minimum rating of investment grade or higher, as reported by a major credit rating service. 47

65 Note 2 - Cash and Cash Equivalent (Concluded) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Custodial Credit Risk The City s investment policy, pursuant to Section (18), Florida Statutes, requires securities purchased by the City to be held in third-party safekeeping by an institution designated as the primary agent, which is qualified as a public depository, as defined in Chapter , Florida Statutes, from primary dealers (or their agents), as designated by the Federal Reserve Bank of New York or from an authorized secondary dealer/broker. The City s pension investments are held by the counterparty, not in the name of the City. Interest Rate Risk Interest rate risk exists when there is a possibility that changes in interest rates could adversely affect an investment s fair value. The weighted-average maturity of the City s investments is displayed with the fair value of the investments. The City s investment policy sets limitations on instruments, diversification, and maturity based on whether the funds invested are short-term or long-term. All funds are considered short-term, except those reserved for capital projects, postclosure landfill monitoring, debt service reserves, designated impact fees and special assessment prepayments being held for debt retirement, and one-half of the contingencies of the general, utility tax, and gas tax funds. Concentration of Credit Risk Nonpension Investments More than 5% of the City s nonpension investments are in the State Board of Administration (SBA), Federal Farm Credit Bureau, Federal National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation. These investments are 18.79%, 11.64%, 11.22%, 10.14%, and 9.82%, respectively, of the total nonpension investments of the City. General Employees Pension More than 5% of the City s General Employees Pension investments are in Euro Pacific Growth Fund and United States Treasury Bonds. These investments are 13.90% and 6.82%, respectively, of the total investments for the General Employees Pension Fund. Police and Fire Pension More than 5% of the City s Police and Fire Pension Investments are in Euro Pacific Growth Fund and United States Treasury Bonds. These investments are 12.80% and 6.23%, respectively, of the total investments for the Police and Fire Pension Fund. Foreign Currency Risk The Pension Trust Fund investment policies limit international investments to no more than 25% of total fund assets for both the General Employees Pension and 25% of total fund assets for the Police and Fire Pension. At September 30, 2015, the General Employees Pension had $7,969,386, or 17.45% of the total fund assets and the Police and Fire Pension had $6,208,171, or 16.12% of the total fund assets invested internationally. 48

66 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 3 - Capital Assets Beginning Ending Balance Increases (Decreases) Balance Governmental Activities Capital Assets Not Being Depreciated: Land and Improvements $ 10,484,897 $ 372,002 $ - $ 10,856,899 Right-of-way 16,890, ,890,955 Construction in Progress 517,375 2,303,346 (1,194,721) 1,626,000 Total Capital Assets Not Being Depreciated 27,893,227 2,675,348 (1,194,721) 29,373,854 Capital Assets Being Depreciated: Buildings and Improvements 67,468,613 55,719 (35,843) 67,488,489 Equipment 28,319,450 2,195,784 (4,851,636) 25,663,598 Electric Plant 45,194,950 - (113,313) 45,081,637 Infrastructure (Roads and Streets) 73,361,479 2,073,966-75,435,445 Total Capital Assets Being Depreciated 214,344,492 4,325,469 (5,000,792) 213,669,169 Less Accumulated Depreciation: Buildings and Improvements (26,001,923) (3,881,511) 18,481 (29,864,953) Equipment (22,003,229) (1,822,821) 4,823,682 (19,002,368) Electric Plant (35,741,953) (966,718) 111,621 (36,597,050) Infrastructure (Roads and Streets) (22,173,716) (1,959,080) - (24,132,796) Total Accumulated Depreciation (105,920,821) (8,630,130) 4,953,784 (109,597,167) Total Capital Assets Being Depreciated, Net 108,423,671 (4,304,661) (47,008) 104,072,002 Governmental Activities Capital Depreciated, Net $ 136,316,898 $ (1,629,313) $ (1,241,729) $ 133,445,856 Business-type Activities Capital Assets Not Being Depreciated: Land and Improvements $ 2,765,684 $ - $ - $ 2,765,684 Right-of-way 31, ,041 Construction in Progress 6,290,994 14,591,966 (3,094,145) 17,788,815 Total Capital Assets Not Being Depreciated 9,087,719 14,591,966 (3,094,145) 20,585,540 Capital Assets Being Depreciated: Buildings and Improvements 42,702, ,092-42,821,534 Water/Sewer/Sanitation Utility Plant 203,678,556 7,281,360 (5,050) 210,954,866 Equipment 25,109, ,522 (668,594) 25,277,157 Total Capital Assets Being Depreciated 271,490,227 8,236,974 (673,644) 279,053,557 Less Accumulated Depreciation: Buildings (7,937,705) (1,491,688) - (9,429,393) Water/Sewer/Sanitation Utility Plant (61,190,196) (5,784,435) 5,050 (66,969,581) Equipment (14,166,208) (2,265,370) 668,362 (15,763,216) Total Accumulated Depreciation (83,294,109) (9,541,493) 673,412 (92,162,190) Total Capital Assets Being Depreciated, Net 188,196,118 (1,304,519) (232) 186,891,367 Total Business-type Activities Capital Assets, Net $ 197,283,837 $ 13,287,447 $ (3,094,377) $ 207,476,907 49

67 Note 3 - Capital Assets (Concluded) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Depreciation Expense - Governmental Activities General Government and Administration $ 449,798 Public Safety 1,432,605 Transportation 4,603,917 Parks and Recreation 1,152,133 Electric Plant - Interlocal 966,718 Capital Assets Held by the City s Internal Service Funds Charged to the Various Functions Based on Their Usage of the Assets 24,959 Total Depreciation Expense - Governmental Activities $ 8,630,130 Depreciation Expense - Business-type Activities Water Utility $ 3,682,522 Sewer Utility 4,536,868 Sanitation Utility 647,754 Stormwater Utility 674,349 Total Depreciation Expense - Business-type Activities $ 9,541,493 Note 4 - Defined Benefit Pension Plans Plan Descriptions The City maintains two separate, single-employer defined-benefit pension plans, one for police officers and firefighters, and a general employees retirement plan that covers substantially all other full-time City employees. These plans are maintained as pension trust funds and are included as part of the City s reporting entity, using the accrual basis of accounting in accordance with generally accepted accounting principles. Plan member contributions are recognized in the period in which the contributions are due. Investments are reported at fair value. City ordinance and state law requires contributions to be determined by actuarial studies at least every three years. Stand-alone financial reports are not issued. Membership of each plan consisted of the following at the date of the latest actuarial valuation, October 1, 2015, for general employees and for police officers and firefighters: Police Officers and General Firefighters Inactive Plan Members or Beneficiaries Currently Receiving Benefits Inactive Plan Members Entitled to But Not Yet Receiving Benefits Active Plan Members Total

68 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 4 - Defined Benefit Pension Plans (Continued) General Employees Retirement Plan Plan Administration The General Employees Retirement Plan (GERP) is a single-employer defined benefit pension plan administered by a Board of Trustees which acts as the administrator of the Plan. The Board consists of 7 Trustees, 3 of whom shall be legal residents of the City who are appointed by the City Council and 4 of whom are Members of the Plan who are elected by a majority of the General Employees who are Members of the Plan and who vote in the election. Plan Benefits The GERP provides retirement, disability, and death benefits to plan members and their beneficiaries. Normal Retirement Eligibility: Earlier of: 1) Age 60 and 5 years of Credited Service, or 2) the completion of 30 years of Credited Service, regardless of age. Benefit Amount: 3.00% of Average Final Compensation (AFC) times Credited Service. Early Retirement Eligibility: Age 55 and 5 years of Credited Service. Benefit Amount: Computed as for Normal Retirement, actuarially reduced to reflect payment prior to age 60. Disability Eligibility: Total and permanent disability as determined by the Board of Trustees. Benefit Amount: Accrued benefit, actuarially reduced as for Early Retirement. Pre-Retirement Death Benefits Eligibility: Total and permanent disability as determined by the Board of Trustees. Benefit Amount: Accrued benefit, actuarially reduced as for Early Retirement. Vesting (Termination) Less than 5 years: Refund of Member Contributions. 5 years or more: Accrued benefit payable at age 60 or age 55 (reduced), or refund of Member Contributions. Contributions The City is required to contribute at an actuarially determined rate, or 10% of the employee s compensation, whichever is greater. Plan members contribute 1.0% of their annual covered salary. Contribution requirements are based upon the Normal (current year). Cost and amortization of the accrued past service liability as provided in Part VII of Chapter 112, Florida Statutes. Police Officers and Firefighters Retirement Plan Plan Administration The Police Officers and Firefighters Retirement Plan (PFRP) is a single-employer defined benefit pension plan administered by a Board of Trustees which acts as the administrator of the Plan. The Board consists of five Trustees, two of whom are legal residents appointed by the City Council, one of whom is a full-time Police Officer Member and one of whom is a full-time Firefighter Member who are elected by a majority of the Police Officers or Firefighters, respectively, who are Members of the Plan and a fifth Trustee who is chosen by a majority of the first four Trustees. Plan Description The Police Officers and Firefighters Retirement Plan (PFRP) provides retirement, disability, and death benefits to plan members and their beneficiaries. Normal Retirement Eligibility: Earlier of: 1) Age 55 and 10 years of Credited Service, or 2) the completion of 25 years of Credited Service, regardless of age. Benefit Amount: Average Final Compensation (AFC) times (3.75% times Credited Service plus an additional fraction of 3.75% where the numerator is hours of accrued sick leave and the denominator is annual scheduled work hours). 51

69 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 4 - Defined Benefit Pension Plans (Continued) Police Officers and Firefighters Retirement Plan (Concluded) Plan Description (Concluded) Early Retirement Eligibility: Age 50 and 10 years of Credited Service. Benefit Amount: Accrued benefit, reduced 3% for each year that benefit commencement precedes normal retirement. Disability Eligibility: Total and permanent disability as determined by the Board of Trustees from date of hire (service incurred) or after 10 years of Credited Service (non-service incurred). Benefit Amount Service: Unreduced accrued benefit, but not less than 42% of Average Final Compensation. Benefit Amount Non-Service: Unreduced accrued benefit. Pre-Retirement Death Benefits Vested: Accrued benefit, payable for 10 years beginning at the member s otherwise Early Retirement Date (reduced basis) or Normal Retirement Date (unreduced). Non-Vested: Refund of member contributions. Vesting (Termination) Less than 10 years of Service: Refund of Member Contributions. 10 years or more: Accrued benefit payable at otherwise Normal or Early (reduced) Retirement Date. Contributions Plan members are required to contribute 5.1% of their annual covered salary. The City is required to contribute at actuarially determined rates, or 10%, of the employee s compensation, whichever is greater. Per City Code Section 54.76, the City Council may amend established contribution requirements. Actuarial determined contribution rates are based upon the remaining amount necessary for payment of Normal (current year's) Cost and amortization of the accrued past service liability as provided in Part VII of Chapter 112, Florida Statutes. Plan Investments The following was the Board s adopted asset allocation policy as of September 30, 2015: Target Allocation Asset Class GERP PFRP Domestic Equity 40% 40% International Equity 15% 15% Broad Market Fixed Income 20% 20% Fixed Income (Non-Core) 5% 5% Global Fixed Income 5% 5% TIPS 5% 5% Real Estate 10% 10% Total 100% 100% Concentrations Neither plan held investments in any one organization that represented 5% or more of the plans fiduciary net position. 52

70 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 4 - Defined Benefit Pension Plans (Continued) Rate of Return For the year ended September 30, 2015, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, are as follows: GERP PFRP Rate of Return 1.79% 1.80% The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Deferred Retirement Option Program (DROP) When a member reaches normal retirement age, they may elect in writing to participate in the DROP for a maximum of five years. Participants elect to receive a credit equal to the monthly-calculated pension amount plus 6.5% ROI per annum, compounded monthly or Net ROI Return (total return net of brokerage commissions, management fees, and transaction costs). The balance of the participants DROP accounts as of September 30, 2015, for GERP was $1,027,159 and for PFRP $1,031,141, respectively. Net Pension Liability The components of the net pension liability of the sponsor on September 30, 2015, were as follows: GERP PFRP Total Pension Liability $ 46,064,688 $ 47,208,446 Plan Fiduciary Net Position (45,716,949) (38,555,837) Sponsor s Net Pension Liability $ 347,739 $ 8,652,609 Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) 99.25% 81.67% The measurement date for both plans was September 30, The measurement period and the reporting period for both plans was October 1, 2014 through September 30, The Sponsor s Net Pension Liability was measured as of September 30, 2015, which was the same date used for the Total Pension Liability. Actuarial Assumptions The Total Pension Liability was determined by an actuarial valuation as of October 1, 2014 updated to September 30, 2015, using the following actuarial assumptions: GERP PFRP Investment Rate of Return 8.00% 8.09% Projected Salary Increases 6.00% 5.75% Inflation Rate 3.00% 3.00% Discount Rate 8.00% 8.09% Mortality Rate: RP 2000 Combined Healthy (sex distinct), projected to the valuation year using scale AA. Disabled lives are set forward 5 years. We feel this assumption accommodates expected mortality improvements. The date of the most recent experience study for which significant assumptions are based upon is not available for the GERP. The significant assumptions are based upon the most recent actuarial experience study dated September 9th, 2008, for the period for the PFRP. 53

71 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 4 - Defined Benefit Pension Plans (Continued) Long-term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2015, are summarized in the following table: GERP PFRP Domestic Equity 7.5% 7.5% International Equity 8.5% 8.5% Broad Market Fixed Income 2.5% 2.5% Fixed Income (Non-Core) 2.5% 2.5% Global Fixed Income 3.5% 7.5% TIPS 2.5% 3.5% Real Estate 4.5% 4.5% Discount Rate The discount rate used to measure the total pension liability for GERP and PFRP was 8.00% and 8.09%, respectively. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate Assumption: Current Discount 1% Decrease Rate 1% Increase GERP 7.00% 8.00% 9.00% Sponsor s Net Pension Liability $ 5,860,712 $ 347,739 $ (4,283,953) PFRP 7.09% 8.09% 9.09% Sponsor s Net Pension Liability $ 14,084,295 $ 8,652,609 $ 4,098,442 54

72 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 4 - Defined Benefit Pension Plans (Continued) Changes in Net Pension Liability The Changes in Net Pension Liability for the GERP is as follows: Total Pension Plan Fiduciary Net Pension Liability (a) Net Position (b) Asset (a-b) Reporting Period Ended September 30, 2014 $ 43,013,686 $ 44,023,488 $ (1,009,802) Change for a Year: Service Cost 1,610,096-1,610,096 Interest 3,506,599-3,506,599 Differences between Expected and Actual Experience (487,223) - (487,223) Contributions - Employer - 2,427,915 (2,427,915) Contributions - Employee - 105,253 (105,253) Contributions Buy Back 4,115 4,115 - Net Investment Income - 799,602 (799,602) Benefit Payments, Including Refunds of Employee Contributions (1,582,585) (1,582,585) - Administrative Expense - (60,839) 60,839 Reporting Period Ended September 30, 2015 $ 46,064,688 $ 45,716,949 $ 347,739 The Changes in Net Pension Liability for the PFRP is as follows: Total Pension Plan Fiduciary Net Pension Liability (a) Net Position (b) Asset (a-b) Reporting Period Ended September 30, 2014 $ 43,360,336 $ 36,769,019 $ 6,591,317 Change for a Year: Service Cost 1,534,345-1,534,345 Interest 3,527,267-3,527,267 Change in Excess State Money 167, ,060 Differences between Expected and Actual Experience 267, ,013 Changes of Assumptions 393, ,847 Contributions - Employer - 2,416,007 (2,416,007) Contributions - State - 444,890 (444,890) Contributions - Employee - 376,980 (376,980) Net Investment Income - 669,442 (669,442) Benefit Payments, Including Refunds of Employee Contributions (2,041,422) (2,041,422) - Administrative Expense - (79,079) 79,079 Reporting Period Ended September 30, 2015 $ 47,208,446 $ 38,555,837 $ 8,652,609 Pension Expense For the year ended September 30, 2015, the City recognized Pension Expense of $1,968,811 and $2,006,661 for the GERP and the PFRP, respectively. 55

73 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 4 - Defined Benefit Pension Plans (Continued) Deferred Inflow and Deferred Outflow of Resources On September 30, 2015, the City reported Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources: Deferred Outflow Deferred Inflow of Resources of Resources GERP Differences between Expected and Actual Experience $ - $ 389,779 Net Differences between Projected and Actual Earnings on Pension Plan Investments 2,206,424 - PFRP Differences between Expected and Actual Experience 228,869 - Changes of Assumptions 337,584 - Net Differences between Projected and Actual Earnings on Pension Plan Investments 1,904,185 - Total $ 4,677,062 $ 389,779 Amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized in Pension Expense as follows: Year Ending September 30 GERP PFRP 2016 $ 454,162 $ 570, , , , , , , ,409 Thereafter - 94,409 56

74 Note 4 - Defined Benefit Pension Plans (Continued) Other Pension Plan Information NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) SCHEDULE OF PENSION PLAN NET POSITION AS OF SEPTEMBER 30, 2015 General Police Officers' Employees' and Firefighters' Retirement Retirement Fund Fund Total Assets Cash and Cash Equivalents $ 1,085,641 $ 1,046,842 $ 2,132,483 Investments at Fair Value: Domestic Equities 18,708,099 17,032,507 35,740,606 Foreign Equities 6,347,455 4,928,799 11,276,254 Domestic Fixed Income Funds 12,079,875 9,304,433 21,384,308 Foreign Fixed Income Funds 1,778,358 1,405,323 3,183,681 Real Estate 4,551,591 3,851,369 8,402,960 Alternatives 1,034, ,054 1,913,235 Total Investments at Fair Value 44,499,559 37,401,485 81,901,044 Total Assets 45,585,200 38,448,327 84,033,527 Net Position Held in Trust for Pension Benefits $ 45,585,200 $ 38,448,327 $ 84,033,527 SCHEDULE OF THE CHANGE IN PENSION PLAN NET POSITION AS OF SEPTEMBER 30, 2015 Additions Contributions: Employer $ 2,405,975 $ 2,416,007 $ 4,821,982 Employer from State - 444, ,890 Employee 109, , ,348 Miscellaneous 4,997 3,655 8,652 Total Contributions 2,520,340 3,241,532 5,761,872 Investment Income: Investment Earnings 237, , ,664 Dividend Income 758, ,553 1,393,497 Total Income on Investments 995, ,179 1,842,161 Total Additions 3,516,322 4,087,711 7,604,033 Deductions Pension Payments 1,261,975 1,822,578 3,084,553 DROP Distribution 316, , ,867 Refunds to Employees 4,042 35,545 39,587 Administration 369, , ,608 (Total Deductions) (1,951,890) (2,387,725) (4,339,615) Net Increase 1,564,432 1,699,986 3,264,418 Net Position Held in Trust for Pension Benefits Beginning of Year 44,020,768 36,748,341 80,769,109 End of Year $ 45,585,200 $ 38,448,327 $ 84,033,527 57

75 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 4 - Defined Benefit Pension Plans (Concluded) Deferred Compensation Fund The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code (IRC), Section 457. The deferred compensation plan, available to all City employees, permits them to defer a portion of their salary until future years. Employees money held in the deferred compensation plan is not available to employees until termination, retirement, death, or unforeseeable emergency. In October 1997, GASB issued Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. This statement allows the employer to not report the assets and liabilities in its financial statements if the employer has met the criteria of IRC, Section 457, and does not retain fiduciary accountability for the plan assets. During 1998, the City amended its deferred compensation plan to reflect the changes in the IRC and, in the opinion of management, does not retain fiduciary accountability for plan assets. Note 5 - Leasing Activities The City is the Lessor on various operating leases with individuals and businesses, which are renewable periodically. The rental income under these arrangements was $512,471 for the year ended September 30, Assets under these leases are primarily land, buildings, and improvements, and are reported as such in the notes to the financial statements (see Note 3 - Capital Assets). As of September 30, 2015, the cost and accumulated depreciation on these assets was $9,330,275 and $2,688,223, respectively. 58

76 Note 6 - Long-term Liabilities NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Long-term liability activity for the year ended September 30, 2015, was as follows: Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental Activities Revenue Bonds and Notes: Capital Improvement Bonds A $ 14,815,000 $ - $ (1,870,000) $ 12,945,000 $ 1,965,000 Capital Improvement Bonds B 34,015, ,015,000 - Florida DEP Revolving Fund Note ,820 - (13,200) 173,620 13,590 Florida DEP Revolving Fund Note ,144,353 - (82,830) 1,061,523 84,922 Florida DEP Revolving Fund Note ,549,781 - (112,112) 1,437, ,955 Bank of America Term Loan 2,200,000 - (600,000) 1,600, ,000 Total Revenue Bonds and Notes 53,910,954 - (2,678,142) 51,232,812 2,803,467 Add: Premium 208,248 - (106,456) 101,792 58,346 Bonds and Notes, Net of Premium 54,119,202 - (2,784,598) 51,334,604 2,861,813 Other Liabilities: Compensated Absences 1,011,271 1,011,008 (874,348) 1,147, ,759 Net OPEB Liability 1,690, ,224-2,039,355 - Total Other Liabilities 2,701,402 1,360,232 (874,348) 3,187, ,759 Total Government Activities $ 56,820,604 $ 1,360,232 $ (3,658,946) $ 54,521,890 $ 3,550,572 Business-type Activities Utility Revenue Notes Payable: Water Utility: Florida DEP Revolving Fund Note DW $ 15,552,756 $ - $ (971,668) $ 14,581,088 $ 997,663 Utility System Revenue Bonds A 15,250,000 - (200,000) 15,050, ,000 SunTrust Revenue Note A 2,120,000 - (220,000) 1,900, ,000 Total Water Utility 32,922,756 - (1,391,668) 31,531,088 1,927,663 Sewer Utility: Wells Fargo Bank Revenue Note B 294,873 - (194,164) 100, ,707 Florida DEP Revolving Fund Note ,545 - (19,768) 290,777 20,380 Florida DEP Revolving Fund Note ,891,810 - (125,023) 1,766, ,137 Florida DEP Revolving Fund Note WW 20,432,994 - (1,188,547) 19,244,447 1,217,955 SunTrust Revenue Note A 3,165,000 - (330,000) 2,835, ,000 Total Sewer Utility 26,095,222 - (1,857,502) 24,237,720 1,802,179 Total Utility Revenue Notes Payable 59,017,978 - (3,249,170) 55,768,808 3,729,842 Stevens Plantation Dependent Special District Bonds 4,460, ,460,000 4,460,000 Total Utility Revenue Notes and Bonds Payable 63,477,978 - (3,249,170) 60,228,808 8,189,842 Bonds and Notes, Net of Premium 63,477,978 - (3,249,170) 60,228,808 8,189,842 Other Liabilities: Landfill Closure Liability 2,277,124 - (78,073) 2,199, ,953 Compensated Absences 331, ,620 (284,548) 343, ,292 Net OPEB Liability 671, , ,201 - Total Other Liabilities 3,280, ,604 (362,621) 3,356, ,245 Total Business-type Activities $ 66,758,066 $ 438,604 $ (3,611,791) $ 63,584,879 $ 8,506,087 59

77 Note 6 - Long-term Liabilities (Continued) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) The following is a schedule of bonds and notes outstanding at September 30, 2015: Purpose of Description of Bonds Issue Issued Outstanding Rates Governmental Activities Revenue Bonds and Notes: Utility System Revenue Bonds Refunding $ 18,650,000 $ % Florida DEP Revolving Fund Note Capital Improvement 267, , % Florida DEP Revolving Fund Note Capital Improvement 1,751,996 1,061, % Florida DEP Revolving Fund Note Capital Improvement 2,312,042 1,437, % Bank of America Term Loan Capital Improvement 5,600,000 1,600, % Capital Improvement A Refunding 20,875,000 12,945, % Capital Improvement B Capital Improvement 34,015,000 34,015, % Total Government Activities $ 83,471,118 $ 51,232,812 Business-type Activities Revenue Notes Payable: Water Utility: Florida DEP Revolving Fund Note DW Capital Improvement $ 20,708,565 $ 14,581, % Utility System Revenue Bonds A Capital Improvement 15,500,000 15,050, % SunTrust Revenue Note A Refunding 2,355,000 1,900, % Total Water Utility 38,563,565 31,531,088 Sewer Utility: Wells Fargo Bank Revenue Note B Refunding 2,548, , % Florida DEP Revolving Fund Note Capital Improvement 391, , % Florida DEP Revolving Fund Note Capital Improvement 2,605,030 1,766, % Florida DEP Revolving Fund Note WW Capital Improvement 26,229,448 19,244, % SunTrust Revenue Note A Refunding 3,515,000 2,835, % Total Sewer Utility 35,289,545 24,237,720 Stevens Plantation Dependent Special District Bonds Capital Improvement 5,890,000 4,460, % Total Business-type Activities $ 79,743,110 $ 60,228,808 Debt service to maturity on the City's bonded indebtedness is as follows: Governmental Activities Business-type Activities Fiscal Year Principal Interest Principal Interest 2016 $ 2,803,467 $ 2,539,572 $ 8,189,842 $ 1,379, ,908,928 2,431,823 3,719,783 1,287, ,649,529 2,349,063 3,806,997 1,195, ,425,273 2,237,364 3,900,815 1,101, ,496,165 2,165,622 3,996,280 1,004, ,964,624 9,476,428 20,239,035 3,508, ,829,826 7,409,176 14,216,056 1,067, ,115,000 4,993,568 2,160,000 59, ,040,000 2,037, Total $ 51,232,812 $ 35,639,876 $ 60,228,808 $ 10,603,565 60

78 Note 6 - Long-term Liabilities (Concluded) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) The City has pledged certain revenues to repay certain bonds and notes outstanding as of September 30, The following table reports the revenues, sometimes net of related operating expenses, pledged for each debt issue, the amounts of such revenues received in the current year, the current year principal and interest paid on the debt, the approximate percentage of each revenue, which is pledged to meet the debt obligation, the date through which the revenue is pledged under the debt agreement, and the total pledged future revenues for each debt, which is the amount of the remaining principal and interest on the bonds and notes at September 30, 2015: Principal and Estimated Outstanding Pledge Revenue Interest Percentage Principal Pledged Description of Bonds Revenue Received Paid Pledged Interest Through Governmental Activities Capital Improvement Revenue 1% Surcharge N/A $ 1,256,640 N/A $ 7,599, Bonds 2010A Series (Covenant to Appropriate) Well Fargo Bank Revenue Notes - Florida DEP Revolving Fund Notes Gas Tax $ 1,315, , % 3,080, Bank of America Term Loan % Surcharge 4,133, , % 1,691, Capital Improvement Revenue Bonds Traffic Impact Fee N/A 1,155,522 N/A 6,988, A Series (Covenant to Appropriate) Capital Improvement Revenue Bonds Traffic Impact Fee N/A 1,966,871 N/A 67,513, B Series *(Covenant to Appropriate) Business-type Activities Florida DEP Revolving Fund Notes , 2005, and 2007 and SunTrust Utility Revenue Note A Net Sewer Revenue 6,617,270 2,470, % 28,269, Florida DEP Revolving Fund Note DW and Utility System Revenue Bonds 2012A and SunTrust Utility Revenue Note A Net Water Revenue 5,705,908 2,248, % 38,102, * Direct Payment Build America Bonds (BABs) that provide a federal subsidy of 35% of the interest paid on the bonds to the City (the issuer). Estimated Landfill Closure Cost and Postclosure Liability The landfill closure was officially accepted and declared by the Florida DEP on October 10, State and federal laws and regulations require the City to continue to perform certain maintenance and monitoring functions at the site for 30 years after closure. During operation of the landfill, the City annually funded a liability and an escrow account to cover estimated landfill closure costs and postclosure costs. Based upon full closure of the landfill, excess funds held in the escrow account over the originally estimated closure were withdrawn and deposited to the Sanitation Fund of the City. The remaining liability and escrow funds of $2,199,051 and $2,199,051, respectively, have been maintained to cover the postclosure costs estimated for the entire 30-year postclosure period. Actual costs may be different due to inflation, deflation, changes in technology, or changes in regulations. 61

79 Note 7 - Commitment and Contingencies NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) For Grants and Loans Under the terms of federal and state grants and loans, periodic audits are required, and certain costs may be questioned as not allowable as expenditures under the terms of the grants, which could lead to reimbursement to the grantor agencies. City management believes disallowances, if any, will not be material. Lawsuits Various lawsuits and claims arising in the ordinary course of operations are pending against the City. While the ultimate effect of such litigation cannot be ascertained at this time, the City Attorney has expressed his opinion that there will be no material effect on the City s financial position and/or that the City has sufficient insurance to cover any claims. Construction Contracts At September 30, 2015, the City had several uncompleted construction contracts. These contracts will be paid in future periods as work is performed. Payment will be made with proceeds from debt issues, impact fees, operating revenues, restricted cash on hand, and grants to be received. The remaining commitment on these construction contracts was approximately as follows: Note 8 - Interfund Transfers and Payables Capital Projects Fund $ 831,000 Water Utility 89,000 Sewer Utility 2,634,000 Sanitation Utility 34,000 Storm Water Utility 11,000 The following is a reconciliation of current and long-term interfund receivables and payables: Due From Due To Current Interfund General Fund $ 1,636,429 $ 577,231 One Percent Surcharge Fund - 2,456,980 OUC Interlocal - 400,000 Water Utility Fund 1,585,204 68,005 Sewer Utility Fund 400, ,197 Sanitation Utility Fund - 32,544 Stormwater Utility Fund - 229,519 Internal Service Fund - 1,636,240 Other Governmental Funds - Nonmajor 6,015,632 4,131,750 Total Current Interfund Receivables and Payables $ 9,637,466 $ 9,637,466 62

80 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 8 - Interfund Transfers and Payables (Concluded) Long-term Interfund Loan General Fund $ 1,735,652 $ - OUC Interlocal Agreement Fund 505,582 1,504,990 Stevens Plantation Dependent Special District - 736,244 Total Long-term $ 2,241,234 $ 2,241,234 The balance of $736,244 due from the Stevens Plantation Dependent Special District Fund (DSD) is the estimated value of advances associated with land acquisition, development, and annual assessments of the DSD. The loan is scheduled to be repaid as land is sold. The amount due from the OUC Interlocal Agreement Fund will be paid from proceeds of the Stevens Plantation interfund loan. In accordance with GASB Statement No. 34, the interfund advance to the DSD from the OUC Interlocal Fund has been reduced to an estimated expected value. Vehicle Maintenance and Self-Insurance Fund received cash to cover upcoming operating expenses. All remaining interfund balances relate to the funding of various capital projects and are expected to be drawn down as the Capital Project Fund pays for construction costs. The following is a reconciliation of interfund transfers: Transfer In Transfer (Out) Interfund Transfers General Fund $ 8,382,125 $ 543,268 One Percent Surcharge Fund - 3,553,705 OUC Interlocal Fund - 6,035,125 Debt Service Fund 4,647,403 - Water Utility Fund 228, ,494 Sewer Utility Fund 708,436 1,232,772 Sanitation Utility Fund - 744,694 Stormwater Utility Fund - 655,332 Internal Service Fund 360,655 - Nonmajor Funds: Special Revenue Funds 250,000 3,914,771 Capital Project Fund 3,984, ,872 Total Interfund Transfers $ 18,562,033 $ 18,562,033 The interfund transfers to the Debt Service Fund were for funding of the City s long-term notes and bonds payable. The transfer from the OUC Interlocal Agreement Fund to the General Fund was to transfer revenue received within the year to cover general expenditures of the City. Note 9 - Risk Management The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, and natural disasters, for which the City carries commercial insurance. Insurance against losses is provided through various commercial carriers for the following types of risk: General Liability Automobile Property Workers Compensation Public Officials and Employment Practices Liability Crime Pollution Liability 63

81 Note 9 - Risk Management (Concluded) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) The City s coverage for workers compensation is under a retrospectively rated policy. Premiums are accrued based on the ultimate cost to date of the City s experience for this type of risk. A detailed schedule of insurance in force is located in the statistical section. There was no significant reduction in insurance coverage from the prior year. Also, there were no settlements in excess of coverage for the past three years. In 2012, the City established a limited risk management program to help contain rising health insurance costs. The program consists of purchasing an aggregate stop loss and individual maximum claims reinsurance policy with the City being responsible for the claims not covered by the policy. Premiums collected are then deposited into the internal service fund called Self-Insurance fund. All administrative, network, insurance, and claims costs are charged to the fund. If there were to be a shortage that would not be recovered through user fees over a reasonable period of time, then the excess would be charged to each fund and department based upon their portioned share. Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs) based on the estimated claims incurred as of September 30 and offset by an estimated recovery from the excess insurance. The results of the process to estimate the claims liability is not an exact amount as it is dependent on timing of claims being reported and processed through the system. During the year, the excess individual insurance policy covers claims in excess of $100,000, while aggregate covers total claims in excess of $1,000,000. Fiscal Year Ended September 30, September 30, Unpaid Claims, Beginning of Fiscal Year $ 147,163 $ 132,666 Incurred Claims (including IBNRs) 3,187,463 3,163,015 Claims Payments (3,129,509) (3,148,518) Unpaid Claims, End of Fiscal Year $ 205,117 $ 147,163 Note 10 - Orlando Utilities Commission (OUC) Agreement Effective May 1, 1997, the City entered into an interlocal agreement with OUC, whereby OUC would operate the City s electric system for a period of 25 years. Terms of the agreement provide that all electric billings belong to OUC, with guaranteed payments from OUC to the City for the second preceding year s gross electric billings, not to go below $2,361,000 per year. As a part of the agreement, the City sold to OUC the majority of its electric materials inventory and rolling stock. Virtually all employees of the City s Electric Fund were transferred to OUC, along with accrued benefits, including a transfer from the City s defined-benefit pension plan of the present value of the accrued pension benefit. Additionally, the City terminated the electric utility Proprietary Fund by transferring the fund s assets and liabilities to other funds and account groups of the City. 64

82 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 10 - Orlando Utilities Commission (OUC) Agreement (Concluded) During fiscal year 2014, OUC discontinued the water and sewer billing portion of the agreement and discontinued use of the City s billing system. The City brought the water and sewer billing function back under City management. Note 11 - Other Postemployment Benefits (OPEB) The City provides postretirement health care benefits, in accordance with Florida Statute , to all employees who retire from the City. Employees retiring may pay all premium costs to remain in the City s group medical and/or dental plans and group life insurance. As of September 30, 2015, there were 14 retirees and 5 covered spouses receiving medical insurance benefits. The cost of these benefits is paid by the retirees. The City adopted the provisions of GASB Statement No. 45, Accounting and Financial Reporting of Employers for Postemployment Benefits Other than Pensions, prospectively. Currently, the City s OPEB benefits are unfunded. That is, there is no separate trust fund or equivalent arrangement into which the City would make contributions to advance-fund the obligation. Therefore, the ultimate subsidies, which are provided over time, are financed directly by general assets of the City. The City had an Actuarial Valuation for OPEB to measure the current year s subsidies, project these subsidies for decades into the future, and make an allocation of that cost to different years. The authority for establishing and amending the funding policy rests with the City Council. No stand-alone financial report is issued. Membership of the plan consisted of the following: Date of Actuarial Valuation October 1, 2015 Retirees and Beneficiaries Receiving Benefits 14 Active Plan Members 408 Total 422 Annual OPEB Costs and Net OPEB Obligation The Annual OPEB Cost is the amount that was expensed for the fiscal year. The Net OPEB Obligation is reflected as a liability in the Statement of Net Position. OPEB liabilities will be paid by several of the City s funds, including the General Fund, several of the enterprise funds, and the Internal Service Fund. Annual Required Contribution $ 634,741 Interest on Net OPEB Obligation 118,067 Adjustment to Annual Required Contribution (175,304) Annual OPEB Cost (Expense) 577,504 Estimated Net Contributions Made (86,296) Anticipated Increase in Net OPEB Obligation 491,208 Net OPEB Obligation - Beginning of Year 2,361,349 Net OPEB Obligation - Ending of Year $ 2,852,557 65

83 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 11 - Other Postemployment Benefits (OPEB) (Continued) Annual OPEB Costs and Net OPEB Obligation (Concluded) Three-Year Trend Information Fiscal Annual Percentage of Net Year OPEB Annual OPEB OPEB Ended Cost Cost Contributed Obligation 09/30/15 $ 577, % $ 2,852,557 09/30/14 561, % 2,361,349 09/30/13 477, % 1,887,283 Funded Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Amounts determined regarding the funding status of a plan and the annual required contributions of the employer are subject to continual revision, as actual results are compared with past expectations and new estimates are made about the future. The schedules of funding progress, presented as required supplementary information following the notes to the financial statements, present multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability. The following is a schedule of current funding progress: Unfunded (Overfunded) Actuarial Actuarial Actuarial Accrued Annual UAAL as a Valuation Value of Accrued Liability Funded Covered Percentage Date Assets Liability (UAAL) Ratio Payroll of Payroll 10/01/13 $ 0 4,246,205 4,246, % 15,548, % Projections of benefits for financial reporting purposes are based on the substantive Plan (the Plan) as understood by the employer and the Plan members, and include the types of benefits provided at the time of the valuation and historical pattern of sharing of benefit costs between the employer and the Plan members. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The following table summarizes the actuarial methods and assumptions as of the latest actuarial valuation date: 66

84 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Continued) Note 11 - Other Postemployment Benefits (OPEB) (Concluded) Funded Status and Funding Progress (Concluded) Valuation Date October 1, 2013 Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage (Closed) Remaining Amortization Period 30 Years Asset Valuation Method Market Value (Closed) Actuarial Assumptions: Investment Return 5% Projected Salary Increases 5% Inflation Rate 3% Post Retirement Benefit Increases 0% Health Care Cost Trend 6.50% (Grading Down to 4.5% in 2017) Note 12 - Deficit Net Position As of September 30, 2015, the Stevens Plantation Dependent Special District had deficit net position of $2,907,321, and the Internal Service Funds had deficit net position of $1,410,431. Note 13 - Fund Balance Reporting GASB 54 requires portions of governmental fund balances to be classified as shown in Note 1 - Description of Funds and Summary of Significant Accounting Policies. A detailed schedule of Governmental Fund Balances is presented below: 67

85 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Concluded) Note 13 - Fund Balance Reporting (Concluded) One OUC/St. Cloud Community General Percent Interlocal Redevelopment Fund Balances Fund Surcharge Fund Agency Nonspendable Inventory $ 148,867 $ - $ - $ - Prepaid Expenses 143, Long-term Receivable 1,735, ,582 - Restricted For Economic Development ,509,939 Transportation Federal Equitable Funds 310, Capital Additions - 1,348, Debt Service Assigned to Subsequent Year's Budget 2,910, Self-Insurance 1,320, Economic Development ,059 - Unassigned 2,918, Total Fund Balances $ 9,488,995 $ 1,348,731 $ 1,467,641 $ 2,510,099 Debt Total Other Total All Service Governmental Governmental Fund Balances Fund Funds Funds Nonspendable Inventory $ - $ - $ 148,867 Prepaid Expenses - 1, ,537 Long-term Receivable - - 2,241,234 Restricted For Economic Development ,510,265 Transportation - 653, ,900 Federal Equitable Funds ,896 Capital Additions - 18,397,852 19,746,583 Debt Service 46,998-46,998 Assigned to: Subsequent Year's Budget - - 2,910,908 Self-Insurance - - 1,320,612 Economic Development - 287,481 1,249,540 Unassigned - - 2,918,251 Total Fund Balances $ 46,998 $ 19,341,127 $ 34,203,591 68

86

87 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Budgeted Amounts Actual Original Final Amounts Variance Revenues Taxes $ 9,473,208 $ 9,978,091 $ 10,246,460 $ 268,369 Permits and Fees 786,785 1,280,924 1,409, ,428 Intergovernmental Revenues 3,827,055 4,188,681 4,249,410 60,729 Charges for Services 2,259,581 2,640,051 2,921, ,472 Fines and Forfeitures 117, , ,204 (10,125) Grants 825, , ,819 16,016 Investment Income 84, , ,120 30,928 Other Revenue 1,928,729 1,947, ,718 (1,239,129) Total Revenues 19,303,158 21,241,918 20,778,606 (463,312) Expenditures Current: City Council 207, , ,541 46,199 City Manager 698, , , ,547 Legal Services 284, , , ,196 Human Resources 551, , , ,334 Finance 1,357,889 1,358, , ,432 Information Technology 1,344,026 1,385,483 1,065, ,701 Planning/Zoning 633, , ,091 70,895 Building Inspection/Maintenance 1,430,329 1,431,073 1,272, ,743 Police 10,380,312 11,555,754 11,398, ,828 Fire 6,699,182 7,239,387 7,130, ,789 Public Works 1,932,426 1,935,813 1,827, ,838 Parks and Recreation 3,362,377 3,429,298 3,239, ,721 Capital Outlay 348, , , ,560 (Total Expenditures) (29,230,318) (31,910,905) (29,265,122) 2,645,783 (Deficiency) of Revenues (Under) Expenditures (9,927,160) (10,668,987) (8,486,516) 2,182,471 Other Financing Sources (Uses) Transfers from Other Funds 8,377,500 8,384,500 8,382,125 (2,375) Transfers to Other Funds (857,509) (848,898) (543,268) 305,630 Total Other Financing Sources (Uses) 7,519,991 7,535,602 7,838, ,255 Net Change in Fund Balances (2,407,169) (3,133,385) (647,659) 2,485,726 Fund Balance, Beginning of Year, as Restated 4,898,576 5,618,653 10,136,654 4,518,001 Fund Balance, End of Year $ 2,491,407 $ 2,485,268 $ 9,488,995 $ 7,003,727 Note to Schedule: The annual operating budgets of the City of St. Cloud, Florida (the City), are prepared on a basis consistent with the City s basic financial statements, which are presented in accordance with generally accepted accounting principles. 69

88 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL ONE PERCENT SURCHARGE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Budgeted Amounts Actual Original Final Amounts Variance Revenues Taxes $ 3,500,000 $ 3,775,000 $ 4,061,571 $ 286,571 Grants 241, Investment Income 10,000 10,000 57,295 47,295 Other Revenues ,112 15,112 Total Revenues 3,751,137 3,785,000 4,133, ,978 Expenditures Economic Environment 71, ,734 1, ,524 Capital Outlay 1,039,216 1,218,760 1,194,313 24,447 (Total Expenditures) (1,110,482) (1,491,494) (1,195,523) 295,971 Excess of Revenues Over Expenditures 2,640,655 2,293,506 2,938, ,949 Other Financing Sources (Uses) Transfers to Other Funds (3,177,155) (3,553,705) (3,553,705) - Total Other Financing Sources (Uses) (3,177,155) (3,553,705) (3,553,705) - Net Change in Fund Balances (536,500) (1,260,199) (615,250) 644,949 Fund Balance, Beginning of Year 536,500 1,260,199 1,963, ,782 Fund Balance, End of Year $ - $ - $ 1,348,731 $ 1,348,731 70

89 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL OUC INTERLOCAL AGREEMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Budgeted Amounts Actual Original Final Amounts Variance Revenues Payments from Other Governments $ 6,039,500 $ 6,039,500 $ 6,037,029 $ (2,471) Investment Income ,367 44,367 Other Revenue Total Revenues 6,039,500 6,039,500 6,081,396 41,896 Expenditures Current: Operating Expenditures Debt Service: Principal Payments Interest and Fees (Total Expenditures) Excess of Revenues Over Expenditures 6,039,500 6,039,500 6,081,396 41,896 Other Financing Sources (Uses) Transfers to Other Funds (6,037,500) (6,037,500) (6,035,125) 2,375 Total Other Financing Sources (Uses) (6,037,500) (6,037,500) (6,035,125) 2,375 Net Change in Fund Balances 2,000 2,000 46,271 44,271 Fund Balance, Beginning of Year - - 1,421,370 1,421,370 Fund Balance, End of Year $ 2,000 $ 2,000 $ 1,467,641 $ 1,465,641 71

90 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL COMMUNITY REDEVELOPMENT AGENCY FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Budgeted Amounts Actual Original Final Amounts Variance Revenues Intergovernmental $ 620,170 $ 620,170 $ 621,963 $ 1,793 Investment Income 10,000 10,000 34,718 24,718 Total Revenues 630, , ,681 26,511 Expenditures Current: Operating Expenditures 741, , , ,336 Capital Outlay (Total Expenditures) (741,086) (805,286) (237,950) 567,336 Excess of Revenues Over Expenditures (110,916) (175,116) 418, ,847 Other Financing Sources (Uses) Transfers from Other Funds Total Other Financing Sources (Uses) Net Change in Fund Balances (110,916) (175,116) 418, ,847 Fund Balance, Beginning of Year, As Restated 1,018,617 1,082,817 2,091,368 1,008,551 Fund Balance, End of Year $ 907,701 $ 907,701 $ 2,510,099 $ 1,602,398 Notes to Schedule: The annual operating budgets of the City of St. Cloud, Florida (the City), are prepared on a basis consistent with the City s basic financial statements, which are presented in accordance with generally accepted accounting principles. 72

91 REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE EMPLOYERS' NET PENSION LIABILITY AND RELATED RATIOS GENERAL EMPLOYEES' RETIREMENT PLAN LAST 10 FISCAL YEARS * (UNAUDITED) CITY OF ST. CLOUD, FLORIDA Total Pension Liability Service Cost $ 1,610,096 $ 1,542,990 $ 1,428,694 Interest 3,506,599 3,229,460 2,968,071 Differences between Expected and Actual Experience (487,223) - - Contributions - Buy Back 4, Benefit Payments, Including Refunds of Employee Contributions (1,582,585) (1,168,051) (1,319,345) Net Change in Total Pension Liability 3,051,002 3,604,399 3,077,420 Total Pension Liability - Beginning 43,013,686 39,409,287 36,331,867 Total Pension Liability - Ending (a) $ 46,064,688 $ 43,013,686 $ 39,409,287 Plan Fiduciary Net Position Contributions - Employer $ 2,427,915 $ 2,069,336 $ 2,145,635 Contributions - Employee 105, , ,360 Contributions - Buy Back 4, Net Investment Income 799,602 4,435,658 3,920,904 Benefit Payments, Including Refunds of Employee Contributions (1,582,585) (1,168,051) (1,319,345) Administrative Expense (60,839) (55,446) (67,453) Net Change in Plan Fiduciary Net Position 1,693,461 5,389,301 4,825,101 Plan Fiduciary Net Position - Beginning 44,023,488 38,634,187 33,809,086 Plan Fiduciary Net Position - Ending (b) 45,716,949 44,023,488 38,634,187 Net Pension Liability - Ending (a) - (b) $ 347,739 $ (1,009,802) $ 775,100 Plan Fiduciary Net Position as a Percentage of the of Total Pension Liability 99.25% % 98.03% Covered Employee Payroll $ 11,036,601 $ 10,016,147 $ 9,406,554 Net Pension Liability as a Percentage of Covered Employee Payroll 3.15% % 8.24% Notes to Schedule: Changes of assumptions: There have been no significant changes in assumptions. * GASB Statement No 67, was adopted for the 2014 Fiscal Year and 10 year trend information will be developed from 2013 forward. 73

92 REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE EMPLOYERS' NET PENSION LIABILITY AND RELATED RATIOS POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN LAST 10 FISCAL YEARS * CITY OF ST. CLOUD, FLORIDA Total Pension Liability Service Cost $ 1,534,345 $ 1,309,112 $ 1,209,341 Interest 3,527,267 3,331,345 3,146,732 Change in Excess State Money 167, ,991 - Differences between Expected and Actual Experience 267, Changes of Assumptions 393, ,974 - Benefit Payments, Including Refunds of Employee Contributions (2,041,422) (2,838,979) (1,597,248) Net Change in Total Pension Liability 3,848,110 2,349,443 2,758,825 Total Pension Liability - Beginning 43,360,336 41,010,893 38,252,068 Total Pension Liability - Ending (a) $ 47,208,446 $ 43,360,336 $ 41,010,893 Plan Fiduciary Net Position Contributions - Employer $ 2,416,007 $ 2,287,355 $ 1,816,519 Contributions - State 444, , ,351 Contributions - Employee 376, , ,741 Net Investment Income 669,442 3,777,453 3,286,743 Benefit Payments, Including Refunds of Employee Contributions (2,041,422) (2,838,979) (1,597,248) Administrative Expense (79,079) (63,897) (53,592) Net Change in Plan Fiduciary Net Position 1,786,818 3,967,044 4,196,514 Plan Fiduciary Net Position - Beginning 36,769,019 32,801,975 28,605,461 Plan Fiduciary Net Position - Ending (b) 38,555,837 36,769,019 32,801,975 Net Pension Liability - Ending (a) - (b) $ 8,652,609 $ 6,591,317 $ 8,208,918 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 81.67% 84.80% 79.98% Covered Employee Payroll $ 7,806,883 $ 6,809,621 $ 5,975,318 Net Pension Liability as a Percentage of Covered Employee Payroll % 96.79% % Notes to Schedule: Changes of assumptions: For the year ending 9/30/2014 the investment return assumption has been lowered from 8.25% to 8.17% For the year ending 9/30/2015 the investment return assumption has been lowered from 8.17% to 8.09% * GASB Statement No 67, was adopted for the 2014 Fiscal Year and 10 year trend information will be developed from 2013 forward. 74

93 CITY OF ST. CLOUD, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF CONTRIBUTIONS GENERAL EMPLOYEES' RETIREMENT PLAN AND POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN Actuarially Determined Contribution $ 1,981,908 $ 2,069,336 $ 2,145,635 Contributions in Relation to the Actuarially Determined Contributions 2,427,915 2,069,336 2,145,635 Contributions Deficiency (Excess) $ (446,007) $ - $ - Covered Employee Payroll $ 11,036,601 $ 10,016,147 $ 9,406,554 Contributions as a Percentage of Covered Employee Payroll 22.00% 20.66% 22.81% Actuarially Determined Contribution $ 2,515,377 $ 2,565,185 $ 2,094,349 Contributions in Relation to the Actuarially Determined Contributions 2,693,837 2,565,185 2,094,349 Contributions Deficiency (Excess) $ (178,460) $ - $ - Covered Employee Payroll $ 7,806,883 $ 6,809,621 $ 5,975,318 Contributions as a Percentage of Covered Employee Payroll 34.51% 37.67% 35.05% Notes to Schedules GENERAL EMPLOYEES' RETIREMENT PLAN POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN Methods and Assumtions Used in Calculations of Actuarially Determined Contributions The actuarially determined contribution rates in the schedule of contributions are calculated as of October 1, 2014, one year prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used rto determine the most recent contribution rate reported in that schedule: General Employees' Retirement Plan Police Officers' and Firefighters' Retirement Plan Valuation date October 1, 2013 October 1, 2013 Actuarial cost method Entry Age Normal Entry Age Normal Amortizaton method Level Dollar Level Precentage, Close Remaining amortization period 23 years 28 Years Asset Valuation method Four-year geometric Four-year geometric average of Market average of Market Value Returns Value Returns Salary increase 6.0% per annum 5.75% per annum Discount Rate 8.00% 8.25% Changes in Assumptions Since the prior measurement date, there have been no significant changes in assumptions. * GASB Statement No 68, was adopted for the 2014 Fiscal Year and 10 year trend information will be developed from 2013 forward. 75

94 CITY OF ST. CLOUD, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF INVESTMENT RETURNS GENERAL EMPLOYEES' RETIREMENT PLAN AND POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN LAST 10 FISCAL YEARS * (UNAUDITED) GENERAL EMPLOYEES' RETIREMENT PLAN For the Year Ended September 30: Annual Money-weighted Rate of Return Net of Investment Expense 1.79% 11.26% 11.35% POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN For the Year Ended September 30: Annual Money-weighted Rate of Return Net of Investment Expense 1.80% 11.53% 11.22% * GASB Statement No 67, was adopted for the 2014 Fiscal Year and 10 year trend information will be developed from 2013 forward. 76

95 CITY OF ST. CLOUD, FLORIDA OTHER POSTEMPLOYMENT BENEFITS PLAN SCHEDULE OF FUNDING PROGRESS Actuarial Value of Actuarial Accrued Liability Unfunded Funded Covered UAAL As % of Covered Actuarial Assets (AAL) - Entry AAL (UAAL) Ratio Payroll Payroll Valuation Date (a) Age (b) (b) - (a) (a)/(b) (c) (b-a)/(c) 10/01/13 $ - $ 4,246,205 $ 4,246, % $ 15,548, % 10/01/11-3,323,672 3,323, % 15,631, % 10/01/10-2,335,653 2,335, % 15,236, % 77

96 CITY OF ST. CLOUD, FLORIDA OTHER POSTEMPLOYMENT BENEFITS PLAN SCHEDULE OF EMPLOYER CONTRIBUTIONS Annual Fiscal Year Required Employer Ended Contribution Contribution 9/30/2015 $ 634,741 $ 86,296 9/30/ ,618 87,511 9/30/ ,900 71,716 9/30/ ,196 73,782 9/30/ ,515 39,145 Percentage Contributed 13.60% 14.38% 13.90% 14.87% 10.95% 78

97

98 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Final Actual Budget Amounts Variance Revenues Intergovernmental Revenues $ 550,724 $ 638,152 $ 87,428 Total Revenues 550, ,152 87,428 Expenditures Debt Service: Principal Payments 2,693,828 2,678,142 15,686 Interest and Fees 2,641,982 2,658,275 (16,293) (Total Expenditures) (5,335,810) (5,336,417) (607) (Deficiency) of Revenues (Under) Expenditures (4,785,086) (4,698,265) 86,821 Other Financing Sources Transfers from Other Funds 4,785,086 4,647,403 (137,683) Total Other Financing Sources 4,785,086 4,647,403 (137,683) Net Change in Fund Balances - (50,862) (50,862) Fund Balances, Beginning of Year - 97,860 97,860 Fund Balances, End of Year $ - $ 46,998 46,998 79

99 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Special Revenue Funds Parks and Economic County Road Recreation Development Gas Tax Impact Fee Impact Fee Fund Fund Fund Fund Assets Cash and Investments $ 309,876 $ 1,982,676 $ 11,027,782 $ 1,708,593 Accounts Receivable, Net ,296 - Due from Other Governments - 118, Prepaid Expenses 1, Due from Other Funds Total Assets 311,444 2,101,023 11,042,078 1,708,593 Liabilities and Fund Balances Liabilities Accounts and Retainage Payable 6,469 25, Due to Other Funds - 1,421, , ,560 Unearned Revenues 15,600-14,270 - Total Liabilities 22,069 1,447, , ,560 Fund Balances Nonspendable 1, Restricted ,902 10,892,966 1,493,033 Assigned 287, Total Fund Balances 289, ,902 10,892,966 1,493,033 Total Liabilities and Fund Balances $ 311,444 $ 2,101,023 $ 11,042,078 $ 1,708,593 80

100 Special Revenue Funds Police and Fire Capital Impact Fee Projects Fund Fund Total $ 945,847 $ 1,545,760 $ 17,520, , , , ,362 5,828,270 6,015,632 1,133,209 7,374,030 23,670, , ,230-2,359,577 4,131, , ,494,434 4,329, ,568 1,132,255 4,879,596 19,052, ,481 1,132,255 4,879,596 19,341,127 $ 1,133,209 $ 7,374,030 $ 23,670,377 81

101 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Special Revenue Funds Parks and Economic County Road Recreation Development Gas Tax Impact Fee Impact Fee Fund Fund Fund Fund Revenues Taxes $ - $ 1,291,156 $ - $ - Permits and Fees - - 1,303,038 - Impact Fees ,427 Grants Investment Income 1,458 24, ,618 20,477 Other Revenue 116, Total Revenues 118,199 1,315,950 1,472, ,904 Expenditures Current: Public Safety Transportation - 496, Economic Environment 131, Capital Outlay (Total Expenditures) (131,724) (496,930) - - (Deficiency) Excess of Revenues (Under) Over Expenditures (13,525) 819,020 1,472, ,904 Other Financing Sources (Uses) Transfers to Other Funds - (667,136) (2,810,369) (33,000) Transfers from Other Funds 250, Total Other Financing Sources (Uses) 250,000 (667,136) (2,810,369) (33,000) Net Change in Fund Balances 236, ,884 (1,337,713) 496,904 Fund Balances, Beginning of Year 53, ,018 12,230, ,129 Adjustment to Beginning Fund Balance (850) Fund Balances, Beginning of Year, As Restated 52, ,018 12,230, ,129 Fund Balances, End of Year $ 289,375 $ 653,902 $ 10,892,966 $ 1,493,033 82

102 Special Revenue Funds Police and Fire Capital Impact Fee Projects Fund Fund Total $ - $ - $ 1,291, ,303, , , , ,463 14,044 34, , , , , ,760 4,123,777 30,664-30, , , ,577 2,303,345 2,618,922 (346,241) (2,303,345) (3,278,240) 133,067 (2,095,585) 845,537 (404,266) (936,872) (4,851,643) - 3,984,977 4,234,977 (404,266) 3,048,105 (616,666) (271,199) 952, ,871 1,403,454 3,927,076 19,113, (850) 1,403,454 3,927,076 19,112,256 $ 1,132,255 $ 4,879,596 $ 19,341,127 83

103 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL ECONOMIC DEVELOPMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Final Actual Budget Variance Revenues Investment Income $ 1,458 $ - $ 1,458 Other Revenue 116, , Total Revenues 118, ,730 1,469 Expenditures Operating Expenditures 131, , ,006 (Total Expenditures) (131,724) (366,730) 235,006 Net Change in Fund Balances (13,525) (250,000) 236,475 Other Financing Sources Transfers from Other Funds 250, ,000 - Total Other Financing Sources 250, ,000 - Excess of Revenues and Other Financing Sources Over Expenditures 236, ,475 Fund Balance, Beginning of Year, as Restated 52,900-52,900 Fund Balance, End of Year $ 289,375 $ - $ 289,375 84

104 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL COUNTY GAS TAX FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Final Actual Budget Variance Revenues Taxes $ 1,291,156 $ 1,310,975 $ (19,819) Investment Income 24,794 9,500 15,294 Total Revenues 1,315,950 1,320,475 (4,525) Expenditures Operating Expenditures 496, , ,515 (Total Expenditures) (496,930) (699,445) 202,515 Excess of Revenues Over Expenditures 819, , ,990 Other Financing (Uses) Transfers to Other Funds (667,136) (951,851) 284,715 Total Other Financing (Uses) (667,136) (951,851) 284,715 Net Change in Fund Balances 151,884 (330,821) 482,705 Fund Balance, Beginning of Year 502,018 (123,000) 625,018 Fund Balance, End of Year $ 653,902 $ (453,821) $ 1,107,723 85

105 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL ROAD IMPACT FEE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Final Actual Budget Variance Revenues Impact Fees $ 1,303,038 $ 1,185,200 $ 117,838 Investment Income 169, ,000 39,618 Total Revenues 1,472,656 1,315, ,456 Excess of Revenues Over Expenditures 1,472,656 1,315, ,456 Other Financing Sources (Uses) Transfers to Other Funds (2,810,369) (2,948,050) (137,681) Total Other Financing Sources (Uses) (2,810,369) (2,948,050) (137,681) Net Change in Fund Balances (1,337,713) (1,632,850) 295,137 Fund Balance, Beginning of Year 12,230,679 (116,700) 12,347,379 Fund Balance, End of Year $ 10,892,966 $ (1,749,550) $ 12,642,516 86

106 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL PARKS AND RECREATION IMPACT FEES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Final Actual Budget Variance Revenues Impact Fees $ 509,427 $ 460,000 $ 49,427 Investment Income 20,477 13,000 7,477 Total Revenues 529, ,000 56,904 Expenditures Capital Outlay (Total Expenditures) Excess of Revenues Over Expenditures 529, ,000 56,904 Other Financing Sources (Uses) Transfers to Other Funds (33,000) (33,000) - Total Other Financing Sources (Uses) (33,000) (33,000) - Net Change in Fund Balances 496, ,000 56,904 Fund Balance, Beginning of Year 996,129 (116,700) 1,112,829 Fund Balance, End of Year $ 1,493,033 $ 323,300 $ 1,169,733 87

107 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL POLICE AND FIRE IMPACT FEES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Final Actual Budget Variance Revenues Impact Fees $ 465,022 $ 464,000 $ 1,022 Investment Income 14,044 9,150 4,894 Other Revenue Total Revenues 479, ,150 6,158 Expenditures Operating Expenditures 30, , ,456 Capital Outlay 315, , ,913 (Total Expenditures) (346,241) (1,112,610) 766,369 Excess of Revenues Over Expenditures 133,067 (639,460) 772,527 Other Financing Sources (Uses) Transfers to Other Funds (404,266) (404,266) - Total Other Financing Sources (Uses) (404,266) (404,266) - Net Change in Fund Balances (271,199) (1,043,726) 772,527 Fund Balance, Beginning of Year 1,403,454 1,046, ,626 Fund Balance, End of Year $ 1,132,255 $ 3,102 $ 1,129,153 88

108 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL CAPITAL PROJECTS FUND FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Final Actual Budget Variance Revenues Grants $ 139,463 $ 50,000 $ 89,463 Investment Income 34,910-34,910 Other Revenue 33,387 28,900 4,487 Total Revenues 207,760 78, ,860 Expenditures Capital Outlay 2,303,345 2,039,011 (264,334) (Total Expenditures) (2,303,345) (2,039,011) (264,334) (Deficiency) of Revenues (Under) Expenditures (2,095,585) (1,960,111) (135,474) Other Financing Sources (Uses) Transfers from Other Funds (936,872) (936,872) - Transfers to Other Funds 3,984,977 3,984,977 - Total Other Financing Sources (Uses) 3,048,105 3,048,105 - Net Change in Fund Balances 952,520 1,087,994 (135,474) Fund Balance, Beginning of Year 3,927,076 1,046,828 2,880,248 Fund Balance, End of Year $ 4,879,596 $ 2,134,822 $ 2,744,774 89

109 COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Assets Current Assets Cash and Investments - Self Motorpool Insurance Fund Fund Total $ $ 515,714 $ 515,714 Receivables (Net) - 6,720 6,720 Prepaid Items Total Current Assets - 522, ,434 Capital Assets: Property, Plant and Equipment 285,772 47, ,772 (Accumulated Depreciation and Amortization) (215,532) (2,350) (217,882) Total Capital Assets - Cost Less Depreciation 70,240 44, ,890 Total Assets 70, , ,324 Deferred Outflows of Resources Pension Related 43,467-43,467 Total Deferred Outflows of Resources 43,467-43,467 Liabilities and Net Position Current Liabilities Accounts Payable 39, , ,681 Accrued Expenses 11,531-11,531 Due to Other Funds 636,212 1,000,028 1,636,240 Compensated Absences 9,745-9,745 Total Current Liabilities 697,051 1,373,146 2,070,197 Long-term Liabilities Compensated Absences 6,496-6,496 Net Pension Liability 6,850-6,850 Total Long-term Liabilities 13,346-13,346 Total Liabilities 710,397 1,373,146 2,083,543 Deferred Inflows of Resources Pension Related 7,679-7,679 Total Deferred Inflows of Resources 7,679-7,679 Net Position Net Investment in Capital Assets 70,240 44, ,890 Unrestricted (674,609) (850,712) (1,525,321) Total Net Position (604,369) (806,062) (1,410,431) Total Liabilities and Net Position $ 106,028 $ 567,084 $ 673,112 90

110 COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Self Motorpool Insurance Fund Fund Total Operating Revenues Charges for Services $ 776,368 $ 4,219,225 $ 4,995,593 Other 7, , ,376 Total Operating Revenues 783,901 4,320,068 5,103,969 Operating Expenses Administration and General 832,505 4,280,949 5,113,454 Depreciation and Amortization 23,392 1,567 24,959 Total Operating Expenses 855,897 4,282,516 5,138,413 Operating (Loss) Income (71,996) 37,552 (34,444) Non-operating Revenues (Expenses) Investment Earnings (Loss) - (2,267) (2,267) Grants - 25,000 25,000 Total Non-operating Revenues (Expenses) - 22,733 22,733 Income (Loss) Before Capital Contributions and Transfers (71,996) 60,285 (11,711) Transfers in - 360, ,655 Net Capital Contributions and Transfers - 360, ,655 Change in Net Position (71,996) 420, ,944 Net Position, Beginning of Year Beginning of Year (552,174) (1,227,002) (1,779,176) Adjustment to Beginning Net Position 19,801-19,801 Net Position Beginning of Year, as Restated (532,373) (1,227,002) (1,759,375) Net Position, End of Year $ (604,369) $ (806,062) $ (1,410,431) 91

111 COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA Self Motorpool Insurance Fund Fund Total Cash Flows from Operating Activities Cash Received from Customers $ 783,901 $ 4,314,413 $ 5,098,314 Cash Paid to Suppliers (488,212) (4,182,087) (4,670,299) Cash Paid to Employees for Services (343,793) - (343,793) Net Cash Provided by (Used in) Operating Activities (48,104) 132,326 84,222 Cash Flows from Noncapital Financing Activities Interfund Loan Payments 78,458-78,458 Transfers from Other Funds - 360, ,655 Subsidy from Grants - 25,000 25,000 Net Cash Provided by (Used in) Noncapital Financing Activities 78, , ,113 Cash Flows from Capital and Related Financing Activities Property, Plant and Equipment Acquisitions (30,354) - (30,354) Net Cash Provided by (Used in) Capital and Related Financing Activities (30,354) - (30,354) Cash Flows from Investing Activities Investment Earnings - (2,267) (2,267) Total Cash Flows from Investing Activities - (2,267) (2,267) Net Increase (Decrease) in Cash and Cash Equivalents - 515, ,714 Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year $ - $ 515,714 $ 515,714 Reconciliation of Operating Income to Net Cash Provided by (Used in) Operating Activities Operating Income (Loss) $ (71,996) $ 37,552 $ (34,444) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Depreciation and Amortization 23,392 1,567 24,959 Changes in Assets Decrease (Increase) and Liabilities Increase (Decrease): Accounts Receivable - Net - (5,655) (5,655) Prepaid Expenses (1,539) - (1,539) Accounts Payable 1,807 98, ,669 Accrued Expenses 1,652-1,652 Compensated Absences (1,161) - (1,161) Net Pension Liability (259) - (259) Total Adjustments 23,892 94, ,666 Net Cash Provided by (Used in) Operating Activities $ (48,104) $ 132,326 $ 84,222 92

112 STATISTICAL SECTION Statistical tables differ from financial statements because they usually cover more than one fiscal year and may present non-accounting data. They reflect social and economic data, financial trends and the fiscal capacity of the government. STATISTICAL SECTION

113 STATISTICAL SECTION This part of the City of St. Cloud's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 93 Revenue Capacity These schedules contain information to help the reader access the factors related to the City's most significant local revenue sources, property tax and sanitation revenue. 103 Debt Capacity These schedules present information to help the reader assess the affordability of the City's current level of outstanding debt and the City's ability to issue additional debt in the future. 109 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 119 Operating Information These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 121 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

114 CITY OF ST. CLOUD Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Governmental Activities Net Investment in Capital Assets $ 79,837,606 $ 99,561,867 $ 91,810,061 $ 84,137,631 Restricted 16,194,396 16,279,491 13,516,681 19,454,060 Unrestricted 13,229,893 13,041,089 15,972,971 19,167,828 Total Governmental Activities Net Position $ 109,261,895 $ 128,882,447 $ 121,299,713 $ 122,759,519 Business-type Activities Net Investment in Capital Assets $ 72,143,256 $ 103,073,632 $ 123,172,185 $ 127,621,782 Restricted 14,271,935 11,667,094 11,995,813 9,823,772 Unrestricted 6,351, ,898 6,921,916 3,634,897 Total Business-type Activities Net Position $ 92,766,397 $ 115,580,624 $ 142,089,914 $ 141,080,451 Primary Government Net Investment in Capital Assets $ 151,980,862 $ 202,635,499 $ 214,982,246 $ 211,759,413 Restricted 30,466,331 27,946,585 25,512,494 29,277,832 Unrestricted 19,581,099 13,880,987 22,894,887 22,802,725 Total Government Net Position $ 202,028,292 $ 244,463,071 $ 263,389,627 $ 263,839,970 93

115 $ 89,112,088 $ 82,583,045 $ 83,793,736 $ 80,684,971 $ 85,331,016 $ 84,202,671 26,684,253 30,691,610 22,362,220 24,252,783 21,461,732 21,727,219 7,587,576 10,056,103 10,054,846 8,689,621 6,972, ,507 $ 123,383,917 $ 123,330,758 $ 116,210,802 $ 113,627,375 $ 113,765,348 $ 106,534,397 $ 131,122,728 $ 132,062,034 $ 131,137,117 $ 137,555,487 $ 141,169,776 $ 151,857,889 8,150,522 6,600,008 8,048,342 8,438,669 7,952,299 10,834,748 (151,067) (1,680,544) 4,431,718 6,069,480 5,502,670 (1,737,439) $ 139,122,183 $ 136,981,498 $ 143,617,177 $ 152,063,636 $ 154,624,745 $ 160,955,198 $ 220,234,816 $ 214,645,079 $ 214,930,853 $ 218,240,458 $ 226,500,792 $ 105,929,890 34,834,775 37,291,618 30,410,562 32,691,452 29,414,031 32,561,967 7,436,509 8,375,559 14,486,564 14,759,101 12,475,270 (1,132,932) $ 262,506,100 $ 260,312,256 $ 259,827,979 $ 265,691,011 $ 268,390,093 $ 137,358,925 94

116 CITY OF ST CLOUD Changes in Net Position, Last Ten Fiscal Years (accrual basis of accounting) Expenses Governmental Activities: General Government $ 7,224,539 $ 8,894,964 $ 7,890,836 $ 7,168,691 $ 7,137,033 Public Safety 10,020,685 12,057,815 13,292,752 13,911,586 15,307,678 Transportation 3,074,711 6,495,073 4,227,938 4,241,634 5,090,016 Parks and Recreation 4,404,944 4,187,160 4,138,622 4,503,650 3,361,365 Other Operating Economic Environment 234, , , , ,948 Electric System 1,666,369 1,975,948 1,693,858 1,693,128 1,690,375 Interest and Fees 1,448,765 1,597,642 1,545,597 1,745,459 1,271,010 Total Governmental Activities Expenses 28,074,508 35,667,774 33,008,364 33,575,313 34,495,425 Business-type Activities: Water Utility 3,220,591 4,307,875 5,802,030 6,958,588 6,437,261 Sewer Utility 5,291,863 6,549,457 7,952,647 8,584,851 9,873,423 Sanitation Utility 6,974,724 7,761,507 7,544,226 8,112,933 7,572,010 Stormwater Utility ,851 1,108,262 1,419,488 Development Special District 1,538,743 1,826, , , ,599 Total Business-type Activities Expenses 17,025,921 20,445,784 22,679,991 25,745,671 26,188,781 Total Primary Government Expenses $ 45,100,429 $ 56,113,558 $ 55,688,355 $ 59,320,984 $ 60,684,206 Program Revenues Governmental Activities: Charges for Services: General Government 5,418,414 $ $ 3,599,493 $ 1,499,551 $ 1,011,531 $ 2,145,736 Public Safety 1,016,648 1,260,035 1,123,337 1,623,153 2,757,249 Parks and Recreation 682, , , , ,311 Electric System 5,426,077 5,989,767 6,978,181 7,226,274 7,493,193 Operating Grants and Contributions 549, ,523 8, , ,186 Capital Grants and Contributions 20,234,555 23,835,863 8,485,034 2,156,281 2,219,619 Total Governmental Activities Program Revenues 33,327,441 35,984,733 18,706,297 13,378,572 15,291,294 Business-type Activities: Charges for Services: Water Utility 5,174,845 5,813,943 5,601,912 5,886,148 6,421,921 Sewer Utility 6,053,145 7,016,897 7,317,012 7,541,509 7,481,925 Sanitation Utility 6,821,184 8,058,368 7,405,342 7,810,643 8,018,630 Stormwater Utility - - 1,324,449 1,373,985 1,397,417 Development Special District 540, , , ,951 Operating Grants and Contributions 779, ,000 15,000-22,520 Capital Grants and Contributions 15,174,538 21,312,304 13,198,863 2,349,551 1,555,410 Total Business-type Activities Program Revenues 34,543,687 42,820,512 35,294,585 25,389,934 25,009,774 Total Primary Government Program Revenues $ 67,871,128 $ 78,805,245 $ 54,000,882 $ 38,768,506 $ 40,301,068 95

117 $ 5,953,856 $ 5,570,429 $ 6,794,742 $ 6,699,618 $ 5,957,502 15,902,498 15,371,634 16,112,807 18,302,419 19,760,542 5,437,602 5,919,165 6,733,514 6,906,016 6,955,858 3,699,492 3,754,797 3,723,262 4,005,833 4,390, , , ,250 1,003, ,796 1,563,612 1,138,813 1,006, , ,718 3,396,063 3,159,424 3,036,766 3,266,350 2,656,112 36,460,760 35,386,483 37,861,056 41,150,276 41,058,478 6,576,268 7,144,701 7,285,644 9,117,346 10,453,220 9,794,747 10,666,597 9,945,058 10,583,868 10,416,969 7,944,076 8,103,475 7,985,952 8,645,749 9,163,140 1,361,107 1,319,998 1,428,549 1,542,745 1,513, , , ,784 2,818,270 1,867,943 26,561,627 28,065,563 27,479,987 32,707,978 33,414,291 $ 63,022,387 $ 63,452,046 $ 65,341,043 $ 73,858,254 $ 74,472,769 $ 2,207,635 $ 666,069 $ 600,440 $ 638,914 $ 658,094 2,113,209 2,104,907 2,510,798 3,800,955 3,437, , , , , ,219 8,284,534 8,841,788 8,670,138 8,291,746 6,037, , ,158 1,012, ,685 1,775,572 2,021,925 2,697,937 3,527,608 5,295,196 3,782,450 15,955,932 15,772,794 16,928,472 19,610,049 16,490,373 6,912,214 7,079,078 7,948,291 8,823,640 9,932,740 7,624,962 7,980,977 8,468,777 8,693,581 9,576,991 8,365,473 9,131,690 8,475,746 8,396,471 9,343,414 1,479,377 1,535,675 1,587,630 1,544,259 1,675, ,579,500 1,260, ,498 14,500 9,000 28,311 11,446 1,525,898 2,705,633 9,722,779 7,855,974 9,860,932 26,155,422 28,447,971 36,212,223 36,921,736 41,661,000 $ 42,111,354 $ 44,220,765 $ 53,140,695 $ 56,531,785 $ 58,151,373 96

118 CITY OF ST CLOUD Changes in Net Position, Last Ten Fiscal Years (accrual basis of accounting) (Concluded) Net (Expense)/Revenue Governmental Activities $ 5,252,933 $ 316,959 $ (14,302,067) $ (20,196,741) $ (19,204,131) Business-type Activities 17,517,766 22,374,728 12,614,594 (355,737) (1,179,007) Total Primary Government Net Expense $ 22,770,699 $ 22,691,687 $ (1,687,473) $ (20,552,478) $ (20,383,138) General Revenues and Other Changes in Net Position Governmental Activities: General Revenues: Property Taxes $ 4,304,013 $ 6,091,173 $ 7,220,553 $ 7,561,891 $ 6,423,698 Intergovernmental, Unrestricted 2,852,132 2,917,171 2,940,215 2,616,532 3,239,623 Utility Service Tax 3,698,147 6,780,124 6,943,531 7,124,478 7,064,681 Investment Income 3,579,444 1,974,935 1,404,308 1,478, ,604 Gain on Sale of Assets , Miscellaneous 659, , , , ,685 Transfers 700,000 1,150,000 (12,679,489) 1,945,903 1,723,238 Total Governmental Activities 15,793,144 19,303,593 6,719,333 21,656,547 19,828,529 Business-type Activities: Investment Income 1,388,344 1,532,357 1,153,733 1,195, ,041 Gain on Sale of Assets - - 5, Miscellaneous 335,805 57,142 55,513 96, ,939 Transfers (700,000) (1,150,000) 12,679,489 (1,945,903) (1,723,238) Total Business-type Activities 1,024, ,499 13,894,696 (653,726) (779,258) Total Primary Government $ 16,817,293 $ 19,743,092 $ 20,614,029 $ 21,002,821 $ 19,049,271 Change in Net Position Governmental Activities $ 21,046,077 $ 19,620,552 $ (7,582,734) $ 1,459,806 $ 624,398 Business-type Activities 18,541,915 22,814,227 26,509,290 (1,009,463) (1,958,265) Total Primary Government $ 39,587,992 $ 42,434,779 $ 18,926,556 $ 450,343 $ (1,333,867) 97

119 $ (20,504,828) $ (19,613,689) $ (20,932,584) $ (21,540,227) $ (24,568,105) (406,205) 382,408 8,732,236 4,213,758 8,246,709 $ (20,911,033) $ (19,231,281) $ (12,200,348) $ (17,326,469) $ (16,321,396) $ 6,368,670 $ 5,724,332 $ 5,527,393 $ 5,979,320 $ 6,524,415 3,368,915 3,734,137 3,517,151 3,850,890 4,206,415 7,136,940 7,363,315 8,220,292 9,173,342 9,074, , ,217 92, , , , , ,564 1,010, ,325 2,109,231 (5,932,919) 343,073 1,659,984 2,641,419 20,451,669 12,493,733 18,349,199 22,053,150 23,853, , ,353 57,295 66, , , (2,109,231) 5,932,919 (343,073) (1,659,984) (2,641,419) (1,734,480) 6,253,272 (285,778) (1,593,334) (2,354,184) $ 18,717,189 $ 18,747,005 $ 18,063,421 $ 20,459,816 $ 21,498,963 $ (53,159) $ (7,119,956) $ (2,583,385) $ 512,923 $ (714,958) (2,140,685) 6,635,680 8,446,458 2,620,424 5,892,525 $ (2,193,844) $ (484,276) $ 5,863,073 $ 3,133,347 $ 5,177,567 98

120 CITY OF ST. CLOUD Fund Balances - Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year General Fund Reserved $ 193,319 $ 234,233 $ 363,153 $ 513,260 $ 2,504,950 Unreserved 5,634,376 4,156,908 4,135,787 5,840,649 4,353,960 Nonspendable Restricted Committed Assigned Unassigned Total General Fund $ 5,827,695 $ 4,391,141 $ 4,498,940 $ 6,353,909 $ 6,858,910 All Other Governmental Funds Reserved $ 21,874,447 $ 22,852,892 $ 24,326,894 $ 32,016,240 $ 49,242,237 Unreserved, Reported in: Special Revenue Funds 2,060,487 2,455,284 1,156,020 1,286,868 2,593,109 Capital Projects Funds (5,830,639) Debt Service Funds Nonspendable Restricted Committed Assigned Unassigned Total All Other Governmental Funds $ 23,934,934 $ 25,308,176 $ 25,482,914 $ 33,303,108 $ 46,004,707 Note: Beginning in fiscal year 2011, fund balance classifications have been revised due to the implementation of GASB Statement No

121 Fiscal Year $ - $ - $ - $ - $ ,370,452 2,518,046 2,451,601 2,442,265 2,028, , ,959 35, , , ,133,340 3,179,659 2,704,016 4,087,045 4,231,520 4,571,432 3,273,644 3,939,062 3,407,545 2,918,251 $ 9,321,828 $ 9,097,308 $ 9,129,690 $ 10,647,694 $ 9,488,995 $ - $ - $ - $ - $ ,716, , , , ,310 36,647,714 29,011,044 26,969,155 23,213,807 22,957, ,689,701 2,349,509 1,540,480 1,094,998 1,249, $ 48,053,947 $ 31,732,242 $ 28,902,535 $ 24,689,000 $ 24,714,

122 CITY OF ST. CLOUD Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year Revenues Taxes $ 17,109,189 $ 19,112,208 $ 17,894,736 $ 17,215,653 Licenses and Permits 3,458,446 1,567, , ,871 Intergovernmental 3,178,350 2,947,322 2,948,416 2,627,429 Charges for Services 2,138,704 2,253,987 1,961,075 2,467,593 Fines and Forfeitures 163, , , ,545 Interest and Other Grants 4,798,854 2,452,121 1,322, ,756 Payments from Other Governments 5,426,077 5,989,767 6,978,181 7,226,274 Investment Income 1,488,064 2,182,892 1,436,024 1,531,159 Other Revenues 4,267,338 2,213,303 2,958,631 2,724,868 Total Revenues 42,028,290 39,000,916 36,688,823 34,622,148 Expenditures Current: General Government 5,740,108 6,729,433 7,102,269 7,233,221 Public Safety 9,068,928 10,873,938 11,989,271 12,814,383 Physical Environment Transportation 1,798,215 4,726,938 2,243,079 1,825,996 Parks and Recreation 4,083,681 3,588,134 3,456,327 3,346,156 Operating Expenditures Economic Environment 234, , , ,165 Capital Outlay 18,692,960 10,488,211 10,361,888 12,419,126 Debt Service: Principal Retirement 2,176,998 2,514,577 2,679,599 3,115,853 Interest and Fees 1,431,808 1,567,020 1,562,592 1,370,181 Debt Issuance Costs (Total Expenditures) (43,227,193) (40,947,423) (39,613,786) (42,436,081) (Deficiency) Excess of Revenues (Under) Over Expenditures (1,198,903) (1,946,507) (2,924,963) (7,813,933) Other Financing Sources (Uses) Insurance Claims Reimbursement Bond Proceeds Issuance of Debt 7,870, ,196-10,000,000 Bond Premium Payment to Refunded Bond Escrow Agent Transfers in/from Other Funds 15,914,053 14,923,799 19,643,325 18,978,174 Transfers (out)/(to) Other Funds (15,214,053) (13,773,799) (16,435,825) (11,489,075) Other Financing Sources (Uses) 8,570,823 1,883,196 3,207,500 17,489,099 Net Change in Fund Balances $ 7,371,920 $ (63,311) $ 282,537 $ 9,675,166 Debt Service as a Percentage of Noncapital Expenditures 14.7% 13.4% 14.5% 14.9% 101

123 Fiscal Year $ 14,071,247 $ 14,073,338 $ 13,688,810 $ 13,747,685 $ 14,691,833 $ 15,599,187 2,419,398 2,468,250 2,614,851 3,213,534 3,207,093 3,686,839 2,656,756 3,764,674 4,299,705 4,310,955 4,505,628 4,887,562 3,357,777 3,472,421 2,005,328 2,172,825 10,982,679 8,958,552 1,140, , , , , , ,275 81,800 90, ,348 1,923,534 1,075,282 7,493,193 8,284,534 8,841,786 8,670, , , ,221 92, , ,801 1,330, ,751 3,194,486 2,338,838 1,689,454 1,496,163 33,396,585 34,298,370 35,659,046 35,236,013 37,507,179 36,412,590 5,178,044 4,829,790 5,981,125 6,262,085 4,895,805 4,933,674 14,149,887 14,764,873 14,204,511 14,878,555 16,984,759 18,560, ,582,535 2,464,536 2,543,154 2,309,765 2,407,052 2,352,860 2,257,219 2,602,977 2,685,031 2,776,356 2,882,584 3,239, , , , ,552 1,003, ,884 9,730,857 15,457,839 12,909,124 4,164,800 5,956,120 4,518,763 3,153,866 3,341,488 4,315,931 4,466,055 4,407,950 2,678,142 1,567,493 3,235,797 3,158,796 3,045,367 3,313,472 2,658,275-1,844, (39,257,849) (49,049,219) (46,272,352) (38,357,535) (41,851,368) (39,313,252) (5,861,264) (14,750,849) (10,613,306) (3,121,522) (4,344,189) (2,900,662) ,890, , (21,340,000) ,648,853 13,962,060 15,253,836 14,797,585 14,662,831 17,264,505 (13,925,615) (11,852,829) (21,186,755) (14,473,388) (13,014,173) (14,983,741) 1,723,238 36,607,633 (5,932,919) 324,197 1,648,658 2,280,764 $ (4,138,026) $ 21,856,784 $ (16,546,225) $ (2,797,325) $ (2,695,531) $ (619,898) 16.0% 19.6% 22.4% 22.0% 21.5% 15.3% 102

124 CITY OF ST. CLOUD Sanitation Revenue Indicators Last Ten Fiscal Years Transfer Station Annual Tonnage City 23,858 25,137 24,079 22,969 23,481 22,856 20,654 21,616 22,622 23,805 Non-City 65,286 77,428 53,263 71,438 68,874 74,238 70,568 64,042 58,888 68,648 Total 89, ,565 77,342 94,407 92,355 97,095 91,222 85,658 81,510 92,453 Rates City $40 $40 $42 $43 $43 $43 $44 $44 $44 $47 Non-City $40 $40 $42 $43 $43 $43 $44 $44 $44 $47 Refuse/Collection Customers Residential 10,872 12,185 12,842 12,897 13,098 13,998 15,277 15,011 15,048 15,669 Commercial Dumpsters Rates Curbside Residential $17 $17 $17 $17 $17 $17 $17 $17 $17 $18 Commercial $17 $17 $17 $17 $17 $17 $17 $17 $17 $18 Additional $9 $9 $9 $9 $9 $100 $100 $100 $100 $100 Dumpsters Note: In 2011, the charge for an additional trash bin changed to a $100 one-time fee (Res R Exh A). 103

125 CITY OF ST. CLOUD Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years Real Property Personal Property Fiscal Assessed Estimated Assessed Estimated Year Value Actual Value Value Actual Value 2006 $ 996,064,262 $ 1,398,568,241 $ 69,462, ,374, ,437,488,440 2,089,393,565 72,996,075 73,014, ,936,865,588 2,754,332,092 94,495,595 96,520, ,587,913,055 2,809,257,344 96,490,915 96,792, ,027,273,843 2,246,958,044 98,350,632 98,623, ,260,138,855 1,857,245,020 75,868,896 89,587, ,130,021,903 1,701,176,314 68,259,867 83,016, ,096,284,020 1,669,866,208 70,515, ,835, ,140,657,725 1,777,302,566 69,154, ,884, ,249,263,227 1,999,034,036 71,600, ,169,804 Source: Notes: Osceola County Property Appraiser (DR-403V). This schedule reflects values corresponding with the fiscal year(s) in which taxes are levied and payable. Centrally Assessed Property consists of railroad and telegraph systems which are assessed by the State of Florida. Currently, the City of St Cloud does not have Centrally Assessed Property. 104

126 Centrally Assessed Property Total Percent of Total Assessed Value Assessed Estimated Assessed Direct Estimated to Total Estimated Value Actual Value Value Tax Rate Actual Value Actual Value $ - $ - $ 1,065,526, $ 1,557,942, % - - 1,510,484, ,162,408, % - - 2,031,361, ,850,852, % - - 2,684,403, ,906,050, % - - 2,125,624, ,345,581, % - - 1,336,007, ,946,832, % - - 1,198,281, ,784,192, % - - 1,166,799, ,034,701, % - - 1,209,812, ,157,186, % - - 1,320,863, ,391,203, % 105

127 CITY OF ST. CLOUD Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) City Direct Rates Overlapping Rates Fiscal Year Basic Rate General Obligation Debt Service Total Direct Rate Osceola County Osceola County School District South Florida Water Management Source: Note: Osceola County Tax Collector. This schedule reflects rates corresponding with the fiscal year(s) in which taxes are levied and payable 106

128 CITY OF ST. CLOUD Principal Property Taxpayers Current Year and Nine Years Ago Fiscal Year 2014/2015 (a) Fiscal Year 2005/2006 (b) Taxpayer Taxable Percentage of Taxable Percentage of Assessed Total Taxable Assessed Total Taxable Value Rank Assessed Value Value Rank Assessed Value D R HORTON INC $ 21,092, % $ 8,121, % OSCEOLA SC LLC/ST CLOUD REGIONAL MEDICAL CENTER 15,311, % NEPTUNE BAY APARTMENTS LTD 11,831, % WAL-MART STORES 10,116, % 12,992, % MERCURY MARINE 8,947, % IH BORROWER LP / IH2 BORROWER LP 8,803, % SEMBLER/TREASURE FLORIDA JOINT VENTURE II/ MELVIN SEMBLER 8,664, % KRG ST CLOUD 13TH LLC 7,952, % EQUITY PRESERVE LLC/ EQUITY OAK RIDGE LLC / EQUIITY STEVENS LLC / EQUITY TERRA VISTA LLC 7,724, % RYLAND GROUP INC THE 7,478, % SPRINT FLORIDA 13,397, % THE HOME DEPOT 9,158, % MERCURY MARINE 9,029, % ST CLOUD 192 LLC 8,626, % ST CLOUD VILLAGE ASSOCIATES LTD 7,210, % MILLER GROUP PROPERTIES CORPORATION 6,650, % CRESTWOOD RRH LTD 6,562, % INLAND SOUTHEAST ST CLOUD LTD 4,638, % Total Taxable Assessed Value 107,922, % 86,388, % Total Taxable Assessed Value $ 1,212,940, % 979,137, % all Other Taxpayers Total Taxable Assessed Value $ 1,320,863, % $ 1,065,526, % all Taxpayers (a) The fiscal year ended September 30, 2015 tax levy is based on the 2014 taxable value. (b) The fiscal year ended September 30, 2006 tax levy is based on the 2005 taxable value. Source: Osceola County Property Appraiser 107

129 CITY OF ST. CLOUD Property Tax Levies and Collections Last Ten Fiscal Years Collected within the Taxes Levied Fiscal Year of the Levy Collections in Total Collections to Date Fiscal for the Percentage Subsequent Percentage Year Fiscal Year Amount of Levy Years Amount of Levy 2006 $ 4,417,152 $ 4,300, % $ 3,533 $ 4,304, % ,364,729 6,087, % 3,617 6,091, % ,516,318 7,212, % 8,231 7,220, % ,993,906 7,435, % 126,261 7,561, % ,661,775 6,358, % 65,472 6,423, % ,589,821 6,335, % 33,294 6,368, % ,926,418 5,690, % 33,797 5,724, % ,725,653 5,513, % 14,261 5,527, % ,193,240 5,958, % 21,289 5,979, % ,785,871 6,506, % 17,844 6,524, % Sources: Osceola County Tax Collector City of St. Cloud Finance Department. 108

130 CITY OF ST. CLOUD Ratios of Outstanding Debt by Type Last Ten Fiscal Years Business Type Governmental Type Activities Activities Special Total Percentage Fiscal Revenue Assessment Revenue Primary of Personal Per Year Bonds Bonds Bonds Government Income Capita 2006 $ 37,623,077 $ - $ 10,484,195 $ 48,107, % $ 1, ,841,696-31,059,751 66,901, % 2, ,162,097-58,666,770 91,828, % 2, ,046,242-61,972, ,018, % 3, ,892,376-57,186,774 94,079, % 2, ,100,888-56,562, ,663, % 3, ,784,957-69,618, ,403, % 3, ,318,905-66,600, ,919, % 3, ,910,955-63,477, ,388,932 N/A 3, ,232,812 60,228, ,461,620 N/A 2,809 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 109

131 CITY OF ST. CLOUD Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Limited General Percentage of Fiscal Obligation Actual Taxable Per Year (1) Bonds Total Value of Property Capita Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) There was no general bonded debt in these fiscal years. 110

132 Governmental Unit CITY OF ST. CLOUD Direct and Overlapping Governmental Activities Debt as of Septtember 30, 2015 (Unaudited) Debt Outstanding Estimated Overlapping (2) Estimated Share of Direct and Overlapping Debt (2) Overlapping Debt School District of Osceola County Florida Long Term Debt (1) Self Supporting State Bonds Series 2006A $ 1,285, % $ 93,274 Series 2009ARFD 390, % 28,309 Series 2010A 820, % 59,521 Series 2011ARFD 980, % 71,135 Series 2014A 3,535, % 256,594 District Revenue Bonds Sales Tax Revenue Bonds, Series ,555, % 2,072,714 Sales Tax Revenue Bonds, Series ,087, % 2,183,917 Certificates of Participation % Series 2007A and Series 2007B 59,160, % 4,294,231 Series 2009A 20,140, % 1,461,897 Series 2013A 39,580, % 2,872,983 Series 2014A 10,460, % 759,257 Series 2015A 8,310, % 603,196 Qualified School Construction Bonds Series 2010A 40,500, % 2,939,763 Classrooms First Loans Indian River County dated 7/1/ , % 61,557 Collier County dated 7/1/2002 5,276, % 383,009 Education Benefit Districts Bellalago Benefit District 9,766, % 708,947 Total Osceola County School District (1) 259,693, % 18,850,304 Osceola County Limited General Obligation Debt Series ,340, % 169,853 Series ,010, % 1,379,874 Series ,445, % 612,995 Total Osceola County 29,795, % 2,162,722 Subtotal - Overlapping Debt 289,488, % 21,013,026 Direct Debt City of St. Cloud 51,232, % 51,232,812 Total Direct and Overlapping Debt $ 340,721,321 $ 72,245,838 Sources: Osceola County Finance Department. Osceola County School Board Finance Department. City of St. Cloud Finance Department. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of St. Cloud, Florida. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and, therefore, responsible for repaying debt, of each overlapping government. (1) Excluding Capital Leases, Installment Purchases, Compensated Absences, and Estimated Insurance Claims payable. (2) Allocated on the basis of assessed values used for the purpose of ad valorem taxation. 111

133 CITY OF ST. CLOUD Pledged-Revenue Coverage Last Ten Fiscal Years Governmental-Type Activities One Percent Surcharge Revenue Notes Net Revenue Available Fiscal Gross Operating for Debt Debt Service Year Revenues(1) Expenses Service Principal Interest Coverage 2006 $ 2,936,047 $ - $ 2,936,047 $ 605,000 $ 666, ,872,137-2,872, , , ,956,719-2,956, , , ,674,689-2,674, , , ,721,221-2,721, , , ,877,183-2,877, , , ,266,193-3,266, , , ,504,152-3,504, , , ,785,580-3,785, , , ,133,978-4,133,978 1,574, , Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Revenue pledge transferred to 1% surcharge from Utility tax beginning in

134 CITY OF ST. CLOUD Pledged-Revenue Coverage Last Ten Fiscal Years Governmental-Type Activities Gas Tax Revenue Bonds Net Revenue Available Fiscal Gross Operating for Debt Debt Service Year Revenues Expenses Service (1) Principal Interest Coverage 2006 $ 1,413,257 $ 250,671 $ 1,413,257 $ 242,997 $ 86, ,499, ,998 1,499, , , ,278, ,498 1,278, , , ,239, ,264 1,239, , , ,218, ,535 1,218, , , ,181, ,013 1,181, , , ,169, ,815 1,169, , , ,317, ,590 1,317, ,055 90, ,302, ,530 1,302, ,950 77, ,315, ,930 1,315, ,142 71, (1) Gas tax revenue bonds are paid prior to operating expenses. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 113

135 CITY OF ST. CLOUD Pledged-Revenue Coverage Last Nine Fiscal Years Governmental-Type Activities Electric Utility Revenue Bonds Net Revenue Available Fiscal Gross Operating for Debt Debt Service Year Revenues Expenses Service Principal Interest Coverage 2006 $ 5,653,175 $ 2,681,094 $ 2,972,081 $ 1,330,000 $ 576, ,335,868 2,043,703 4,292,165 1,380, , ,174,531 1,916,829 5,257,702 1,435, , ,366,884 1,914,198 5,452,686 1,485, , ,573,859 1,913,710 5,660,149 1,545, , ,335,825 1,914,768 6,421,057 1,610, , ,886,696 1,917,666 6,969,030 1,680, , ,678,699 1,918,810 6,759,889 1,755, , ,322,611 1,919,714 6,402,897 1,835,000 84, Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements Electric Utility Systems Revenue Bond Issue fully matured as of August 1,

136 CITY OF ST. CLOUD Pledged-Revenue Coverage Last Nine Fiscal Years Governmental-Type Activities Utility Tax Revenue Bonds Net Revenue Available Gross Operating for Debt Debt Service Revenues (1) Expenses (2) Service Principal Interest Coverage 2006 $ 2,463,722 $ 169,803 $ 2,293,919 $ - $ 49, ,843, ,541 2,682, , ,931, ,803 2,628, , , ,372, ,999 3,126, , , ,259,508 46,000 3,213, , , ,173, ,237 2,928, , , ,010, ,629 2,834, , , ,788, ,702 2,654, , , ,000,295-3,000, ,000 99, (1) Total revenues (including interest) (2) Total operating expenses exclusive of depreciation Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Revenue pledge transferred to 1% surcharge beginning

137 CITY OF ST. CLOUD Pledged-Revenue Coverage Last Six Fiscal Years Governmental-Type Activities Traffic Impact Fee Bonds Net Revenue Available Fiscal Gross Operating for Debt Debt Service Year Revenues (1) Expenses (2) Service Principal Interest Coverage 2010 $ 1,744,756 $ - $ 1,744,756 $ - $ 327, ,700,807 50,350 1,650, ,605 2,048, ,797,459 15,812 1,781, ,368 2,306, ,393,492-1,393, ,530 2,290, ,221,292-1,221, ,482 2,265, ,472,656-1,472, ,805 2,226, (1) Total revenues (including interest) (2) Total operating expenses exclusive of depreciaton Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 116

138 CITY OF ST. CLOUD Pledged-Revenue Coverage Last Nine Fiscal Years Business-Type Activities Water Utility Revenue Bonds Net Revenue Available Fiscal Gross Operating for Debt Debt Service Year Revenues (1) Expenses (2) Service Principal Interest Coverage 2007 $ 5,962,072 $ 3,117,482 $ 2,844,590 $ - $ 89, ,382,750 3,716,483 2,666, , , ,407,446 4,197,784 2,209, , , ,032,222 3,766,691 3,265, , , ,651,514 3,877,965 3,773,549 1,260, , ,052,183 4,202,819 3,849,364 1,179, , ,723,906 4,146,469 5,577,437 1,333, , ,551,428 5,288,846 5,262,582 1,311, , ,676,597 5,970,689 5,705,908 1,391, , (1) Total operating revenues (including interest) as of FY 2010 (in prior years pledged revenue included other non-operating income) Impact fee revenue included does not exceed debt service on eligible portion of loan(s) (2) Total operating expenses exclusive of depreciation Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 117

139 CITY OF ST. CLOUD Pledged-Revenue Coverage Last Ten Fiscal Years Business-Type Activities Sewer Utility Revenue Bonds Net Revenue Available Fiscal Gross Operating for Debt Debt Service Year Revenues (1) Expenses (2) Service Principal Interest Coverage 2006 $ 7,553,552 $ 3,403,951 $ 4,149,601 $ 262,463 $ 166, ,491,208 4,099,842 4,391, , , ,095,171 4,995,256 3,099, , , ,502,567 5,205,504 3,297,063 1,801, , ,385,170 4,832,593 3,552,577 1,753, , ,450,880 4,877,186 3,573,694 2,073, , ,937,915 5,225,946 3,711,969 1,264,197 1,341, ,718,872 5,056,485 5,662,387 2,658, , ,366,495 5,648,292 4,718,203 1,811, , ,904,870 5,287,600 6,617,270 1,857, , (1) Total operating revenues (including interest) as of FY 2010 (in prior years pledged revenue included other non-operating income) Impact fee revenue included does not exceed debt service on eligible portion of loan(s) (2) Total operating expenses exclusive of depreciation Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 118

140 CITY OF ST. CLOUD Demographic and Economic Statistics Last Ten Calendar Years Per Personal Capita Income Personal Median School Unemployment Year Population (1) (in thousands) (2) Income (2) Age (3) Enrollment (4) Rate (5) 2006 $ 30,662 $ 742,020 $ 24, $ 49, % , ,093 24, , % , ,970 25, , % , ,623 25, , % , ,000 26, , % , ,004 27, , % ,723 1,030,441 27, , % ,171 1,058,361 27, , % ,674 1,114,363 28, , % ,316 n/a n/a , % Sources: (1) City of St. Cloud Planning Department, U.S. Census, University of Florida Bureau of Economic and Business Research (BEBR), Florida Statistical Abstract (2) Per Capita figures shown are for Osceola County. Personal income for St. Cloud is determined by multiplying the per capita by the City's population. (3) University of Florida Bureau of Economic and Business Research (BEBR), Florida Statistical Abstract. Information shown is for Osceola County; (4) Osceola County School Board; Enrollment shown is for Osceola County (5) Office of Economic and Demographic Reasearch; 119

141 CITY OF ST. CLOUD Principal Employers Osceola County, Florida Current Year and Nine Years Ago Percentage of Percentage of Total County Total County Employer Employees Rank Employment Employees Rank Employment Osceola County Public Schools 6, % 5,021 1 n/a Lowe's Distribution Center 6, % n/a Florida Hospital Celebration 3, % n/a Walt Disney World 3, % n/a n/a Florida Hospital Kissimmee 2, % n/a Osceola County Board of County Comission 2, % 1,577 4 n/a Orange Lake Resorts & Holiday Inn Club Vacations 2, % 1,200 5 n/a Osceola Regional Medical Center 1, % n/a Westgate Vacation Villas 1, % - Wilson Resort Management 1, % - Total Largest Employers 31, % 10,793 Total All Other Employers 50,671 63,292 Total Employment 82,474 74,085 Note: Data provided for principal employers located within Osceola County; data unavailable for the City of St. Cloud only. Sources: Osceola County CAFR - Fiscal Year

142 CITY OF ST. CLOUD Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Function/Program General Government Council Members City Clerk City Manager Human Resources Information Technology Finance & Accounting Building & Permitting Planning & Zoning Public Safety Police Sworn Officers Civilians Fire Sworn Officers Civilians Emergency Services Public Works Engineering Street Maintenance Fleet Maintenance Traffic Control Turf & Landscape Parks & Recreation Water Sewer Sanitation Total Source: City of St. Cloud Annual Budget 121

143 CITY OF ST. CLOUD Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program General Government: Building Permits Issued 4,053 3,195 1,966 1,563 1,764 1,786 1,764 2,162 2,336 2,520 Building Inspections Conducted 33,764 21,057 6,990 4,799 7,151 7,152 6,484 10,779 13,842 12,947 Police: Physical Arrests 1,174 1,327 1,454 1,300 1,114 1,288 1,086 1,284 1,327 1,293 Citations 7,660 9,006 10,466 7,385 8,248 3,142 3,250 6,581 5,188 4,370 Calls for Service 66,045 66,844 74,130 67,888 70,146 67,743 73,345 69,645 69,785 83,829 Fire: EMS Responses 2,566 2,700 2,935 3,048 3,073 3,060 3,131 4,192 3,279 4,211 Fires Emergencies 1,438 1,365 1,367 1,453 1,410 1,413 1,437 1,620 1,313 1,371 Inspections 635 1, ,030 1,293 Refuse Collection: Refuse Collected (tons per year) 23,858 25,137 24,079 22,969 23,481 22,856 25,333 26,949 30,459 31,043 Refuse - Transfer Station (tons per year) 89, ,565 77,342 94,407 92,355 97,095 91,498 93,841 92,180 92,465 Other Public Works: Street Resurfacing (miles) Potholes Repaired (yards) 1,600 1, , ,572 1,232 2,064 5,029 4,850 Parks & Recreation: Camp Registrations 3,972 4,880 3,117 3,831 3,749 3,700 3,459 3,398 2,998 4,102 Pool Memberships Private Use Rentals Boat Basin Rentals Potable Water: Total Average Connections/Customers 16,269 18,136 18,894 19,052 19,218 19,997 20,279 21,200 22,282 22,887 Average Annual Daily Consumption (MGD) Wastewater: Total Connections 11,611 12,854 13,526 13,615 13,875 14,164 14,469 15,035 15,261 16,437 Average Annual Daily Sewage Treatment (MGD) Reclaim Water: Total Connections 2,208 2,962 3,285 3,336 3,289 3,439 3,632 3, ,845 Notes: The City's marina was under construction during FY 2005, construction was completed in FY 2006 The number of boat slips increased, from 44 to 143, with the completion of construction in FY 2006 Boat basin rentals reported above are an annual average for the year indicated Source: Various City of St. Cloud Departments. 122

144 CITY OF ST. CLOUD Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program Police: Stations (Square Footage) 25, , , , , , , , , ,638.0 Training Facilities (Square Footage) , , , , ,686.0 Marked Vehicles Unmarked Vehicles Special Operation Vehicles Fire Stations: Fire Trucks/Engines Fire Rescue Vehicles (Ambulances) Refuse Collection: Collection Trucks Public Works: Storm Sewers (Miles) Miles of Streets: Paved Miles Unpaved Miles Parks and Recreation: Parks Park Acreage Boat Slips Playgrounds Baseball Fields Soccer Fields Community Centers Urban Agricultural Area Water: Water Mains (Miles) Fire Hydrants 1, , , , , , , , Storage Capacity (Millions of Gallons) Treatment Capacity (Millions of Gallons Wastewater: Sanitary Sewers (Miles) Treatment Capacity (Millions of Gallons Note: The number of boat slips increased, from 44 to 143, with the completion of the lakefront improvement project in FY Source: Various City of St. Cloud Departments 123

145 CITY OF ST. CLOUD Commercial Construction Value and Residential Construction Value Last Ten Fiscal Years Commercial Residential Construction Fiscal Construction Number of Year Value Units Value 2006 $ 24,716,443 1,190 $ 226,824, ,046,999 1, ,284, ,140, ,220, ,339, ,603, , ,556, ,081, ,759, ,068, ,072, ,069, ,172, ,035, ,991,287 Notes: Source: City of St. Cloud Building Department 124

146 CITY OF ST. CLOUD Insurance Coverage September 30, 2015 Types of Coverage Coverages and Limits Deductibles A. General Liability Insurance 1 Bodily Injury and Property Damage Limit $ 1,000,000 Per Occurrence $ - 2 Personal Injury and Advertising Injury Limit Included Per Person or Organization $ - 3 Products & Completed Operations Included $ - 4 General Aggregate Limit $ 1,000,000 $ - 5 Employee Benefits Liability, per person $ 1,000,000 Per Occurrence $ - 6 Employee Benefits Liability, Aggregate Limit $ 1,000,000 $ - 7 Fire Damage Limit Included $ - 8 Law Enforcement Liability $ 1,000,000 Per Person/Occurrence/Aggregate $ 25,000 B. Property 1 Building and Contents Limit, per schedule $ 96,743,433 $ 25,000 3% For Named Windstorm a. Flood (Excess of NFIP where available) $ 1,000,000 Per Occurrence/Aggregate $ 25,000 b. Boiler & Machinery $ 50,000,000 $ 25,000 2 Inland Marine a. Communication Equipment $ 50,000 $ 10,000 b. Contractor's Mobile Equipment $ 2,724,147 $ 10,000 c. Electronic Data Processing Equipment $ 2,854,738 $ 10,000 d. Emergency Services Portable Equipment $ 250,000 $ 10,000 e. Fine Arts $ 100,000 $ 10,000 f. Other Inalnd Marine $ 10,800 $ 10,000 g. Rented, Borrowed, Leased Equipment $ 200,000 $ 10,000 h. Valuable Papers $ 100,000 $ 10,000 i. Watercraft $ 13,786 $ 10,000 C. Automobile 1 Physical Damage Comrehensive/Collision Coverage Actual Cash Value $ 5,000 2 Automobile Liability $ 1,000,000 $ 5,000 3 Personal Injury Protection Statutory $ 5,000 D. Public Officials 1 Employment Practices Liability $ 1,000,000 Per Claim/Aggregate $ 25,000 2 Professional Liability $ 1,000,000 Per Claim/Aggregate $ 25,000 E. Crime 1 Employee Dishonesty $ 1,000,000 Per Loss $ 5,000 2 On Premises/In Transit $ 50,000 Per Loss $ 5,000 3 Forgery or Alteration $ 250,000 Per Loss $ 5,000 4 Computer Fraud $ 1,000,000 Per Loss $ 10,000 5 Funds Transfer $ 1,000,000 Per Loss $ 10,000 6 Claim Expense $ 5,000 $ - F. Environmental (Pollution) 1 Above Ground Storage Tanks, per schedule $ 1,000,000 $ 25,000 G. Workers' Compensation 1 Compensation Benefits Statutory - 2 Employers Liability: a. Each Accident $ 1,000,000 - b. Disease - Policy Limit $ 1,000,000 - c. Disease - Each Employee $ 1,000,

147 CITY OF ST. CLOUD Insurance Coverage September 30, 2015 H. Types of Coverage Coverages and Limits Deductibles Group Health 1 PPO Coverage -- Preferred Plan Office Co-pay $ 30 Hospital Ded + Coins Rx - Tier 1 $ 10 Rx - Tier 2 $ 30 Rx - Tier 3 $ 50 Emer. Room $ 300 Co-Ins. 80/20 Max. out of Pocket $ 4,000 Individual $ 8,000 Family Deductible $ 1,250 Individual $ 2,500 Family 3 PPO Coverage -- Standard Plan Office Co-pay $ 30 Hospital Ded + Coins Rx - Tier 1 $ 10 Rx - Tier 2 $ 30 Rx - Tier 3 $ 50 Emer. Room $ 300 Co-Ins. 80/20 Max. out of Pocket $ 5,000 Individual $ 10,000 Family Deductible $ 1,750 Individual $ 3,500 Family I. J. Group Life and Accidental Death and Dismemberment Insurance Accidental Death and Dismemberment (Statutory Death Benefit Coverages for Police Officers and Firefighters) 1 times annual earnings rounded to the next higher multiple of $1,000 Maximum amount of $100,000 AD&D 3 times annual salary if wearing seatbelt $65,000 if killed accidentally while on duty additional $65,000 if killed Accidentally while on duty in response to fresh pursuit $195,000 if killed unlawfully and intentionally while on duty K. Employee Long-term Disability 66-2/3 benefit percentage of own occupation period of disability up to 3 years Maximum: $5,000; Minimum: $100 Partial disability included L. Group Dental Insurance Low Plan Preventative Procedures 100/0 Basic Procedures Co-Ins. 80/20 Major Procedures Co-Ins. 50/50 Orthodontia Co-Ins. 50/50 Year Deductible (In Network) Individual $0 / Family $0 Year Deductible (Out of Network) Individual $50 / Family $150 Annual Max $ 1,000 Annual Max Ortho $ 1,000 High Plan Preventative Procedures 100/0 Basic Procedures Co-Ins. 100/0 Major Procedures Co-Ins. 60/40 Orthodontia Co-Ins. 50/50 Year Deductible (In Network) Individual $0 / Family $0 Year Deductible (Out of Network) Individual $50 / Family $150 Annual Max $ 1,500 Annual Max Ortho $ 2,000 M. Fiduciary Liability Police Officers & Firefighters $ 1,000,000 $ 5,000 General Employees $ 1,000,000 $ 5,

148 CITY OF ST. CLOUD Tourist Statistical Data for Osceola County Estimated Number of Overnight Visitors and Mode of Transportation Last Ten Years Air Auto Train/Bus Total % Year (1) Visitors Visitors Visitors Visitors Change ,658,287 2,184,753 29,953 5,872, % ,803,233 2,311,757 66,192 6,181, % ,861,730 2,176,041 99,714 6,137, % ,296,061 2,003,477 61,654 5,361, % ,297,000 2,004,000 57,000 5,358, % ,555,000 2,395,000 73,000 6,023, % ,746,000 2,676,000 77,000 6,499, % ,709,000 3,047,000 81,000 6,837, % ,876,000 3,185,000 84,000 7,154, % Total Total Room Economic % Visitors Nights Occupancy Impact Change 2015 (2) 6,099,900 7,525, % $ 4,546,247,300 N/A Notes: (1) Data is on calendar year basis. (2) Experience Kissimmee hired a new vendor for fiscal year 2015, the new vendor used different methodology in their calculations. Information about visitors by air, auto, or train/bus is not available. Source: Osceola County; Experience Kissimmee 127

149 CITY OF ST. CLOUD Miscellaneous Statistical Data September 30, 2015 CITY OF ST. CLOUD, FLORIDA (UNAUDITED) Date of Incorporation March 4, 1911 Original Charter Adopted September 12, 1967 Present Charter Adopted January 27, 1994 Re-published on 2/11/2010 Most Recent Referendum March 17, 2009 Form of Government Council - Manager Terms of Office Mayor/Councilman and Four Councilmen - staggered Four year Terms Boundary Areas Municipality Square Miles Electric Service Area Square Miles 128

150 COMPLIANCE SECTION Additional elements of the report prepared in accordance with the provisions of the Office of Management and Budget (OMB) Circular A-13 3 and the Rules of the Auditor General of the State of Florida.

151 CITY OF ST. CLOUD, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CFDA/ Program CSFA Grant/Contract Award Federal Awards Number Number Amount Expenditures U.S. Department of Housing and Urban Development Passed through Osceola County: Community Development Block Grants/ Entitlement Grants B-13-UC $ 82,474 $ 76,963 Community Development Block Grants/ Entitlement Grants B-13-UC ,000 10,003 Community Development Block Grants/ Entitlement Grants B-14-UC ,500 62,500 Total U.S. Department of Housing and Urban Development 149,466 U.S. Department of Justice Direct Program: Bulletproof Vest Partnership Program BU-BX , Bulletproof Vest Partnership Program BU-BX ,776 3,776 Bulletproof Vest Partnership Program BU-BX ,380 3,672 Public Safety Partnership and Community Policing Grants UMWX , ,076 Federal Equitable Funding FL , , ,865 Passed Through Florida Department of Law Enforcement: Edward Byrne Memorial Justice Assistance Grant Program JAGC-OSCE-1-R ,576 20,576 Edward Byrne Memorial Justice Assistance Grant Program DJ-BX ,376 10,374 30,950 Total U.S. Department of Justice 630,815 U.S. Department of Homeland Security Direct Program: Assistance to Firefighters EMW-2014-FO ,828 26,500 Staffing for Adequate Fire and Emergency Response EMW-2013-FH ,204, ,701 Total U.S. Department of Homeland Security 703,201 General Services Administration Florida Department of Management Services Bureau of Federal Property Assistance: Donation of Federal Surplus Personal Property ,740 18,740 Total General Services Administration 18,740 Total Expenditures of Federal Awards $ 1,502,222 Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of St. Cloud, Florida, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in, the preparation of the financial statements. 129

152 INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of St. Cloud, Florida (the City) as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated May 20, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City s internal control. Accordingly, we do not express an opinion on the effectiveness of the City s internal control. A deficiency in internal control exists when the design or operations of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose describe in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those 130

153 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Concluded) Compliance and Other Matters (Concluded) provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and questioned costs as item Additionally, we noted certain other matters that we have reported to management in a separate letter dated May 20, The City s responses to the management letter comments identified in our audit are described in the accompanying schedule. We did not audit the City s response and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. May 20, 2016 Ocala, Florida 131

154 INDEPEDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR A-133 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida Report on Compliance for Each Major Federal Program We have audited the City of St. Cloud, Florida s (the City) compliance with the types of compliance requirements described in the OMB Circular A-133, Compliance Supplement that could have a direct and material effect on each of the City s major federal programs for the year ended September 30, The City's major federal programs are identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditors Responsibility Our responsibility is to express an opinion on compliance for each of the City s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination on the City's compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30,

155 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida INDEPEDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR A-133 (Concluded) Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of City s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe that a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirement of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. May 20, 2016 Ocala, Florida 133

156 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FEDERAL AWARD PROGRAMS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA PART A - SUMMARY OF AUDIT RESULTS 1. The independent auditors' report expresses an unmodified opinion on the basic financial statements of the City of St. Cloud, Florida (the City). 2. No significant deficiencies or material weaknesses relating to the audit of the financial statements are reported in the report on internal control over financial reporting and on compliance and other matters based on an audit of the basic financial statements of the City. 3. Instances of noncompliance material to the basic financial statements of the City were disclosed during the audit and noted in Part B of this report. 4. No instances of significant deficiencies or material weaknesses relating to the audit of the major federal programs are reported in the report on compliance with requirement applicable to each major federal program s internal control over compliance in accordance with the Office of Management and Budget Circular A The independent auditors report on compliance for the major federal award programs for the City expresses an unmodified opinion. 6. The audit disclosed no findings required to be reported for the major federal award programs under Section 510(a) of OMB Circular A The programs tested as major programs included the following: Federal Programs U.S. Department of Homeland Security: Staffing for Adequate Fire and Emergency Response CFDA No U.S. Department of Justice: Federal Equitable Funding CFDA No The threshold for distinguishing Type A and Type B programs was $300,000 for major federal award programs. 9. The City did qualify as a low-risk auditee pursuant to OMB Circular A

157 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FEDERAL AWARD PROGRAMS FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF ST. CLOUD, FLORIDA (Concluded) PART B - FINDINGS - FINANCIAL STATEMENTS Notice of Event of Default The U.S. Bank National Association acts as trustee (the Trustee) for the Stevens Plantation Improvement Project Dependent Special District (the District). The District was formed in 2003 and is presented as a blended component unit of the City of St. Cloud. In May 2013, the Bond Holders of the $5,890,000 Stevens Plantation Improvement Project Dependent Special District Revenue bonds, Series 2003 (the Bonds) received a Notice of Event of Default because the Trustee did not receive sufficient payments from the District for the payment of the (i) interest due on the Bonds on May 1, 2013, and (ii) principal maturity on the Bonds due and payable on May 1, 2013, and the amounts on deposit in the Revenue Fund and the Reserve account were insufficient to pay the interest and principal on the Bonds due and payable on May 1, No subsequent payments have been made since the notice of default. The Trustee has been made aware that the District s failure to make such a payment arises from the failure by the District as the owner of certain real property within the District to consummate sales of the Property to third parties and distribute certain net proceeds of such sales to the Trustee. Therefore, the District is not in compliance with certain provisions of the Bonds. Management s corrective action plan can be found in management s response letter. PART C - FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS No findings and questioned costs related to major federal award programs were disclosed during the audit. PART D - SUMMARY SCHEDULE OF PRIOR FINDINGS No Summary Schedule of Prior Audit Findings is required because there were no prior audit findings related to federal programs. No Corrective Action Plan is required because there were no findings required to be reported under the Federal Single Audit Act. 135

158 INDEPENDENT ACCOUNTANTS REPORT ON COMPLIANCE WITH SECTION , FLORIDA STATUTES The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida Report on Compliance We have examined the City of St. Cloud, Florida (the City) compliance with the requirements of Section , Florida Statutes, as of and for the year ended September 30, 2015, as required by Section (10)(a), Rules of the Auditor General. Management s Responsibility Management is responsible for the City s compliance with those requirements. Auditors Responsibility Our responsibility is to express an opinion on the City s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the City s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City s compliance with specified requirements. Opinion In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year ended September 30, Restriction on Use This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Council Members, and applicable management, and is not intended to be, and should not be, used by anyone other than these specified parties. May 20, 2016 Ocala, Florida 136

159 MANAGEMENT LETTER The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida Report on the Financial Statements We have audited the financial statements of the City of St. Cloud, Florida (the City) as of and for the fiscal year ended September 30, 2015, and have issued our report thereon dated May 20, Auditors Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter , Rules of the Auditor General. Other Reports and Schedules We have issued our Independent Auditors Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards, Independent Auditors Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A-133; Schedule of Findings and Questioned Costs, and Independent Accountant s Report on Compliance with Section , Florida Statutes. Disclosures in those reports and schedule, which are dated May 20, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Additionally, our audit was conducted in accordance with Chapter , Rules of the Auditor General, which governs the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditors reports or schedule: Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report (except as noted below on the following table). Tabulation of Uncorrected Audit Findings Current Year Findings FY Findings FY Findings N/A 137

160 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida MANAGEMENT LETTER (Continued) Official Title and Legal Authority Section (1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. These disclosures can be found in Note 1 to the financial statements. Financial Condition Sections (1)(i)5.a. and (7), Rules of the Auditor General, require a statement be included as to whether or not the local government entity has met one or more of the conditions described in Section (1), Florida Statutes, identification of the specific condition(s) met. In connection with our audit, we determined that the City did not meet any of the conditions described in Section (1), Florida Statutes. Pursuant to Sections (1)(i)5.c. and (8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management s responsibility to monitor the City s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Annual Financial Report Sections (1)(i)5.b. and (7), Rules of the Auditor General, require that we determine whether the annual financial report for the City for the fiscal year ended September 30, 2015, filed with the Florida Department of Financial Services pursuant to Section (1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, In connection with our audit, we determined that these two reports were in agreement. Sections (1)(i)6.c. and (9), Rules of the Auditor General, require that we report the results of our determination as to whether the City posted its tentative and final budgets on its Web site. In connection with our audit, we determined that the City posted its tentative and final budgets on its Web site. Other Matters Section (1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. See attached list of management letter comments. Section (1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. 138

161 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida MANAGEMENT LETTER (Concluded) We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of our audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. May 20, 2016 Ocala, Florida 139

162 MANAGEMENT LETTER COMMENTS The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida During the course of our audit, the following items came to our attention. These items involve primarily operational matters, which, if improved, will result in more efficient and effective operations: Stevens Plantation Dependent Special District The Stevens Plantation Dependent Development District (the District) was created by the City on August 21, 2003, via City Ordinance , pursuant to Section of the Florida Statutes. The purpose of the District is to acquire land within its geographical boundary from the proceeds of tax-exempt debt for resale to developers in association with the Stevens Plantation Development (a mixed-use, master planned community encompassing approximately 590 acres within the City). The District is included as a blended component unit in the accompanying government-wide financial statements of the City. Our review of the financial condition of the District indicates that there are several issues management needs to continue to address. These issues as of September 30, 2015, consist of the following: Bonds Payable of the District of $4,460,000, are currently in default. We recommend that management continue to work with both legal and bond counsel to determine the legal liability associated with the default and the plans to address how to resolve the defaulted status of the Bonds. Land Held for Sale is currently reported in the accounting records at $3,652,697 which is based on the historic values at which the land was purchased for resale. We recommend management reevaluate the carrying value of the land based on current appraised values and determine possible impairments. The District has obtained interfund borrowings from both the General Fund and OUC Interlocal Agreement Fund to cover the deficit and meet the operating needs of the fund for several years. In prior years, a majority of this balance (approximately $7,800,000) was reclassed from an interfund borrowing to a permanent transfer of funds. The balance remaining for the advance as of September 30, 2014, was $609,086, increasing to $736,244 during 2015, while none of the advance was repaid in the current year. We recommend that the City continue to monitor the future potential for recovery of these advances or consider additionally adjusting these borrowings and reclassing the amount to a permanent transfer which would eliminate the interfund receivable, in unrecoverable. 140

163 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida MANAGEMENT LETTER COMMENTS (Continued) Stevens Plantation Dependent Special District (Concluded) Through notifications from the Stevens Plantation Community Development District (CDD) and review of their September 30, 2015 Audit Report, the CDD is not in compliance with certain provisions of their bond indentures for their Special Assessment Revenue Bonds, Series 2003A and 2003B including those relating to 1) collecting assessments to provide payment of debt service and 2) making its semi-annual debt service principal and interest payments. The District holds land held for sale that is assessed annually by the CDD for operations maintenance and their proportion of the infrastructure improvements purchased through the issuance of the Bonds. Through 2013, the District had paid their annual assessments, however, no subsequent assessments have been paid, except for specific parcels sold since Additionally, there are restrictions on the land such that if there are any land sales, a portion of the sales proceeds are required to be submitted to the CDD for payment on the 2003B bonds. During the 2013 fiscal year, the District received notice from the CDD that the remaining assessment value of $6,445,676 is due and payable for the 2003B Bonds. We recommend that management continue to work with legal and bond counsel to resolve these issues addressing the financial stability and legal liability associated with the indebtedness associated with the District including its relationship with the CDD Utility Billing The City experienced a significant change in operations during the 2014 fiscal year with the addition of water/sewer billing activities which had been previously performed by Orlando Utilities Commission under an interlocal agreement. Utility billing operations are a significant transaction class with its multiple facets and complexities, and are a significant portion of City revenues. During our audit of the utility billing function, a number of issues were brought to our attention. These issues as of September 30, 2015, consist of the following: System Integrated Controls During our review of billing and collection process and procedures, we noted that the CIS system was not utilizing system level controls related to approvals. For example, a Utility Teller can create and submit a transaction batch without any system integrated secondary approval. While the City has certain mitigating controls outside the system, implementation of possible system level controls would help to strengthen the utility system s internal control to prevent errors from occurring. Point and Pay (Utility System s Automated Telephone Bill Pay System) During our review of the Point and Pay system, we noted continuing issues with the system. When batches are created from Point and Pay (an automatic process), the CIS system is creating errors within the batch. For example, we observed instances where the system had move the decimal place to make an $83.13 payment appear as an $8, payment. While it does not appear that Point and Pay is charging the customer the incorrect amount, it does create a risk of recording the payment incorrectly, within the given batch, if the errors are not manually caught. We also observed an instance where the batch did not pull over the customer s utility account information, creating a risk that the customer would not get credit for the payment. The billing and Customer Service Center Manager has implemented an in depth manual review of this batch on a daily basis to ensure accuracy. This review takes excessive staff time and does not completely remove user error. It is recommended that City staff work with the vendor to resolve this issue. 141

164 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida Utility Billing (Concluded) MANAGEMENT LETTER COMMENTS (Continued) Automated Exception Reports The billing system utilizes automated exception reports, however we noted that the system s exception reports have parameters within the system that have not been set to a reasonable basis that makes these reports useful to staff. Several exception reports appeared to have parameters set too low, resulting in significantly high levels of exceptions giving management too much information to be meaningfully utilized. Exception reports are a key management tool that helps identify problems related to meters and meter reading, however must be properly designed and the results timely addressed, in order to function properly. AMI Meter Implementation During 2015, the City implemented AMI meters, discovering various issues from the old meter system. Issues discovered during the implementation included an issue discovered were a water meter located, had never been registered in the City s billing system. The meter had recorded nine million gallons of water which had never been billed. After further review by City personnel, it was noted that there have been multiple rogue meters discovered, along with a variety of other issues related to both old and new meters. We recommend that a review and reconciliation of all City utility meters be completed to ensure the operation effectiveness of the utility system as a whole and to ensure that all billable services are captured within the utility system and billed accordingly Utility Rates Utility rate resolutions adopted in 2008, established that annually, rates were to be increased by 5% for water services, and adjusted based upon changes in the consumer price index for sewer and reclaim services. The resolution requires that the annual rate changes be presented to council along with the budget to be approved annually. We noted that the rate changes for the current year were not presented to council and that customers were not provided specific notice of the changes in rate. We recommend management review these requirements and consult with their attorney as to requirements and methods of communication of annual rate changes. As part of our audit procedures, we select a sample of utility customers and recalculate a monthly utility bill for each customer selected. During our procedures, we noted three instances where customer rate classes were still being charged 2014 rates on a 2015 bill and one instance where a customer class was charged the incorrect rates for the type of customer class. After being made aware of these variances, management further investigated the differences and assessed the impact of the errors, noting a net overbilling of utility customers of approximately $40,000. We recommend that management review the rate implementation process, with an emphasis placed on accuracy on implementation of new utility rates and include a regular routine sampling and recalculation of customer bills, to detect errors on a timely basis Impact Fee Billing During our review of utility billing processes it was noted that the Public Service Coordinator is tasked with calculating impact fee assessments, creating those charges within the City s utility billing system, and collecting the cash received for those impacts fees, creating an environment of incompatible duties. We recommend that a review of segregation of duties related to impact fee billings be performed to ensure that there are appropriate controls in place, with emphasis on the elimination of the performance of incompatible duties by an individual. 142

165 The Honorable Members of the City Council City of St. Cloud St. Cloud, Florida MANAGEMENT LETTER COMMENTS (Concluded) Grant Reporting and Reimbursement Request Review and Approval Process During our audit we noted the City has a Grant Administrator who prepares all reimbursement requests for grants and also prepares reports for required reporting. At this time, there is no review or approval process in place related to the reimbursement requests and grant reports, which would provide a control process for the prevention and discovery of errors related to grant reimbursement requests and reporting. We recommend the City implement policies and procedures related to grant reimbursements and required reporting, which includes a review and approval process. May 20, 2016 Ocala, Florida 143

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